The Structural Survey: Why it is important and what to expect

This week's blog post is an extract of the Irish Property Buyers Handbook 2015, by Carol Tallon, dealing with the structural survey:

THE STRUCTURAL SURVEY

Why it is important and what to expect

The structural survey is a comprehensive inspection of the property

in question, carried out by a qualified surveyor, registered architect

or chartered engineer at the request of the potential home-buyer. It

should not be confused with the lender’s survey, which in reality is

merely an independent valuation report. The purpose of the

structural survey is to give the purchaser an unbiased evaluation of

the overall condition of a property, and to highlight any aspects that

may need upgrading, repair, replacement or ongoing maintenance.

Crucially, the report arising from the structural survey will provide

the buyer with the information needed to make an informed decision

on whether to go ahead with purchasing the property.

Unlike the bank survey, which is mandatory, a structural survey is

optional, although any property professional would advise that the

buyer undertake one before making the single, biggest investment of

their life. Undertaking this due diligence and attaining the

knowledge of defects or issues needing attention may discourage

buyers from proceeding with the purchase outright, or may help to

plan for work that is likely to be necessary in the short and medium

term. Armed with this survey, the buyer should save a significant

sum of money on defects that the seller may now have to correct

before the sale is agreed. Knowing the cost of even small repairs,

which can run to thousands of euro, can be a great negotiating tool.

Aspects of the property that are routinely checked in the course of

structural survey are as follows:

External Areas,  Internal Areas , Other

1. • Roof and chimneys
2. • Guttering and flashing
3.   Settlement cracks
4. Movement in foundations
5. Windows and doors
6. Drainage
7. Boundaries
8. Path and driveway.
9. Interior attic space
10. Ceilings and floors
11. Interior walls
12. Windows and doors
13. Heating system
14. Plumbing and Electrics
15. Working fireplaces
16. Ventilation and damp
17. Insulation.
18. Compliance with Building Regulations
19. Boundary infringements
20. Boundary conditions

There are some limitations to the survey, which may vary from one

survey to another. Buyers will be made aware of these limitations by

the surveyor, either in advance of the survey or within the report

document. If there is any ambiguity, buyers are advised to seek

clarification and not to assume anything.

The most notable limitations tend to be as follows:

1. • Roofs and chimneys in excess of three metres generally will be examined from ground level.
2. • The building fabric will not be breached in the course of the inspection. The survey is strictly on the basis of what is visible or accessible.
3. Plumbing and heating systems will be activated where connection permits, but will not generally be tested unless there is reason to suspect a problem.
4. Sewers are inspected to the extent of lifting covers on manholes. Once again, testing will only be recommended where there is some reason to suspect something.

The age of the building to be surveyed is a very important

consideration. Buyers should not be fooled by a modern, well-finished

home. The age is no guarantee of a sound structure. In fact,

many experts maintain that the overall quality of new home

construction over the past decade has deteriorated somewhat. Older

houses have their own particular issues to contend with – for

example, non-regulation windows or access – but they are generally

well-constructed. When looking at the structural condition of the

property, the engineer will pay particular attention to defects that are

inconsistent with the age of the property. The engineer will issue a

full report to the buyer, which will set out areas of the property

needing attention and make recommendations.

Defects or areas needing attention may cause a re-negotiation of

the purchase price. In addition, defects that are inconsistent with the

age of the house should flag concern. For example, if the engineer

finds a hole in the roof of a modern, three bedroom semi-detached

house, a question mark may arise over the quality of the property.

On that point, some buyers in the past have chosen not to request a

structural survey where the house in question is less than 10 years

old and covered under the original structural defect insurance

scheme, usually HomeBond. This is nonsense. Protection against

defects for 10 years is of little benefit if the buyer cannot identify

those defects.

It should be noted, however, that very few buildings are without

any defects. The surveyor will furnish a lengthy report, many pages

long, that will list observations, opinions and recommendations on

issues that would not necessarily be classed as defects, so buyers

should be prepared for this and not panic. When issues or possibly

defects are identified, it does not necessarily mean that it is not a

quality property. The buyer must work through the surveyor’s report

and determine which issues are consistent and to be expected, which

issues are easily remedied and which issues are essentially deal-breakers.

Whatever the outcome, knowing in advance is essential –

forewarned is always forearmed.

Engineers’ fees may vary, depending on the age and extent of the

property, together with the location, or specifically, the time and

travel involved. A survey generally will take between one to two

hours. Buyers should expect to pay somewhere in the region of €300

to €450 plus VAT. If the buyer is waiting to sign contracts of sale, the

engineer usually will give a verbal assessment of the property on the

day of the survey – the equivalent to a thumbs up or thumbs down.

The written report generally will issue within a period of five days.

By engaging a suitably qualified surveyor with professional

indemnity insurance, buyers are assured that they are covered in the

event that they suffer financial loss as a result of neglect, error or

omission in the course of producing the structural survey.

Snag List

A snag list will be necessary for buyers purchasing a newly-built

home. It is not a structural survey, as discussed above, but rather a

checklist of minor defects that the builder or developer must

complete prior to the sale closing. The vast majority of newly-built

properties are covered by a building guarantee or under a structural

guarantee scheme, such as HomeBond or Premier, which protects

the occupant of the home against specific significant defects for a

period of 10 years. This protection applies to the property, not the

owner; therefore, subsequent buyers will enjoy this protection for 10

years after the completion of the building.

