Property technical due diligence

Property technical due diligence in Korea

Before buying or taking over an office, logistics center or hotel in South Korea, HomeCheck surveys the condition of the building and its main equipment and reports the repair and replacement costs expected over the next ten years.

Ask about scope and a quote

Overview

What the physical due diligence is

A physical due diligence is a technical review that surveys damage to the building and the aging of its equipment to judge the work and costs needed after acquisition. As-built drawings and equipment history cards are compared with the condition on site, and the required action and timing are recorded for each repair item.

When considering a purchase, the additional spending implied by the building's condition has to be calculated. Separating items with expected outlays, such as chiller replacement or roof waterproofing repair, lets you decide what to reflect in price negotiations and what repair budget to secure after acquisition.

HomeCheck is registered in Korea as an institution specializing in safety examinations in the building and civil engineering fields. Site surveys and reports are carried out by HomeCheck's own engineers.

Purpose of the review by client type

Asset managers and REITs

Review equipment replacement and repair costs after acquisition. The timing of spending by equipment supports purchase-price negotiations and the annual operating budget.

Companies buying or relocating a head office

Facility managers confirm items to address before occupancy, such as heating and cooling capacity, electrical capacity and leaks, and use the results to coordinate the move-in schedule with the repair period.

Lenders and financial institutions

Identify damage to the collateral building and items that could interrupt operations. The findings are organized as technical reference material for assessing collateral value.

Sellers and property managers

Sales staff tidy up equipment inventories and repair records, separating the basis for answering buyers' questions from items to fix before the sale.

Where the due diligence sits in a purchase

An example sequence for a purchase. Confirm that access and document review are possible within the due diligence period set in the contract, and fix the date by which results are needed for negotiation.

Review of the information memorandum and questions
Letter of intent and negotiation
Agreement on the due diligence period and survey
Physical due diligence takes place here.
Findings reflected in the sale and purchase agreement
Closing and handover

Scope

Survey scope and methods

All accessible areas are visually surveyed and required dimensions are measured. Areas hidden behind finishes, occupied tenant spaces and the disassembly of operating equipment need separate access or test conditions, and any area not surveyed is noted in the report.

Architecture

Lifted roof waterproofing and pooling around drains
Cracking and loss of curtain-wall sealant (the sealing at glass joints on the exterior)
Leak traces and entry paths in parking ramps and basements
Thermal imaging of suspected leak and condensation areas on the exterior
Registered use and as-built drawings compared with actual use

Structure

Main members checked against structural drawings and calculations
Cracks, deflection and signs of reinforcement corrosion in exposed columns and beams
Main member dimensions measured with a laser distance meter and compared with drawings
Rebar detection to confirm reinforcement positions where needed
Need for further diagnosis of areas suspected to affect structural safety

Mechanical

Installation year and maintenance condition of chillers, cooling towers and boilers
Operating condition and control records of air handling units and ventilation fans
Corrosion and leak-repair history of risers (vertical pipes between floors)
Water supply, hot water, storage tanks and drainage
Service life and remaining life reviewed from equipment history cards and manager interviews

Electrical and telecommunications

Substation capacity and installation year of main equipment
Emergency generator test-run records and maintenance
Thermal imaging of suspected overheating in electrical rooms and panels
Management of telecom, broadcasting and access-control systems
Pre-use and periodic inspection certificates, and elevator inspection records

Fire protection

Condition and inspection records of fire pumps and sprinkler systems
Fire detectors, emergency broadcasting and exit lighting
Smoke control systems and obstructions on escape routes
Fire-stopping at penetrations through fire compartments
Fire-door closing and fire inspection documents

Civil and landscaping

Pavement settlement, steps and pooling after rain
Retaining-wall cracks, bulging and blocked weep holes
Level differences measured with a laser level where needed
Blocked drains and gutters, drainage direction
Damage to landscaping and outdoor walkways

Common to all fields: statutory inspection certificates are checked against the full request list and missing documents are flagged; equipment replacement and repair history is confirmed in interviews with facility managers and compared with records; as-built drawings, specifications and equipment history cards are compared with the site.

