Selling a Warehouse or Industrial Building That Needs Repairs

This page is for owners of a warehouse, plant or flex building that needs work. The roof may be near the end of its life, the truck court broken up or the sprinklers due for attention, or there may be open code items. It covers what buyers check, some of the towns in our seven counties that tie repairs or inspections to a sale, and how an as-is sale handles the work.

We're part of a family-owned business that has been operating for over 15 years, and we buy industrial buildings as-is across Philadelphia and South Jersey. Town rules change, so confirm the one that applies to your property with the municipality.

Can you sell a warehouse that needs repairs?

A warehouse that needs repairs can be sold as it stands, with a worn roof, broken paving, aging fire systems or open code items. Direct Warehouse Buyers buys as-is and prices the building in its current condition, so nothing has to be fixed before you sell to us. Some towns have repair rules of their own, and this page covers the ones we found.

As-is means the offer already accounts for the condition. You don't hire contractors, wait on bids or carry the building while work gets done, and you don't have to clean it out. If racking, cranes, compressors or other equipment will stay, say so early so the offer can list what's included. For a plant, our page on machinery in a plant sale covers what can stay.

With a building that needs work, explaining what you know helps. A short list of what you know, such as the roof that leaks over the loading docks or the dock levelers that stopped working, helps more than a clean-looking walk-through. What a buyer finds on its own during due diligence is harder to price fairly than what you tell it up front.

Should you fix a warehouse before you sell it?

Fixing a warehouse before a sale makes sense only when the work adds more to the price than it costs you in money and time. Repairs can help a listed building compete, but you pay up front and carry the building while the work gets done. An as-is sale moves the work to the buyer, who prices it in. Compare what you'd net each way.

Small, cheap fixes that make the building easier to show, like clearing debris from the docks, can help any route. Big-ticket work is different. A new roof or a repaved truck court pays off only if the buyer you end up with values it at more than it cost. You also take the risk that the job runs long or over budget.

The buyer's detailed inspections take place during the due diligence period, after the purchase agreement sets the price. A list of defects at that stage can become a request for a lower price or a credit at closing. An offer made after a walk-through, with the visible condition already priced in, leaves less to reopen. Our cost guide covers repair credits and carrying costs alongside the commission.

What do buyers check on a warehouse that needs work?

Buyers of a warehouse that needs work check the big-ticket systems first. Those are the roof, the paving and drainage, the fire protection, the electrical service and heating, plus the loading docks, doors, structure and floor slab. They also check open code violations and permits. Records for each one, even incomplete ones, make the building easier to price.

Records may have gaps, especially for a building owned a long time. Say what you know and what you don't. If a repair was done without a permit, tell the buyer early, because it can surface when the buyer checks the municipality's records.

In Philadelphia, paving and other impervious area count toward the stormwater bill. Our page on truck terminals and yards shows how the Water Department charges for it.

Do Pennsylvania towns require repairs before a warehouse sale?

Some Pennsylvania townships and boroughs require a use and occupancy certificate or an inspection before a sale, but state law limits what they can demand. Under Act 133 of 2016, a sale can still close on a temporary certificate when a resale inspection finds violations. The buyer then gets 12 months after the purchase to fix them. Philadelphia relies on a records-based certification instead.

What Act 133 does

Act 133 covers municipalities that require a resale use and occupancy certificate. If the inspection finds violations but none is substantial, the town issues a temporary certificate. If it finds a substantial violation, one that makes the building unfit for human habitation, the town issues a temporary access certificate. That lets the buyer in to make repairs, but not to occupy the building until they're done.

The 12-month period may not be shortened, and a municipality may negotiate a longer one. The town also can't demand an escrow or a bond to issue the certificate. In practice, that moves the repair obligation to a buyer who's willing to take it on, which is how an as-is sale works anyway.