The snag list consists of all the items that must be finished or

fixed by the builder or developer before the sale is finalised. Builders

have a poor reputation for after-sales service, so it is crucial that all

outstanding items are dealt with before final monies are paid over. In

certain circumstances, the sale might be allowed to proceed on the

stated agreement of works to be carried out, but this leaves the buyer

in a vulnerable position and is therefore not recommended. An

exception to this might be the Irish weather causing huge delays in

finishing the garden to specification. In this instance, the purchase

might go ahead and close contracts subject to a small portion of the

funds being withheld from the builder until such time as the garden

works are completed.

As with the structural survey, a snag list is not mandatory,

although it should definitely be regarded as essential by the new

home-owners. Snag lists do not need to be carried out by a

professional in order to be effective. In fact, some of the most

comprehensive lists are carried out by the buyers, although engaging

a professional engineer or surveyor has a number of benefits. Chiefly,

their training and expertise suggests that they will uncover minor

faults or needed finishing touches that the buyer might never have

noticed. Secondly, they are likely to demand a higher quality finish

than buyers might know to demand. Thirdly, buyers receive the

benefit of professional indemnity insurance, as already discussed

above. If any issue or defect is overlooked at the snagging stage, it

may cost money to remedy it. By hiring a professional, that person is

answerable to the buyer for any work carried out.

Buyers who have some experience in construction or who have

purchased property previously might feel confident about compiling

a thorough snag list themselves. If so, there is now a wealth of

information available through Irish and UK websites, where buyers

can read tips, learn from other buyers and download comprehensive

DIY snagging checklists. One good resource is www.snagging.org.

If there is reason for concern, however, buyers should speak to a

qualified engineer.

New Technologies

It is important to note, in the context of a survey or snaglist being

prepared, that building, heating and electrical systems have become

very complex with the introduction of renewable energy systems

such as heat recovery units, ground source heat pumps and solar

panel heating to name a few. It may be necessary to engage the

services of a specialist to report on the conditions of such works in

addition to the structural survey.

KEY POINTS FROM CHAPTER 17

•  The structural survey is an inspection of the property in

question, carried out by a qualified surveyor for the

potential home-buyer.

•  It is not to be confused with the lender’s survey, which is

merely an independent valuation report.

• The purpose of the structural survey is to determine the

condition of the property and to highlight any aspects that

may need repair, replacement or ongoing maintenance.

• The structural survey will provide the buyer with the

information needed to make an informed decision on

whether to go ahead with purchasing the property.

• The buyer should be aware that older properties have

inherent structural issues and these rarely will be

considered deal-breakers. Buyers should be concerned

about issues that are inconsistent with the age and price of the

property.

• Further negotiations may take place to deal with issues

arising from the report but only if they are inconsistent with the age

and price of the property.

• A snag list consisting of all the items that must be finished

or fixed by the builder or developer will be necessary for

buyers purchasing a newly-built home.

Impact of a New Government on the Property Market

The Property Industry Ireland (PII, a lobby group of IBEC) have issued a industry report looking at the impact a new government (when we get one!) will have on the property market.  The report is called 'The First One Hundred Days in Housing' and predicts that the number of new homes delivered in 2017/2018 will be determined by policy decisions made within the first three months of the new Dail.

If this is true, then the entire country will be watching with interest as low supply is the single greatest challenge in the marketplace at the moment.  This is particularly true in Wicklow although Wexford is starting to see some  new developments completing and coming on stream.  Here at Kinsella Estates, we  are delighted to be launching a new scheme shortly, you can register your interest with us by email Michael@KinsellaEstates.ie and we will release details shortly.

The lack of housing supply means that people are stuck.  Owner-occupiers are stuck in so-called 'starter homes' that are badly needed for the private rental market;  first-time buyers have mortgage approvals ready-to-go but cannot find suitable new homes and large home-owners are unable to trade down when the time comes as there are no local homes available.  This has a knock-on effect for social housing locally and the rental market in general.  The obvious solution is to make more new homes available and that is what is need now from government.  Given uncertainty surrounding who will be our new Taoiseach, it is difficult to guess how the Cabinet will be made up.  If priority is given to social housing, then delivery is likely to happen where the housing lists are longest, for example, in Dublin.  However, if priority is given to first-time buyers, then delivery will be focused on delivering affording houses along the commuter belt, for example Wicklow.  

Since 2009, the construction industry has delivered significantly less housing units per year than were needed.  Seven years on, the shortage has reached crisis point.  We can see this every day with the level of enquiries we get from  buyers who are frustrated with the lack of choice out there.  For people who are considering selling their home or investment properties over the next few years, it makes sense to do so before new supply starts becoming available over the next 12-24 months.  If this is something that you have been thinking about, you can speak with me directly on Tel:  +353 53 94 21718 and I can talk you through local supply and demand in the immediate area.

The PII has made several recommendations to the impending new government, calling for the  appointment of a cabinet level minister with oversight for housing, infrastructure and planning policy.  At the moment this position is at the level of junior minister.  A cabinet level minister would report directly to the Taoiseach.  They have also called for emergency planning and development legislation (for three years) to fast-track new private and public housing developments through the planning process.  It also recommends a review of the tax-base of property, taking in the local property tax (LPT), stamp duty, VAT and development levies.

I would love to hear your thoughts on these recommendations - do you have any to add to these, whether as a future buyer, seller, investor or developer in the Wicklow/Wexford area?

For specific queries or to speak with a local property expert about your buying and selling needs in Wexford, Wicklow and surrounding areas, contact Michael, Alan or Eileen Kinsella at www.KinsellaEstates.ie . 

Alternatively, you can email me directly on michael@kinsellaestates.ie or telephone : +353 53 94 21718