To put it into context, it is helpful to begin with the term due diligence, or DD. Due diligence is a comprehensive assessment of risks and relevant information. In a property transaction, the property itself and the risks associated with its purchase or sale are carefully examined and evaluated. Depending on the information required by the buyer or seller, due diligence may comprise several different areas of assessment. In addition to financial, legal and tax due diligence, and assessments relating to occupational health and safety, these may include technical and environmental due diligence. Technical Due Diligence focuses on the structural and technical condition of a property. Environmental Due Diligence examines potential environmental risks, such as contaminants in the building fabric or in the soil beneath a site. Together, these two areas are referred to as Technical and Environmental Due Diligence, or TEDD.

As part of a TEDD assessment, we examine potential defects or damage to the building, including settlement cracks in underground car parks or basement levels. The environmental assessment considers potential risks associated with contaminants in the building fabric or in the soil beneath the site. We also look at the environmental quality of the site and potential risks to receptors such as human health or groundwater. Across all areas of TEDD, we consider not only the technical findings but also the associated financial risks. In addition, we provide services beyond the traditional scope of due diligence and assess matters that may be important to the overall evaluation of a property. These include geotechnical or structural engineering considerations relating to demolition, refurbishment or new construction, including the property’s suitability for alternative uses. Our services may also include infrastructure planning, for example in connection with the development of a new site or a redevelopment project.

TEDD can support both buyers and sellers. It provides information that may be relevant to the valuation of a property and, consequently, to decisions about the purchase or sale price. If structural damage, environmental damage or a significant maintenance backlog remains undetected before a transaction, the property’s actual condition may not be fully understood. As a result, risks that could affect its value or future use may not be taken into account.

Property transactions are often conducted within tight timeframes. It is therefore important to agree a realistic programme with the client at the outset and organise the assessment accordingly. Early coordination between the parties involved is equally important. These may include property consultants, lawyers, auditors and other specialists. We therefore liaise with all relevant parties from the beginning of the process.

Underground car parks provide a useful example. Anyone acquiring an existing underground car park today may find that it was not designed to accommodate modern vehicle sizes. Many underground car parks date from the 1960s or 1970s. Components with low-density concrete were also frequently used during this period, potentially increasing the risk of corrosion. In the worst-case scenario, the structure may no longer have sufficient load-bearing capacity and may require a subsequent stabilising coating. Water damage is another potential weakness. It may, for example, result from defective bituminous sheet waterproofing on external walls. Renewing the waterproofing externally is often complicated, particularly in city centres where surrounding buildings are located close to the structure. Although new internal waterproofing approaches are available, the most practical and economically viable method must be evaluated individually for each property. Ultimately, a completely new, tailor-made utilisation concept for the underground car park must be developed together with the owner in order to avoid horrendous conversion costs. Preventive due diligence advice before buying a property prevents unpleasant surprises. Our experts at CDM Smith are able to detect the first signs of hidden defects - even without costly and time-consuming investigations or drilling.