Asset or Sleeping Liability: The Case for Façade Technical Due Diligence

This blog will discuss the reasons why the technical due diligence (TDD) process is so important if you want to avoid costly failures. In the context of this blog, and looking specifically at façades, failure does not just mean a façade leak – it means a component of that façade making its way to the ground with the potential to injure or kill people and damage property. 

Defects are waiting to be found

Buildings are assets that can change hands numerous times in their lifetime. The condition of a building also changes and typically they will need more T.L.C. as they age. For purchasers, there are generally two choices – get to know the building (warts and all) or, ignore the façade and hope nothing bad happens on your watch.

CarrotAll buildings have defects or shortcomings and they want to be repaired and maintained. They dangle an incentive carrot in front of their Owners and Property Managers. They want you to fix problems before they become bigger problems and they will usually show you their issues if you care enough to look. If you choose to ignore those issues or do not look for them, at some stage the building will reposition that incentive carrot somewhere it can’t be ignored.

The unwelcome surprise

A couple of years ago I inspected a façade on a 6 storey office building where the cladding system had failed. During stormy weather, some of the 30+kg composite cladding panels had come loose and fell onto the roof of the next-door property.

Some of the issues I observed whilst abseiling were:

• Design (general) – Cladding and framing not appropriate for this type of application.
• Fixings – corroding, undersized and sporadic spacing.
• Movement control – cladding panels spanned inter-storey lines and no movement joints present to the full height of the elevation.
• Installation – huge discrepancies in setting-out and excessive use of packers to bridge gaps.

This façade may have looked fine from the ground (prior to failure), but it was an abomination close-up. What surprised me the most was that it had not failed sooner. There would be no ‘fix’ for this façade – a brand new system would need to be designed and installed.

As the failure occurred during a severe weather event, the building insurance provider had been engaged. The findings of the various investigations, from the full team of specialists, concluded the failure was due to inherently poor design and material selection and further exacerbated by poor workmanship. Therefore, the building insurance would not be funding the design and installation of a new façade.

During a conversation with the loss adjustor, I enquired if the Owner had obtained a Technical Due Diligence Report when they were purchasing the building. The majority of what I saw would have been visible prior to the acquisition and would have prompted a building surveyor to recommend a new façade. There had been no Technical Due Diligence though. This was all a very unwelcome surprise to the Owner and, a very costly one at that.

The lesson

No building is without issues but the difference between a building being an asset or a liability is often whether the Owner knows about those issues before they sign on the dotted line.

If you are considering acquiring a commercial property, gather as much information about the building fabric as possible. The cost of a thorough technical due diligence is nothing compared to the costs of replacing a major element or the potential litigation costs when a failure occurs.

By Victoria Richardson