General Knowledge of Cost to have a Building Inspected

Building Condition Assessment

A Property Condition Assessment (PCA) checks the state of a building’s core performance, substructure, and superstructure, M&E systems, including heating and cooling. A (PCA) also includes the exterior elements of the property, including site grading and drainage, condition of the roadway, and servicing infrastructure and lighting. Building Condition Assessment (BCA) is an integral part of any property’s maintenance strategy. Overall, a BCA is requested by a property manager or owner when there are building or property issues that require improvements. The financial institutions may also need it to finance the building.

Specifically, the owner is responsible for bearing the cost of commercial building inspection services, unless a contrary agreement is made with the seller. You can expect to pay anywhere from $2,000- upward to a building inspection company, depending on the size, age, and location of the building.

The standard to use for PCA is ASTME 2018-15.

The Property Condition Assessment (PCA) should have four parts:

1. Documentation Review and Interviews

2. Walk Through Survey

3. Preparation of Opinion Costs to Remedy Physical Deficiency

4. Property Condition Report

• Walk Through Survey:

The walk-through survey aims to carry out visual inspection of the building to ascertain information on building systems and components. A single site visit to the building is usually expected. The site visit is referred to as the walk-through survey.

Photographs: The consultant/field observer should endeavor to document observed physical deficiencies by use of photographs or sketches.

Scope:During the site visit, the field observer should conduct a walk-through survey of the subject property to observe physical deficiencies of material systems and components.

Based upon the walk-through survey and information obtained in accordance with ASTM-E2018-15, costs are to be developed for the proposed solutions to the physical deficiencies noticed. These costs are to aid the consultant in developing an overall perception of the physical condition of the property.

Costs should not be provided for repairs or improvements that could be classified as:

• Cosmetic or decorative

• Part of a building renovation program

• Tenant improvements/finishes

• Renovate to reposition the subject property in the marketplace

• For warranty transfer purposes

• Routine or regular preventive maintenance

Also Read: What do Commercial Building Inspectors look out for During an Assessment?

• The Opinion of Costs Attributes

Threshold Amount for Opinions of Costs- the material physical deficiencies observed and the corresponding opinions of cost should be:

• In line with the market value and complexity of the subject property

• Not be minor or insignificant

• Should serve the purpose of the user.

Costs that are either singularly or collectively less than a limit value of $3000 for similar items are to be excluded from the PCR. In instances were four or more items together exceed $3000, but a total of over $10,000 such items must be included. ASTM-E2018-15 recognizes that for properties of large scope or market value, the thresholds mentioned above may be inappropriate to be meaningful to users. The user can adjust these cost threshold amounts. The revised cost threshold should be disclosed within the PCR’s Executive Summary under the heading “Deviations from the Guide.”

• Actual Costs May Vary

Opinions of Cost should only be seen as a precursor, order of magnitude budgets. Actual costs may likely vary from the consultant’s opinions of costs depending on the design, type of materials, type of equipment and the manufacturer, quality of contractor, type of contract used to carry out the project, market conditions, etc. Thie guide recognizes that certain opinions of costs cannot be developed without further study.

•Estimating of Quantities

ASTM E2018-15, does not recommend that consultants provide exact numbers or precisely identify the locations of items or systems as a yardstick for preparing costs.

•Basis of Costs

The origin of cost information used by the consultant may be from one or more of the following resources:

  • User-provided unit costs
  • Owner’s historical experience costs
  • Consultant’s cost database or cost files
  • Published commercial data
  • Cost information from contractors, vendors, or suppliers

The guide stipulates that opinions of costs should be provided with approximate quantities, units, and unit costs by line item. The consultant may use his experience to decide if the unit cost method in-appropriate to decide the probable cost of physical deficiency due to its complexity. In such a scenario, the consultant may apply a lump sum for a particular line item. The guide also stipulates that opinions of costs should be limited to the construction-related cost that is commonly provided by contractors who perform the work. The costs related to business-related, design, construction management fees, general conditions, and indirect costs should be excluded.

•Costs for Additional Study

In some instances, determining the best solution or scope requires detailed study or design, probing and exploration of various repairs schemes, or combination of both.

•Costs Segregation

The Opinions of costs should be segregated within the PCR into the categories of immediate costs and short – term costs.

•Immediate Costs

Immediate costs require immediate action as a result of any of the following:

  • Material existing or potentially unsafe conditions
  • A material building or fire code violations, or
  • Physical deficiencies that, if left uncorrected, would be expected to result in system failure within one year or will result probably in a significant escalation of its remedial cost.

•Short-term costs

The costs to solve physical deficiencies, such as delayed maintenance, that may not be required immediately, but require repairs or replacements that should be undertaken on a priority basis in addition to routine preventive maintenance.

SUMMARY

The first step in a building assessment is to conduct a walk-through survey, and this is done to inspect the building for physical deficiencies. Physical deficiencies include the presence of noticeable defects. The opinion of cost identifies the material physical deficiencies and provides suggested remedies complete with its costs. Prices should be isolated into two categories of immediate costs and short-term costs. The opinion of probable cost gives the building owner a very good idea about the future expenses he is going to incur.

Ataur Rahman

President at prycoglobal
Ataur Rahman is the president at Pryco Global Inc (PRYCO). He has more than a decade of experience in the leadership role, majorly into Oil & Energy and Heavy Civil & Commercial Construction Projects. He has turned around a couple of loss-making businesses unit into profit centers through effective Cost Management, Process Improvement, Business Strategy Realignment, Reorganizing Organizational Structure.
Ataur Rahman

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