RICS professional standards and guidance, global Technical ...

1 guidance noteRICS professional standards and guidance , globalTechnical due diligence of commercial property1st edition, January 2020 Technical due diligence of commercial propertyRICS guidance note, global1st edition, January 2020 Published by the Royal Institution of Chartered Surveyors (RICS)Parliament SquareLondonSW1P responsibility for loss or damage caused to any person acting or refraining from action as a result of the material included in this publication can be accepted by the authors or by the Building Surveying professional 978 1 78321 378 8 Royal Institution of Chartered Surveyors (RICS) January 2020. Copyright in all or part of this publication rests with RICS.

2 Save where and to the extent expressly permitted within this document, no part of this work may be reproduced or used in any form or by any means including graphic, electronic, or mechanical, including photocopying, recording, taping or web distribution, without the written permission of RICS or in line with the rules of an existing p e set using Ty p would like to thank the following for their contributions to this guidance note: Chair: David Mann MRICS (Tuffin Ferraby Taylor LLP)Lead working group:Ian Bragg MRICS (BNP Paribas Real Estate)Alex Charlesworth FRICS (Cushman & Wakefield LLP)Trevor Rushton FRICS (Watts Group Limited) global working group.

3 Stephen Ballesty FRICS (In-Touch Advisory Pty Ltd)Andrea Brown MRICS (Knight Frank)Jari Eno MRICS (Richelieu Developments)Glyn Evans MRICS (Cushman & Wakefield)Helen Evans MRICS (Triuva)Joan gutes FRICS (BQuantium)Coby Hughes (Baxter International Inc)Brian Jones FRICS (Hampton Jones)Trevor Jones FRICS (Maynard Marks)Veronica Martin Tolosa MRICS (VMT 305)John Preece FRICS (Hub Australia)Bernd Rosoly MRICS (Mocuntia Property Consulting)Federica Saccanni MRICS (CBRE)Bert Sandberg MRICS (CBRE)The working group would also like to thank:David Pliener (Hardwicke Chambers)RICS professional Group lead:Craig Ross MRICS (RICS)RICS Publishing: standards Development Manager: Antonella AdamusStandards Project Manager: Katherine AndrewsEditors: Jo FitzLeverton and Megan ReediiRICS guidance note, globalEffective from 1 April 2020 Technical due diligence of commercial propertyContentsAcknowledgments.

4 IiRICS guidance notes .. 11 Introduction .. Effective date .. 32 The need for Technical due diligence .. 43 Types of inspections .. The property life cycle .. Acquisition .. Occupation .. Disposal (vendor s survey) .. Development .. 84 Taking instructions .. Key items .. Practical limitations .. Extent of liability .. Data room and document review .. Client requirements .. The property or premises (buildings, assets or facilities) .. Confirming the instruction .. Specialist consultants and their appointment .. Inspections carried out in countries outside the RICS member s or RICS regulated firm s country of employment.

5 175 The inspection .. General principles .. Inspection, note-taking and reflective thought .. Health and safety considerations .. Enquiries to be made on site .. Building fabric .. Building services .. External areas .. Fire precautions .. Accessibility and inclusiveness .. Environmental considerations .. Deleterious and hazardous materials .. Sustainability issues .. Cultural heritage .. guidance note, globalEffective from 1 April Legal and title issues .. 236 The report .. General guidance .. Report layout .. Report contents .. 25 Appendix A: Technical due diligence services .. 29 Technical due diligence of commercial propertyivRICS guidance note, globalEffective from 1 April 2020 RICS guidance notesDefinition and scopeRICS guidance notes set out good practice for RICS members and for firms that are regulated by RICS.

6 An RICS guidance note is a professional or personal standard for the purposes of RICS Rules of Conduct. guidance notes constitute areas of professional , behavioural competence and/or good practice. RICS recognises that there may be exceptional circumstances in which it is appropriate for a member to depart from these provisions in such situations RICS may require the member to justify their decisions and of these provisions in legal or disciplinary proceedingsIn regulatory or disciplinary proceedings, RICS will take account of relevant guidance notes in deciding whether a member acted professionally, appropriately and with reasonable competence. It is also likely that during any legal proceedings a judge, adjudicator or equivalent will take RICS guidance notes into recognises that there may be legislative requirements or regional, national or international standards that take precedence over an RICS guidance from 1 April 2020 RICS guidance note.

7 GlobalDocument status definedThe following table shows the categories of RICS professional content and their statusType of documentDefinitionRICS Rules of Conduct for Members and RICS Rules of Conduct for FirmsThese Rules set out the standards of professional conduct and practice expected of members and firms registered for regulation by standardHigh-level standard developed in collaboration with other relevant professional statement (PS)Mandatory requirements for RICS members and RICS regulated guidance note (GN)A document that provides users with recommendations or an approach for accepted good practice as followed by competent and conscientious code of practice (CoP)A document developed in collaboration with other professional bodies and stakeholders that will have the status of a professional statement or guidance jurisdiction guide (JG)This provides relevant local market information associated with an RICS international standard or RICS professional statement.

8 This will include local legislation, associations and professional bodies as well as any other useful information that will help a user understand the local requirements connected with the standard or statement. This is not guidance or best practice material, but rather information to support adoption and implementation of the standard or statement due diligence of commercial property2 Effective from 1 April 2020 RICS guidance note, global1 IntroductionThe term Technical due diligence (TDD) is generally adopted by the industry. Building survey, building condition inspection, pre-acquisition survey or vendor survey are also often utilised. The term structural survey should not be 1st edition global RICS guidance note is effective three months after publication, superseding the following RICS publications and any associated translations: Building surveys and Technical due diligence of commercial property, England and Wales (4th edition) RICS guidance note.

9 Technical due diligence of commercial and industrial property, Australia, (1st edition) RICS guidance note. Technical due diligence of commercial and industrial property, New Zealand, (1st edition) RICS guidance note. Technical due diligence of commercial, industrial and residential property in Continental Europe (1st edition), RICS guidance guidance note should be considered adaptable for all types of commercial and industrial property, including hotels, retail, healthcare, education, residential apartment blocks, etc. Clients should be encouraged to avoid imposing restrictions and limitations that compromise the Technical due diligence process and dilute its contents and/or refer to the current edition of Surveying safely: health and safety principles for the property professional , RICS guidance is concerned that RICS members only undertake work they are competent to do in fields or specialisms for which their training and background experience are appropriate and relevant.

10 It is important that RICS members or RICS regulated firms undertaking Technical due diligence have experience in this field or are appropriately supervised by an RICS member or RICS regulated firm with relevant experience. The RICS Technical due diligence schedule of services has been provided in Appendix A. These forms may be used in conjunction with the RICS Short Form of Consultant s Appointment for Designated Services available from RICS. Note that these forms were written for use in England and Wales and are appended to this guidance note as an example only. Services to be included in a Technical due diligence survey may differ between countries, states and regions, and the list of services should therefore be tailored according to the Effective dateThis guidance note is effective three months from from 1 April 2020 RICS guidance note, global2 The need for Technical due diligenceTechnical due diligence of property, when carried out by an RICS member or RICS registered firm, consists of the systematic review, analysis, discovery and gathering of information about the physical characteristics of a property and/or land (the property).