In my previous blog posts, you’ve learned how to evaluate a plot or building, find an architect, and set up the contract. The next step is the surveys that need to be carried out before and after you commit to buying the plot or building.
Summary
There are certain surveys we recommend having conducted before you buy the property:
- Soil Survey (to check the consistency and contamination of the soil)
- Pollution Survey (to check for hazardous materials in existing buildings)
- Technical Due Diligence (a technical inspection of the existing building)
These will help you gain a better understanding of the costs that may come your way after the purchase and will give you a stronger bargaining position.
What are surveys and why do I need them?
Just as you would have a car mechanic check over a used car before you buy it, you need to have a property checked before you buy it. There are multiple surveys that will help reduce the risk of surprises and will give you a stronger bargaining position.
Which surveys do I need?
Below is an overview of the most important surveys. You can have almost any aspect of a property surveyed, but these are the surveys we recommend to our clients.
- Soil Survey (to check the consistency and contamination of the soil)
- Pollution Survey (to check for hazardous materials in existing buildings)
- Technical Due Diligence (a technical inspection of the existing building)
- Land Survey (to check the size and borders of the plot)
- Fire Protection (to check which fire protection measures need to be taken in an existing building)
- Utilities Survey (to check which utilities are located underground or in the vicinity)
When should the surveys be done?
We recommend carrying out the soil, pollution, and technical due diligence surveys, at the very least, before buying the plot/property. The others can be done afterward, although, in that case, you do run the risk of unpleasant surprises. For existing buildings, a technical due diligence survey is an absolute must before you commit to the purchase. These surveys will show you the state and any potential contamination of the property/plot. Contamination, in particular, can be extremely expensive as hazardous materials will need to be tested and disposed of in special factories.
An example from real life
You may not think of soil as a potentially hazardous material, but it certainly can be – when it is contaminated with chemicals, fuel, or other hazardous substances, for instance.
Let’s say there used to be a factory nearby where they cleaned metals. They used chemicals to do it, and back in the day, they would just hose off the materials and let everything flow onto the plot. Over the years, this substance will have seeped through all the layers of soil and potentially even into the groundwater.
But you don’t know that because you skipped the soil survey before buying the plot and there is no clause in the contract.
After signing the contract, you conduct the survey and discover the situation I’ve just described. Now the municipality can force you to cleanse the plot at your own expense. This involves removing all the soil until you’ve reached a level where it’s clean and filling it up again with clean soil. It also involves testing the soil that needs to be removed in a special laboratory and disposing of it in special factories. The process can cost you hundreds of thousands of euros, not to mention major delays.
That’s why it’s wise to conduct a relatively cheap soil survey before buying the plot. If you don’t, and you experience these issues, your profit could be lost before you even start construction.
You’ll have a stronger bargaining position
A lot of people skip the survey step because they want to buy and build as soon as possible; patience can be a real virtue, however. If you know that the plot is contaminated or the existing building is in a poor condition, you’ll have a much stronger bargaining position with the seller. You can even negotiate for the seller to clean the plot or building before you buy it.