Dilapidation: Pre-Development Property Inspections, Where’s the Risk?

April 29, 2021

Prendos Building Surveyor Sean White investigates the benefits of getting dilapidation surveys done before your next development project, and why it pays to get a building surveyor on the job.

The aftermath of the Canterbury earthquakes provided some valuable lessons for property owners – including how much easier claim settlements would have been if the pre-event condition of properties had been photographed and documented. As a result of this hindsight, many local authorities have made it a requirement to record the condition of adjacent properties prior to any large development project.

While the addition of these ‘dilapidation’ related contract terms into local authority tenders and RFPs decreases the chance of fraudulent damage claims, it also marks a shift in risk liability from the local authority to civil contractors. Up until recently, this was primarily included in infrastructure-based civil works contracts. However, with the government’s recent widespread investment in town and city centre redevelopment projects, we’re seeing these terms added to other contracts with growing frequency – especially when undertaking excavations or using heavy machinery, where the risk of damage to neighboring properties increases due to ground movement, vibration or accidental damage.

What is a Pre-Development Survey?

A ‘pre-development’ or ‘dilapidation’ survey is intended to capture a snapshot of a building’s current condition before works commence. The areas to be surveyed are generally site and project specific, but can include the interior and exterior of the main building as well as outbuildings; or garages and sleepouts, driveways, paths, pavers, boundary walls and fences. Building surveyors inspect all areas as instructed and photographically document their observations, including notes on general condition and obvious existing damage, taking measurements where possible to aid with evaluation should a future claim for damage occur. A concise photographic record of condition is produced to suit the specific project’s requirements, budget and deadlines, with all photographs retained on file for future reference.

Previously, the need to carry out these surveys was few and far between, with many contractors carrying them out themselves. Although this approach saved on initial costs, contractors sometimes found themselves facing legal proceedings when a claim was made, as stakeholders refused to back down on what may well have been existing damage that they previously unaware of. In our experience, while most home owners believe they have a decent idea about the condition of their properties, this is generally not usually the case.

The fact of the matter is that buildings move, whether due to annual changes in humidity, heavy vehicles on the road outside or minor systemic activity common in many parts of New Zealand. Even new buildings have a way of settling in, especially in the first few years following construction, which is part of the reason a defects liability period is offered with new builds.

Typical signs of movement include cracking to plasterboard wall linings, often around doors and windows, at the corners between walls or at wall to ceiling junctions. Similar cracking may also be found externally – to cladding, around windows and doors, and at wall corners. Other signs of movement include cracking to finishes between timber elements or gaps opening at corners of joinery, facings, trims, or architraves. While these signs of movement are normal and natural for any building and have usually happened slowly over a period of time, property owners may simply not have noticed them before and can therefore believe they are a result of the nearby site works.

Why Use an Independent Building Surveyor?

Today, most contracts stipulate using an independent party to complete these condition surveys. The added benefit of engaging a building surveyor over a builder or pre-purchase inspector is that they have a specialist in-depth understanding of building materials and the nature of building defects. With a technically trained eye, they know what they’re looking for and can prepare an independent, detailed report of a property’s condition prior to development.

PrendosBuilding Surveyors have extensive experience carrying out this type of survey and managing the end-to-end process. We’re not only experienced in the assessment of material damage to buildings, but highly skilled in stakeholder engagement – remaining client-facing throughout the survey process. We provide a walkthrough of our survey findings and photographs with the property owner before leaving site, which helps provide certainty and build confidence in the contractor and their intentions, while also greatly reducing the frequency of fraudulent claims. Where required, we can also provide re-inspections following the works to ensure no further comeback on the contractor.

Our independent position allows us to develop a rapport with property owners, building trust – which goes a long way towards finding a remedy to issues should they arise. Where a stakeholder has serious reservations, or feels they are being unjustly affected by the project, our surveyors can act as an intermediary for the contractor, something we’ve found to be highly advantageous when seeking a solution – especially when an owner’s position is integral to project completion.

Following the Canterbury earthquake events, many home owners are now more aware of their consumer rights, and are more likely than ever to make a damage claim. That’s why it’s so important to consider dilapidations ahead of any tender submission or prior to accepting a price, to ensure all costs are covered in the works package and chargeable to the client.

The advantages of using a Prendos Building Surveyor:

  • Technically trained eye,
  • Experience preparing detailed reports,
  • Understanding of material properties and nature of building defects,
  • Independence from the contractor,
  • Stakeholder trust,
  • Mediation skills,
  • Ability to gather and relay pertinent information from stakeholders to project managers.

Prendos provides:

  • Quick turnaround of fees,
  • Inspections within 7 days of engagement,
  • Flexibility of scope within a fixed fee,
  • Skills to deal with complications without variation. 

Sean White - Building Surveyor + Asbestos Consultant (BOHS IP402)
Sean WhiteBuilding Surveyor + Asbestos Consultant (BOHS IP402)

If you want to find out more about pre-development surveys for your next project, give us a call. We can advise on how best to approach dilapidation and even assist with preparing this section of a tender. Call us on 0800 PRENDOS for no obligation advice or a quote for surveys.

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