Firstly what is property condition assessment (PCA)? PCA is a non-destructive method of inspection to highlight the current conditions of a property. A professional will do a walkthrough survey and perform property research based on interviews and document review. The professional will provide a detailed property condition report (PCR) conforming to ASTME_2018-15 standard, elucidating the physical defects, concerns in the current state of the building and recommending probable costs for its repair.
The information in PCR is beneficial for various uses:
- It helps the financial institution in determining the remaining useful life of the subject property before approving finance over the mortgage for the subject property,
- It guides a potential buyer to assess the condition of a subject property the buyer is interested in,
- It enlightens the owner with current conditions of the subject property before ending a long term lease,
- It assists the owner in planning for the next five to ten years of renovations.
Since considerable time and capital investment are required in maintaining, purchasing, leasing, or financing a commercial property, it is imperative to choose the right building inspector to perform a building condition assessment for your property. A commercial building inspection from a non-competent inspector would have missing attention to detail and substandard information in the PCR, which can cost additional money and make one lose valuable time in the financing processes. A few of the critical factors to consider while choosing a building inspection firm are mentioned in the article Commercial Building Inspections – Tips for Finding a Reliable and Competent Building Inspector.
It must be noted that PCA is a due diligence procedure that can assist a person in making informed decisions based on professional judgment. PCA lowers down the risk of losing considerable time and monetary investments by improving the decision-making process based on professional recommendations. Hence, to successfully reduce the effort and risk in decision-making, a competent professional is required to provide unbiased and accurate recommendations. It is essential to hold discussions with few shortlisted assessment candidates before finalizing one inspection firm. The person who requires a PCA must interview various competent contenders and discuss the property’s concerns, assessment’s scope, and pricing. The decision to hire a firm should be based on various factors, including discussions with potential financial institutions, referrals from friends and colleagues rather than only on pricing as a PCR from a non-certified inspection firm might not be accepted by the financing institution.
Furthermore, suppose the scope of services also includes an additional environmental assessment. In that case, the selection must be based on whether the contracted firm can provide professional judgment relating to environmental concerns. Generally, an Environmental Site Assessment (ESA- I, II) is not included in a PCA’s scope. Still, an inspection firm that can do both the PCA and ESA- I or II can give a combined quote with competitive pricing rather than the requirement of hiring multiple inspection firms.
In continuation to the scope of a PCA, one must understand that a PCA is a non-intrusive inspection and has certain limitations to it. The information reported in the PCR is based on a visual inspection and the information provided by the documents shared by the owner and answers to the interview questions of the inspector provided by people who have known the building. The desired outcome of a sound and unbiased professional judgment and recommendation can only be achieved by the availability of information from previous PCR’s, building plans, maintenance records, floor plans, environmental studies, and safety system records must be made available to the inspector. Regardless, hidden elements of the building such as underground utilities, soil conditions, and the presence of mould, rodents, and pests, and exterior inspection of high-rise buildings are not covered in the PCA. However, suppose the inspector finds any concerns, defects, or visual evidence of the above-stated conditions. In that case, he can recommend further inspection by certified professionals to assess the risk related to those concerns.
To conclude, it can be established that to have a successful outcome of a property condition assessment, the person ordering a PCA should:
- Shortlist a competent inspector based on the needs,
- Beware of substandard and incompetent market players,
- Consider PCA as due diligence towards their investment and time,
- Have the documents required for review ready for the inspector,
- Keep in mind the scope and limitations of PCA.
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