The reason for the error is that maybe there values with no comma "," in it. To exclude these values use the where clause. Run this script to see if the error occurs:

Select
Substring(RESIDENTIAL,1,Patindex('%,%',RESIDENTIAL
)-1) AS Area
,Substring(RESIDENTIAL,Patindex('%,%',RESIDENTIAL
)+1,4)AS PostalCode
From nadd2
WHERE Residential like '%,%'