Process

Procedure and duration

Duration cannot be set from floor area alone. Access hours per building, the number of equipment items and the state of documents are confirmed before the survey dates and draft submission date are agreed. The final report follows fact-checking of the draft and review of additional documents.

Scope agreement and document request
The survey scope is set after confirming the transaction schedule and access conditions. Requested documents include as-built drawings, equipment history cards, inspection certificates and repair records; missing items are tracked.
Review of drawings and records
As-built drawings and equipment lists are read to decide what to verify on site. Equipment with unclear repair history or missing inspection documents goes on a separate check list.
Site survey and manager interviews
All accessible areas are surveyed visually and main member dimensions measured. Thermal imaging and rebar detection are used where needed, and managers are asked about failures and repairs.
Review of defect causes and condition
The probable cause and repair scope are recorded with the damage location and photos. For equipment, the service life, meaning the usual usable period, and the actual maintenance condition are reviewed to judge remaining life.
Repair timing and cost estimate
Repair costs are estimated at current unit prices and spread over the next ten years by year. Timing is based on service life, condition grade and safety impact.
Draft review and final report
The findings and cost assumptions in the draft are explained and additional documents are reflected. Items not verified on site and areas needing further survey are stated in the final report.

Report and costs

Report contents and repair cost estimation

Summary of main defects and expected spending

Items affecting safety and equipment with large replacement costs are listed first, with expected spending by repair timing.

Building overview and survey scope

Registered use and size, actual use, spaces not accessed and documents not obtained.

Defects and repair scope by field

Photos linked to defect locations with probable causes. Where further survey is needed to confirm a cause, this is reflected in the cost assumptions.

Repair and replacement cost table by year

Quantities, unit prices and work scope per item. Spending is classified by nature and allocated to within 1 year, 2–5 years and 6–10 years.

Main equipment and remaining life

Capacity, installation year and maintenance history of equipment; remaining usable period and replacement timing estimated from service life and current condition.

Inspection certificates and handover documents

Submission status and last inspection date per inspection type. Missing as-built drawings or equipment history cards are flagged.

Site photo register by location

Drawing locations linked to photo numbers, so the repair contractor can find the same defect on site.

Action sequence and further survey items

Urgent safety actions separated from planned repairs; the purpose of any required disassembly inspection or structural diagnosis is stated.

Condition classes (good / observe / repair / consider replacement / priority action) are used to prioritize repairs and differ from the statutory safety grades in Korea. Costs are indicative, based on unit prices at the time of estimation, exclude VAT, and vary with specifications, scope and price changes. Capital expenditure (replacement or performance improvement that extends the asset's life or value) is separated from revenue expenditure (repairs that maintain or restore current function); the accounting classification follows the client's own policy.

Building situations

Survey scope by building situation

Acquisition of an aging office

In offices 20 to 30 years after completion, replacement of chillers, cooling towers, boilers and risers can fall due at the same time. Equipment already replaced is confirmed from records, and the remaining replacement cost is organized for price negotiation and the post-acquisition budget.

Takeover of a new mixed-use building

Finishing defects, unfinished work and missing handover documents are checked. Completion and pre-use inspection certificates, as-built drawings, specifications and equipment history cards are compared to produce a list of items to complete before handover.

Preparing equipment and repair records before a sale

If installation years or capacities in the equipment list differ from the site, the sales documents need correction. Nameplates and replacement records are compared, and unverified history is marked as such for the buyer.

Medium- and long-term repair plan for an operating building

Damage to roof waterproofing and curtain-wall sealant can only be costed once the repair scope is defined. Leak paths and damaged quantities are surveyed, and work that requires shutdowns or restricted tenant access is noted in the cost assumptions.

Building types covered: offices and head offices, logistics centers, hotels and accommodation, retail and mixed-use facilities, common areas of multi-family housing.

Why HomeCheck

What is different with HomeCheck

HomeCheck has carried out building inspections, defect investigations and safety diagnoses in Korea since its founding in 2017. About 45 engineers are on staff, and survey teams are assigned to match the scope.

