Property Condition Assessment is a general risk assessment of the basic structure and mechanical systems as they pertain to a piece of commercial real estate. The property condition assessment is meant to be only a cursory risk assessment. It is not an Inspection of the actual function and failures of the structure and the mechanicals of the building. The common standard of practice for commercial property condition assessments and property condition reports is the ASTM E2018 STANDARD GUIDE FOR PROPERTY CONDITION ASSESSMENT: BASELINE PROPERTY CONDITION ASSESSMENT PROCESS.
The property condition assessment is done by a field observer who does a visualwalk through survey and interviews of the maintenance staff of the building. The field observer also reviews the records kept by the city building department and the fire department. The survey is an overview of the buildings condition and gives recommendations regarding the systems and their condition based only on the visual review and interviews done by the field observer.
Property condition assessments would review a representative sampling and compare the components to average comparable components for that unit type and age than note if the equipment is newer (probable remaining life of up to five years or more) middle age (the unit is likely to have less than five years remaining life,) or older (nearing, at or beyond the units normal life and subject to failure at any time.) It does not entail testing all of the equipment however.
Property Condition Assessments allow the client to do a less expensive risk assessment before concentrating specialist knowledge as a follow up to the Property Condition Assessment. This reduces doing full technical inspections to items that appear to be in satisfactory condition. Where there is greater risk found during the property condition assessment a client may follow up with a second phase or inspection of those items found to be a concern.
This follow up phase would be for individual system technical inspections by either the original inspector (if technically knowledgeable) or a licensed or “certified” specialist. Where required there may be need for specialists such as an architect, or a structural engineer or civil engineer. There may be need to have licensed electricians, plumbers, or heating & cooling contractors evaluate safe condition of equipment. Where systems or structural items are found failed it would be desirable to have bids done as to likely replacement cost.
The findings are compiled in the Property Condition Report (PCR). It documents the overall condition and major structural and or mechanical concerns found in the survey. A property condition report specifically excludes incidental repairs and normal general maintenance. A property condition report is normally a written document accompanied by pictures of the general representative condition and major concerns. There will be an estimated cost section to help in budgeting for the noted repairs and upgrades.
An INSPECTION would normally entail a complete inspection of the whole building on its interior and its exterior, from the roof to the foundation. They are detailed as to specific condition of items sampled. The inspector would do a visual review of all areas of the building and its systems. He would inspect the mechanical systems by opening the normal access plates and service compartment covers to allow an interior assessment of the particular piece of equipment.
Heating equipment is normally more fully inspected. At a minimum the system is run through a normal cycle. Many inspectors will do carbon monoxide testing of the heating equipment as part of their inspection. Some will even do full heat exchanger inspections by partially disassembling the compartment of roof top HVAC’s as well. The air distribution ducts should be inspected where accessible.
The electrical distribution system is normally inspected by means of doing representative sampling of the plugs, lights, and other normal outlets throughout the building. In many cases when the building is occupied some of the systems can not be turned on and off. The distribution panels should be opened through removal of the covers to inspect the wiring and the breakers. The main entry cables and transformers should be inspected for visual signs of problems. The wiring feeds are normally inspected where visible in the ceiling plenums and in unfinished basements and or utility areas.
The plumbing systems are inspected for general function and leaks. The supply and waste lines are inspected visually where accessible.
The overall structure is inspected including but not limited to the roof, exterior walls, windows and doors, paved surfaces, interior ceilings, walls, floors, ceiling plenum (void above the drop ceilings where so equipped) and or the attic are inspected.
In smaller buildings a client may choose to have the entire building inspected or surveyed from top to bottom. There is normally representative sampling of systems in the building or buildings. IE X number of plugs, lights, windows and doors. The primary systems (plumbing, electrical panels, heating units, cooling units etc) are normally all tested in a full inspection unless it is otherwise agreed to use representative samples.
In many cases, depending on the type and size of the building, the client may choose to select a smaller representative sampling of units and systems. This is commonly done for economy sake to reduce the cost of the survey or inspection. By doing this the client gambles on the sampled systems being “representative” of the overall units and systems. This would be common for instance in a muti-family apartment building where viewing each apartment would be too time consuming. The data compiled, (assumed to be representative of the whole) is than interpolated as to likely type and condition of represented equipment throughout. Commonly this option requires that the sampling is random and it is prudent to select a mix of types and locations in the building or buildings. It is likely that the inspectors’ insights could help to guide the selection of the best locations to use as samples.
Usually the findings are than compiled at the inspectors’ office and the findings presented in a final inspection report. Some inspectors’ rely almost solely on the written word and others use both the written document and photos’ that may accompany the written report for clarification. Many inspectors may caption the pictures for clarity. The findings should not only discuss the issues found but also the way in which inspection was done. It should include recommendations from the inspector as to follow up testing and or corrective action required. In most cases there will be a cost estimate for purposes of budgeting repairs and future replacements.
Retired MI Home Inspector