The House Detective by Barry Stone, Certified Home Inspector
Dear Barry: I’ve purchased six homes during the past 20 years and have always gotten home inspections. But I recently bought my first commercial property, a four-unit office building, and opted to forego an inspection on the advice of my agent. The agent explained that commercial properties are different from homes and only need to be checked by a structural engineer. I didn’t question this advice and am now lamenting that error. It’s been six months since the close of escrow, and complaints from the tenants are endless. The plumbing is bad, the heating rarely works, and the roof leaks like a screen. Why would a commercial agent advise against an inspection? Larry
Dear Larry: The failure to recommend a property inspection is a common problem with many commercial real estate agents. Fortunately, this is not the case everywhere. In some cities and towns, commercial agents routinely recommend inspections to their buyers, while in other locales, the misguided belief that commercial properties don’t need to be inspected leads to major breaches in defect disclosure.
At the root of the problem is a failure to apply common sense. The kinds of defects that would be reported during a home inspection are just as likely to be found in a commercial building, whether it be offices, stores, a restaurant, a medical clinic, etc. Roofing materials, for example, are subject to the same installation standards and are just as likely to become worn with age. Electrical violations involve the same issues of personal safety and fire prevention, whether the building is a house or an office. Plumbing problems are just as costly and annoying whether they occur in a master bathroom or a janitorial utility room. And the lack of heat on a frigid morning is just as unpleasant where you work as where you live.
Your agent’s advice to hire a structural engineer would have been wise in addition to, not instead of, a full property inspection. After all, what can the engineer tell you about the wiring in the breaker panels, the grounding of wall outlets, the function of the heating and air conditioning systems, the condition of the roofing, the safety of stairs and railings, the functional conditions of toilets and sinks, the water pressure, and so on?
In matters of defect disclosure, the same rules and reasons that motivate the hiring of a home inspector apply to the purchase of commercial property. Failure to recognize this fact can be a costly error for buyers and is a breach in the professionalism of far too many commercial Realtors. The purchase of commercial property involves enormous financial commitments, and the risks inherent to that kind of investment can be reduced by knowing more about the condition of the property being purchased. This should be common knowledge among agents who specialize in commercial property. Those agents who have not yet realized this need to reconsider the matter. Detailed property inspections are financially beneficial to commercial buyers and reduce the disclosure liability of commercial agents and brokers.