On a property market like the current one which is constantly evolving, the technical appraisal of a building or project becomes essential as the basis for decision-making relative to a property, making Technical Due Diligence a fundamental tool prior to the commencement of a process of transaction, financing, insurance cover, or for the property’s optimal management and maintenance.
What it is
Technical Due Diligence is a process of investigation which makes it possible to learn about the general state of a building, with the aim of minimising or delimiting the risks in property deals, by analysing a variety of aspects: the legal-administrative situation and compliance with the provisions, a purely technical appraisal of the condition of the building and of its installations, and an estimate of costs.
Technical Due Diligence can be complemented with additional studies which will offer a more exact and extensive view of the state of the building.
Who may require Technical Due Diligence
- Potential buyers, to evaluate the risk of their investment.
- Sellers, to provide added value to their sale.
- Current owners, to reveal the present state of their building, with an estimate of possible reforms.
The benefits provided by Technical Due Diligence
- To make known the technical condition and the design of the property.
- To identify the building’s deficiencies.
- To establish the suitability of the building for its desired use.
- To estimate the present and future costs which must be met by the property if it is to be correctly maintained.
- To provide a substantial base for negotiating the price and locating the risks.
How a Technical Due Diligence is performed
On the basis of an exhaustive study of the documentation available on the building and of the provisions applicable to it in each specific case (licences, projects approved by the authorities with jurisdiction, the legalisation of the installations, the property’s situation relative to current planning, cataloguing, limitations in case of partial work) and a visual inspection of the property, and the result of the investigation is set out in a report which details the deficiencies found, recommending possible solutions and making an estimate of the costs associated with those shortcomings. Such costs are estimated for a five or ten year term, in three categories according to their degree of urgency: immediate, medium-term and long-term.
The aspects analysed in a Technical Due Diligence procedure
An analysis of the technical and administrative documentation on the construction, and that generated during the building’s use and maintenance.
Analysis of the carrying capacity of the structure and its stability: an inspection of the surroundings, the structural system, the building’s shell and skin, the indoor compartmentalization and finishes, salubriousness and habitability.
Analysis of the state and the maintenance operations of the following installations:
- Electrical: high- and low-voltage, fire protection.
- Mechanical: air conditioning, plumbing and drainage, lifting apparatus, solid, liquid and gaseous fuels, renewable energies, etc.
- ICT: telecommunications, home automation, building automation, security.
Eurocontrol has a multidisciplinary team of specialists in each area dealt with in a Technical Due Diligence assessment. Our experience and technical competency means that we can offer customised service which responds to a client’s specific needs, and based on a working methodology adapted to each case.