Thames Valley: How good is your property deal and could you do better?

In making judgements concerning value, most tend to think short-term at the expense of the long-term, preferring small savings today against greater benefits down the line. Such behaviour is no different when dealing with property, whether selling, letting, buying or renting, writes Giles Blagden of Reading-based Hicks Baker.

When selling, owners often only reluctantly appoint an agent to broker a deal. When a deal is agreed both buyer and seller accept solicitors are needed to give it legal effect. On acquiring a new property, some prudently employ a building surveyor to avoid hidden and costly works in the months and years ahead, fewer however stop to consider other matters, such as whether the rent or price is fair or what their current and future liabilities might be perhaps, in the mistaken belief any problems will be picked up and addressed by the solicitor. A solicitor is not an adviser on value or practical property issues. Good ones will admit this, bad ones won’t.

General Practice (GP) surveyors (for that is how they are known) are specialists in practical property issues and how to resolve them. As chartered surveyors, with the requirement to carry appropriate professional indemnity insurance, they can save their clients’ money, time and hassle and add value. Too often, business owners congratulate themselves for a good property deal, without realising they could have done better with professional advice.

Two areas where clients can benefit significantly is in relation to leasehold property acquisitions and property management.

Property acquisition

The surveyor will check whether the floor areas are as advertised and in accordance with the relevant code of practice. This is important in itself, but as rents and sale prices are invariably based on rates per unit area, the right value applied to the wrong area could result in clients paying too much.

The surveyor will save clients time and effort by ensuring that the properties shortlisted for inspection are appropriate, in terms of planning use, cost, lease length and match the clients covenant strength. The surveyor will know which ones to avoid.

The surveyor will have access to market information, which will enable them to advise on values and trends and in undertaking negotiations on the client’s behalf will provide objectivity and distance from the seller. 

All clients are different and each transaction should be shaped to their individual needs in terms of rent free periods; break clauses; rent security; rent reviews; repairing liability amongst others. A surveyor will include terms that might otherwise be overlooked and avoid terms that are of no value. Why for example have and pay for a break clause if there is no intention to exercise it?  

Property management

All too often inexperienced tenants consign leases to the drawer once they have signed and taken occupation, having little regard to the fact that a lease is a living document which moderates both theirs and the landlord’s actions. It is not uncommon for tenants to undertake extensive alterations and additions without the landlord’s consent or to allow another party into occupation. The effect on the landlord’s investment can be devastating, particularly if the works have been poorly executed, or carried out without local authority consent. The cost and time to both sides spent unravelling and rectifying these breaches, if this is indeed possible, can run to many thousands of pounds.

Once bitten, it is often only after such events that clients choose to employ appropriately qualified property managers. How much simpler and cheaper it would have been to engage their services sooner.

For a further discussion on your property needs, contact Giles Blagden on 0118 955708 or email: g.blagden@hicksbaker.co.uk