Potential buyers of commercial properties in California need to consider various real estate risks. A major risk is that the state is more prone to earthquakes, posing greater threats to property owners and their occupants.
Buyers must ask sellers to disclose earthquake hazards to help them make an informed decision. Among the hazards are fault ruptures, ground shaking, landslides and tsunamis. The California Seismic Safety Commission even created an earthquake safety guide for potential and existing commercial property owners.
Check the location
It is important to inspect the location of the building. An engineering geologist or geotechnical engineer can determine if the area is part of an earthquake fault zone.
They can also confirm if the location is prone to environmental hazards like landslides and tsunamis. Moreover, they may check the stability of the ground and the foundation of the building.
Inspect the building
There is also a need to check if the building is strong enough to withstand earthquakes. Licensed professionals who can accomplish this are engineers, architects, building contractors or property inspectors.
California law has an additional requirement for buildings that were built before 1975. If they have wood-frame roofs or floors, the seller must strap all water heaters. The same applies to buildings with masonry walls or precast concrete.
Determine the necessary repairs
After conducting thorough inspections, engineers, architects, contractors and inspectors may recommend repair work and estimate construction costs. It is also crucial to ask the local building department if there is an ordinance that mandates seismic retrofits.
When a buyer funds the repairs to fortify the building, they may get a property tax exemption. They could also bring up the repair costs when renegotiating with the seller.
Demand full disclosure
Aside from getting the earthquake disclosure report, a buyer should know that real property transactions require full disclosure of all details and risks. If a seller does not comply with this, you could hold them liable for deceit, misrepresentation or fraud.