Industry experts need to verify building plans

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Many people therefore assume that commercial property brokers are qualified to perform their verification. This common misconception can result in serious problems for commercial property purchasers, according to Jason Gregoriades, a member of the Rawson Property Group's commercial division.

"As a commercial property broker, you tend to learn a little bit about a lot of different aspects related to the commercial sales process, and experienced brokers can often provide valuable insights and opinions on a wide variety of things. The problem is that those opinions are not usually backed by the relevant specialist qualifications and can't, therefore, replace the services of the various industry experts," says Gregoriades.

"Only a professional architect, quantity surveyor or other accredited industry professionals can verify building plans. If your broker tells you he can do it - don't take the risk, it's not worth having issues crop up later. Brokers who falsely represent themselves as building plan experts, or who make assertions to that effect, can find themselves facing legal repercussions should issues with the building plans later arise."

Reasonable expectations

"Purchasers therefore need to maintain reasonable expectations," Gregoriades adds, pointing out that it is hardly reasonable to expect a commercial broker verify the building plans as part of the due diligence, no matter how much commission the commercial broker is earning on the deal.

So who is responsible for the building plan verification then? "When building plans are included in a due diligence clause, the seller has to provide the plans to the purchaser and make any reasonable updates or changes required, but it's the purchaser's responsibility to verify those plans as acceptable," says Gregoriades.

While a commercial broker may volunteer to act as a go-between to facilitate communications between the purchaser and seller, Gregoriades warns that brokers are in no way required (by general, contract or common law) to obtain, check, request remediation of or certify plans.

Purchaser's responsibilities

"It's up to the purchaser to perform due diligence, using their own resources and at their own cost," says Gregoriades. "When it comes to building plans that means hiring an architect, quantity surveyor, or similarly accredited industry professional to certify that everything is in order. Anyone else simply isn't qualified to perform the duty with any kind of legally recognised authority.

"Where a purchaser confirms to the seller that he is satisfied with the building plans (as part of the due diligence clause) without approaching such a well-qualified external party for their opinion on the matter, the purchaser may later find themselves in a difficult situation with less right of recourse against the seller," he concludes.