Businesses far and wide all have one thing in common — the need for premises.
In the world of industrial property, understanding the requirements, restrictions and basic regulations are essential to investing. Let’s take a look at due diligence and how to navigate the process successfully.
What is due diligence when referring to industrial property?
The meaning of due diligence in industry relates to the process a buyer goes through when selecting and purchasing an industrial property. Purchases of this nature tend to be of high value, and it is in the buyer’s best interest to make an informed decision beforehand. Practising due diligence will ensure the buyer understands the risks and responsibilities that come with buying industrial property. An industrial property can, by definition, be anything from a huge warehouse to a mini factory for sale.
Doing commercial due diligence is sometimes not as easy as it seems — and it involves using all the property investment tools you have at your disposal. Along with acquiring compliance certificates that adhere to strict codes, you need to carry out a detailed personal inspection of the building. Taking the time to do this can help you avoid future maintenance issues or safety concerns.
The importance of having an industrial property checklist
Our economy is steadily growing and relies heavily on the industrial sector to provide a consistent base for businesses to thrive. In order to ensure the optimal functioning of every industry, municipalities put certain rules into place. Zoning laws should always be taken into account when capitalising on property investment opportunities. Your investments could be severely affected if the building is not zoned for its intended purpose.
Once you’ve checked out the building, the location and the relevant zoning laws, you’ll need to make sure you have everything on the following due diligence checklist:
- An environmental assessment
- Property transfer and correct title deeds
- Compliance inspections
- Lease and tenant agreements
Preparing to safeguard your industrial property
Conducting due diligence means that you will have to pay close attention to the fine print of legalities. Being above board in terms of all regulations and codes of practice will help to ensure that your business prospers in the long term. Thanks to the online shopping boom and the uptick in demand for warehousing, such facilities can be considered a commercial or industrial property investment.
When leasing your industrial property, a surefire way to protect your asset and carry out due diligence is to understand the tenant rights and landlord obligations contained in the lease. This will help prevent problems in future and help you to maintain a great relationship with your tenant. All lease agreements should be analysed under the scope of relevant legislation.
Pay your industrial property dues
The South African Revenue Service (SARS) monitors the ownership of industrial properties with a keen eye, while the Municipal Property Rates Act governs taxation on property tax assessments. It is always a good idea to seek professional guidance to ensure that you understand the tax laws and financial implications of property ownership.
Seeff understands the stress of needing to understand industrial property laws. We provide expert assistance in procuring sought-after industrial properties, Make a confident decision when you choose to buy an industrial property with our inside knowledge. Contact us today for more information.
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