Direct survey by engineers of a registered institution

HomeCheck is registered as an institution specializing in safety examinations in the building and civil engineering fields, with Professional Engineers in building structures, building construction and construction safety on staff. Its own engineers survey the site and write the report without subcontracting, so the basis of each judgment and cost can be confirmed with the engineer who was on site.

Architecture, mechanical and fire staff on site together

Staff for architecture, building services and fire protection enter the site on the same day and work to each building's access hours, reducing separate visits and survey days so that a draft can be produced within the transaction schedule.

Defect records to defect-investigation standards

The survey standards used in defect investigations and litigation support are applied: location, probable cause and photos are recorded as one set, so each photo carries the basis for the repair scope and cost.

Thermal imaging, rebar detection and laser measurement

FLIR thermal cameras check suspected exterior leaks, condensation and overheating in electrical rooms; laser distance meters measure main members; rebar detectors confirm reinforcement positions where needed, leaving measured records of areas that need further survey.

Drawing-linked records in Zentrix

HomeCheck's own Zentrix software links defect locations on drawings with site photos and outputs synchronized records as a photo register and report, so repair work after acquisition can be located on the drawing.

Follow-up structural diagnosis by the same institution

Where structural concerns are found, a structural safety assessment or in-depth safety diagnosis can follow at HomeCheck using the damage records from the due diligence, without briefing a new company.

Frequently asked questions

Is property technical due diligence different from a safety diagnosis?

Property technical due diligence (physical condition assessment) organizes the condition of a building and its repair costs for budget review in a transaction or for assets held. If structural safety is in doubt and a separate judgment is needed, the purpose and scope of a safety diagnosis are defined and an additional survey is agreed.

How long do the site survey and the report take?

It depends on the size of the building, the amount of equipment and the hours when access is possible. After also confirming the availability of drawings and inspection documents, the survey date and the draft submission date are agreed; the final version is submitted after review of the draft and incorporation of additional material.

Can we commission due diligence without drawings or equipment history?

Yes. We start by reviewing the as-built drawings and management records that are available and list the missing material. Gaps are filled from site nameplates and measurements, and where there is insufficient evidence for an installation year or remaining life, the assumptions and limitations of the estimate are stated.

Are tenant-occupied spaces and the interior of finishes also surveyed?

For tenant spaces, the hours and extent of access are first agreed with the manager. Inspections that require removing finishes or disassembling equipment are agreed separately from the general visual survey, and parts that could not be accessed or checked are recorded in the report.

Can a thermal imaging camera identify the cause of a leak?

Thermal imaging is a supporting tool that uses surface temperature differences to locate suspected leaks, condensation or overheating electrical equipment. The operating state and surrounding conditions at the time of imaging must be taken into account, and if the cause is not confirmed, the suspected cause and the additional checks needed are recorded separately.

Can we tender the work using the costs stated in the report?

The amounts in the report are approximate costs based on unit prices at the time of calculation, and value-added tax is excluded. Before tendering, the actual work specifications, quantities and working conditions must be finalized. Changes of scope or price fluctuations will change the construction cost.

What items are the focus for a new building?

Unfinished work, damage to finishes and the operating condition of equipment are surveyed. Handover documents are also checked: the availability of completion inspection and pre-use inspection certificates, as-built drawings and specifications, and equipment history cards is compared in order to prepare a list of items to be supplemented before handover.

Can the seller commission the preparation of sale materials?

Yes. We organize the equipment list and replacement records to match the site condition and check for missing statutory inspection certificates. Confirmed facts are separated from items that could not be judged for lack of material, and the result can be used as review material for the buyer.

If a structural problem is suspected, can we also commission further diagnosis?

HomeCheck can follow up with a structural safety assessment or an in-depth safety diagnosis. After reviewing the cracks, deformation and similar findings identified in the due diligence, the survey methods needed and the separate scope are agreed.

On what basis is the due diligence fee calculated?

We review the total floor area, building use and number of buildings, and confirm the survey disciplines and the amount of equipment. Because the staff required varies with access conditions, the submission schedule and whether additional inspections are needed, we agree the quotation after receiving the information on the target building and the scope of report required.

Discuss the due diligence scope

We tailor the scope to the building information and the transaction schedule.

Contact details +82-2-1522-5401 help@homecheck.kr