A major hurricane can change the way a business owner looks at commercial property. A building may appear ready for use while hidden storm damage, unresolved repairs or insurance concerns create problems later.
For business owners considering purchasing property affected by a major storm, taking the time to investigate the building can help reveal issues that could affect the property’s value, insurance coverage and the cost of getting the business up and running.
Looking beyond the visible damage
One of the first steps is to find out whether the property experienced hurricane-related damage and what was done to address it. Business owners should look for signs such as:
- Flooding
- Roof or exterior damage
- Mold or moisture problems
- Electrical or plumbing damage
- Structural issues
- Damage that was repaired before the property was put on the market
Repair records can provide valuable information about what happened after the storm and whether the work was properly completed. Business owners may want to request invoices, inspection reports and insurance claim records. It is also important to check whether permits were required for the repairs and, if so, whether those permits were obtained, inspected and properly closed. Unresolved permits or incomplete repairs can create problems for a business owner who takes over the property. They could lead to unexpected repair costs, code compliance issues or delays when making renovations. These issues can become especially important if the business needs to make improvements before opening or wants to sell the property in the future.
Insurance is another important part of the investigation. A property’s previous hurricane or flood damage may affect the availability and cost of commercial coverage. Business owners should find out what insurance will be required, whether the property has a history of claims and whether additional coverage may be necessary for flood or other storm-related risks.
A hurricane does not necessarily make commercial property a bad investment. However, business owners should understand the property’s history before committing to the purchase. Having the property’s records, insurance information and purchase contract reviewed by a qualified legal professional can help identify potential problems before they become expensive obstacles to operating the business.
