Technical Due Diligence ─ Redefined by RICS … adopted by ICM too!
RICS explain that Technical due diligence of property, when carried out by an RICS member or RICS registered firm, consists of the systematic review, analysis, discovery and gathering of information about the physical characteristics of a property and/or land (the property). The RICS member or RICS registered firm then undertakes an impartial and professional assessment of the property and provides a balanced and professional opinion of the condition of the property in the form of a technical due diligence report. This enables a prospective purchaser, occupier or financier of the property to make an informed assessment of the risks associated with the transaction from a technical perspective.
During the process of undertaking technical due diligence, an RICS member or RICS regulated firm may establish defects or deficiencies in the property that could have an impact on the asset and the life safety of occupants in its immediate, short-, medium- or long-term performance. The defects may include the need for repairs arising from:
• deficiencies in design and construction quality
• a lack of planned and actual maintenance
• neglect or misuse
• insufficient capacity in services items approaching, at or beyond the end of their useful or economic life
• deleterious materials and
• non-compliance with statutory or mandatory requirements such as planning and Building Regulations or Building Codes.
Matters may also arise that are not to the potential purchasers’, managers’ or occupiers’ required standards, e.g. relating to cultural, social or religious beliefs or requirements.Technical due diligence can be used for many purposes, including:
• providing a basis for optimisation of design of new developments and refurbishments
• gaining an understanding of the condition and design of the property
• establishing the suitability of the property for its intended use (if known)
• understanding the need for and quantity of future costs of repair and replacements and other liabilities
• providing a level of protection for the occupier, owner, institutional investor or funder
• providing a basis for price negotiations
• providing a basis for the allocation of risk
• providing a basis to improve life safety and
• providing a basis for performance improvement, improved sustainability and better decision making.
The ICM's Director of Education & Training David Jones is a Member of RICS and says " I welcome the timely publication of this excellent global guidance which I fully endorse ... "
cdm, competence, compliance, construction, construction management, Quality, Technical Due Diligence