Commercial Roof Inspection - Strengthen Negotiation

If you’re considering buying a commercial or industrial property, you need to inspect the roofing system as part of your due diligence — the roof is a key part of your investment. You need to know about the condition of the roof, its projected lifespan and warranty status, any idiosyncrasies, and other roof-related facts that will impact your property, budget, and possibly even your business operations for years to come.

Hire a reputable consultant to answer the following commercial roof inspection questions for you, or save some money and hire an established, full-service roofing contractor who will probably charge you a lot less (details below):

How is the roofing system is performing right now?
How long can I expect the current roofing system to last?
What can I expect to pay to maintain and repair the current roof during its lifespan?
What, if any, work needs to be completed to bring it up to warranty standards?
How might the building’s attributes and rooftop equipment impact roof performance?
What will it cost to re-roof the property?
Are there any unusual roof conditions or circumstances that could affect my future plans or use of the property?

The more you know about the roofing system before you close the deal, the better.

Here are details about what your commercial roof inspection report should include:

1. How is the roofing system is performing right now?

First you need to know the basics — what kind of roof is it and what is its current condition? Are there any leaks, ponding or visible cracks? How does the inside of the building look?

Often inspectors will recommend doing a core cut to determine what’s going on underneath the surface and to confirm how many roof decks there are. Or they’ll recommend completing an infrared survey to check for moisture within the roofing system. The seller should provide warranty information and maintenance records in advance so your inspector can compare the information to what’s observed during the inspection. Keep in mind that roofs under warranty, in good condition, and well-maintained are positive selling points that the seller will want to promote.

2. How long can I expect the current roofing system to last?

How old is the roof? How well is it constructed? Don’t be fooled by new-ish roofs — older roofing systems that have been well-constructed, well-maintained and repaired to warranty standards can outlast poorly constructed newer roofs that have been ignored or improperly repaired. Well-maintained roofs can extend roof life by 25%, which translates into 7 or 8 years for some properties. Your inspection report should include a lifespan estimate.

3. What can I expect to pay to maintain and repair the current roof during its lifespan?

Your inspector should tell you how much you should plan to budget each year for annual maintenance services, which is typically between two and four maintenance visits per year, plus inspections after severe storms. All roofs will eventually need repairs so your inspector should give you a list of what to expect based on the roof’s condition, performance, age, and special circumstances.

You should also receive information about costs associated with re-roofing the areas underneath rooftop mechanical equipment as the equipment is replaced.

4. What, if any, work needs to be completed to bring it up to warranty standards?

You don’t want warranty surprises down the road so make sure the inspector reviews the warranty terms and either confirms that the roof is in compliance or includes a list of work required to bring the roof back up to warranty standards.

Ask the inspector for cost estimates as well. This can be an important part of your negotiations. If the seller must make improvements, make sure they’re verified.

5. How might the building’s attributes and rooftop equipment impact roof performance?

Some properties have more quirks than others. You need to know if the property you’re looking at has quirks that could lead to water getting into the building. For example, if the roof has a lot of penetrations from mechanical systems or creative architectural details, you need to know how they may affect the way the roofing system will perform over time.

Also, if the property is historical, make sure to choose an inspector who has experience with older buildings. Aging brick can be especially tricky and might require the services of a waterproofing specialist when repairing or re-roofing. Or maybe even before closing the deal.

6. What will it cost to re-roof the property?

You may need to replace the roof in the not-too-distant future — how much will that cost? Re-roofing projects vary wildly depending on the size and type of system, materials used, number of existing roofs, system complexity (different roofs may be connected to one another, for example), number of rooftop mechanical systems, physical location of the property, and dozens of other variables. Your due diligence report should take all of these into consideration when estimating the cost of a new roof.

7. Are there any unusual roof conditions or circumstances that could affect my future plans or use of the property?

Your inspector should know what you plan to do with the property so he or she can make you aware of any caveats or special circumstances. Maybe the property includes two different kinds of structures or has a roof that was built in phases — this could impact proper drainage or limit adding space without a significant re-design.

Appearances can be deceiving

While conducting one recent due-diligence commercial roof inspection, Sentry Roof discovered something surprising about a property that had two roof sections. One section looked like it was in good shape but the other looked rough. It turned out that the rough-looking section was in good condition and only had some cosmetic issues, while the section that looked good was actually in poor condition and needed to be replaced. The client would therefore need to either budget for replacing the roof that was in poor condition or negotiate replacement of that section as part of the offer.

More often, however, due diligence reports uncover surprises related to roof maintenance and repair. Many property owners or management companies follow emergency-only policies, meaning they only pay attention to the roof (or other building systems) when there’s an emergency. These policies are red flags. And they can be easy to identify once you get on the roof. We have found severely neglected roofs and roof repairs made with whatever materials happened to be on the truck, like cement, which will void your roof manufacturer warranty.

Appearances can close — or kill — a sale

On the flip side, we’ve worked with sellers who have well-performing roofs that, unfortunately, don’t look very good aesthetically. For example, we recently helped a seller improve the appearance of a roofing system that looked like a giant patchwork of repairs but was doing its job anyway. The roof’s appearance had been the deal breaker — the buyer was concerned and the sale didn’t go through.

So we began a program of bringing the roof up to best industry standards by reworking the patchwork-looking repairs with repairs that matched the existing roof and met the specifications of the warranty, which also brought the roof back into compliance.

The expense for our client was not major — a few thousand dollars — and within a year the roof looked as good as it performed. The next prospective buyer closed the deal.

Due diligence inspection reports can have long-lasting value

The inspection reports that Sentry provides helps our clients improve their negotiating positions by providing in-depth facts and analysis — there’s nothing like the truth to make your case.

Our inspectors review all of the documents provided by the seller, go to the property, inspect carefully and take photos, document anything that looks like it might be cause for concern, prepare cost estimates based on industry norms for the area, and then present a complete report that’s ready to be shared with all parties, including financing professionals.

We’ve also been asked by buying clients to communicate directly with sellers or sellers’ representatives in addition to providing the reports. We are happy to have conversations on our clients’ behalf to explain how we came to our conclusions and to help with the negotiations, if we can.

If you buy the property for which you have a due diligence commercial roof inspection report, you not only have a comprehensive baseline for your roofing system but you also have a roadmap for maintenance, repairs and (eventually) re-roofing.

Please feel free to contact Sentry Roof if you’d like more information on the inspection process or would like us to inspect a property. Our crews provide roofing services across metro Atlanta and our inspectors can conduct inspections and provide consultant services anywhere in the the southeast.