How towns in our counties apply it

The rules, fees and lead times differ by municipality. Haverford Township in Delaware County, for example, says the use and occupancy application must be filed at least 30 days before settlement. Bensalem, Falls, Warrington and Milford townships in Bucks County each require a certificate or an inspection when a commercial or industrial building sells. Our county pages list the towns we checked: Bucks County, Montgomery County and Delaware County.

Philadelphia

In Philadelphia, the step every sale needs is a Property Sales Certification from the Department of Licenses and Inspections, which state law requires to sell any property in the city. It costs $139, takes about five business days, and comes from City records, not an inspection. It states the zoning, the last established use and any uncorrected violations, and those become part of what the buyer weighs. The City doesn't require a new certificate of occupancy when ownership changes, as long as the approved use stays the same. Our Philadelphia page covers what Philadelphia requires before a sale, including the certification.

Do New Jersey towns require repairs before a warehouse sale?

Several towns in Camden, Burlington and Gloucester counties tie a certificate or an inspection to the sale of a commercial or industrial building. Riverside requires all violations to be corrected before ownership changes, though the town may let a buyer take them on by notarized affidavit. Life, health, safety and welfare violations still have to be fixed before the sale.

Riverside

Riverside's code requires a certificate of occupancy before any change in ownership of a commercial or industrial establishment, and it says all violations must be corrected before the change. The town may still issue the certificate if the buyer assumes responsibility by notarized affidavit. The buyer then has 60 days to make the corrections, and no extension over 30 days can be granted. That route isn't open for violations involving life, health, safety and welfare. Those must be corrected before ownership or occupancy changes. So in Riverside, the inspection decides what has to be fixed before closing.

Other towns

Other towns tie a certificate to the sale, and some of them require an inspection. What happens when an inspection finds problems depends on the town's code, so check it early. The City of Camden requires a resale occupancy certificate before any property in the city is sold: the seller applies, and the certificate is issued to the buyer. Burlington Township requires the owner to apply for a certificate of continued occupancy before any nonresidential building is sold. Pennsauken requires a new occupancy certificate whenever a commercial property gets a new owner or tenant. The certificate sections of our county pages list the towns we checked: Camden County, Burlington County and Gloucester County.

When a town's inspection finds items that must be fixed before closing, we go over them with you before setting a closing date. Who handles them, and how the price accounts for them, goes into the purchase agreement.

Open violations, permits and insurance claims

We buy buildings with open violations and open permits. Tell us what you know, including any notices you've received, and the offer takes them into account. Philadelphia's certification lists uncorrected violations, and some towns' resale inspections check for open permits.

If the building has fire, storm or water damage and an insurance claim is still open, tell us at the start. The purchase agreement can say what happens to the claim and any payment from it, and your insurer and accountant can tell you how that affects you.

How does a buyer price the repairs a warehouse needs?

A buyer prices repairs from what it sees on the walk-through, what's in your records and what its due diligence turns up. Direct Warehouse Buyers' offer prices the condition we've seen and what you've told us, and the purchase agreement spells out when the price can be revisited. Telling us about known problems up front lets the offer price them from the start.

If due diligence turns up something material that neither of us knew about, we'll show you what we found and talk it through before anything changes. A structural problem hidden behind racking is one example.

What to have ready

• A short list of the problems you know about, with photos if you have them
• Roof repair invoices, any roof warranty and the year of the last replacement
• The latest sprinkler, fire alarm and fire pump inspection reports
• Any violation notices, open permits and certificates from the municipality
• Repair quotes or engineering reports you already have
• Details of any open insurance claim
• A list of equipment that would stay with the building

Selling a building that needs work to us

Send the address and a few words about the condition. After we walk the building with you, our written as-is offer sets out the price, the closing date we propose and which costs each side pays. We charge no commission and no fees.

We can't promise a set number of days. When you sell to us, you choose the date, within the required steps and the due diligence period in our offer. In a town with a resale inspection, those steps include the certificate. How It Works covers each step from the first call to closing.

Related situations: an older or obsolete building, a vacant building or a tenant leaving and environmental problems.