Sapoa Measuring Standards

Buyer beware! Did you measure your building before you bought it? Do you know SAPOA (South African Property Owners Association) has measurement standards?

Recently a client of mine conducted a due diligence on an investment property I was selling him. I had given him the building plans and the size of the building (as given to me by the Seller of the property) but the industrial property measurement had not been verified. As a standard procedure, this particular investor gets a land surveyor to measure the property and the site on which it is built. This is something I would definitely recommend. The result was the land surveyor determined the building to be 153m² smaller than the size of the building as per the owner’s record.

On a large property, you may ask, what difference does 153m² make? If you take the size of the discrepancy multiplied by the price of R4750 per m² the actual difference was R 725,000 which is significant in my (and the investors!) opinion. A further effect of this is that the rentals which were perceived to be market related were in fact over market. This would have affected the rate in the future, that would have to be obtained when the property required re tenanting.

This lead me to go back to my copy of the SAPOA Guidelines for measuring commercial and industrial property which was published a number of years ago. Interestingly, according to SAPOA, in the case of single tenant industrial buildings, the  rentable areas differ to  that with a multi tenanted tenant building,. In the case of a single tenant property, the measurement is taken from the outer walls whereas in the case of  a multi tenanted industrial building the measurements are taken from the inner walls.

In the deal mentioned earlier, the land surveyor had given the investor the “inner wall measurement” and had also not included an office built above a storeroom in the warehouse. This resulted in a smaller difference but it was still significant.

My advice is for you to purchase an electronic measuring device. They are inexpensive, particularly when you look at them possibly saving you money by alerting you to a building that is smaller than you are led to believe!

Knowing the correct size of  your building could also give you  grounds to object when the next municipal valuation is conducted and reduce your rates, if the council has the incorrect size of your building on record.

Conversely, I have seen investors buying buildings where they have found the size of the buildings are far larger than the seller understands them to be. It is here that the Seller could have benefited significantly by understanding the size of their property.