The Top 3 Things that Can Go Wrong with New Multi-Family and Commercial Buildings

Written by: Commercial Real Estate Inspectors, LLC

In many ways, new construction can be the most demanding property to inspect. It is not yet known how all the different components will work together. How will they hold up? Will this brand of AC unit prove to be a problem over the long run? Does this drainage system really handle all the water during heavy rain?

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You may be wondering why an independent real estate inspection should be necessary for brand new construction. If the building passed code inspections, isn’t that enough?

The Department of Building and Safety is looking at specific items they are trained to look at. Rarely are they contractors with judgment as to how a site will perform. In a large building, one inspector may look at items for 15 minutes due to time constraints. We may spend 3-5 hours with multiple inspectors going over the entire site. We look at things from a performance aspect such as testing the HVAC units and seeing if the lights really all come on, testing plugs and doors and toilets and sinks and so on. None of this is done in the city inspections. Those are a completely different inspection.

Don’t get me wrong, what they do is invaluable; however, it is not done from a buyer’s viewpoint or from a performance viewpoint. A physical real estate inspection is a good investment because it gives you the assurance that the property is actually functioning as it should be.

Here are the top 3 things that we have seen go wrong with new Multi-Family and Commercial buildings:

1. Improper moisture protection. This most commonly occurs with the roofing. We find incomplete or improper installation or waterproofing. The most dramatic example was a large, brand new office complex in Las Vegas. All four buildings had improperly installed roofing. After consultation with the manufacturer, it became necessary to have the roofing removed and replaced for the warranty to be in effect. The local building department does not care how a roof looks or performs. It only cares about some very basic code issues.

2. Do you really have enough and the type of electrical system you need? The code requires that all new construction multi-family units have a minimum of 60 amps of service. This is enough for just about any living condition in multi-family units.

For commercial buildings, the use the property will be put to determines if the service is sufficient or not. In almost every circumstance modern buildings have sufficient supply for most needs, however, if you are planning to manufacture, major tenant improvements will most likely be needed.

3. Does the HVAC system fit your needs? You may have specific personal considerations. For multi-family buildings the requirements are to be able to heat the space but cooling is not required. For office areas in commercial properties as well as Multi-Family buildings, it is a requirement to be able to maintain 68-70 degrees 36” off the floor depending on which code you go by.

The building codes don’t require that you air-condition office space but industry standards do and even they vary depending on the municipality. That said, common sense will probably tell you that tenants and workers are not going to be willing to work in an unconditioned building in Southern California in the summer.

A good, professional inspection makes sure there are no major flaws in the construction or the major systems and that the property will meet your specific needs.

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