Commercial: Standard for Property Condition Assessment

Property Condition Assessment Quote

In August of 1999, the American Society for Testing and Materials (ASTM) published a Standard E2018-99 that defined "good commercial and customary practice for conducting a baseline Property Condition Assessment (PCA)." This standard was specifically written for commercial real estate and largely intended for commercial real estate transactions. The standard was updated in March 2002 and renamed E2018-01.

There is now a defined protocol for due diligence building inspections. For years, there has been a well-defined standard for performing Environmental Site Assessments. This new protocol should eventually make it easier for those involved with commercial real estate transactions, as the report contents and format has been well defined.

The PCA has been divided into four steps:

1. Perform document review (drawings, maintenance records, etc.).

2. Perform a walkthrough survey of the property.

3. Prepare costs for remedies recommended.

4. Document findings and costs in a written report.

As part of the PCA, the Consultant should contact the local building department and local fire department to check for building or fire code violations and ensure that a certificate of occupancy was issued for the building.

Recommended report contents include:

1. Probable costs and options only for repairs likely to exceed $3000. These costs should be for immediate repairs (within one year), and for short-term repairs (within one to two years).

2. Photographs of typical building elevations, major systems, and major deficiencies noted.

The entire standard is 23 pages long and is available from ASTM at their website, www.astm.org.

An Inventory Study is recommended for small to medium size residential and business condominiums and town houses.

A Reserve Study can be done for small to medium size residential and business condominiums but with a different twist-- a Maintenance Inventory with a modified capital replacement Study.

The Maintenance Inventory-Capital Replacement includes an evaluation, remaining serviceable life, and maintenance and replacement costs in the local time scheme of things. This is a much more useful tool for smaller and medium size condominiums and townhouses. A real reserve study is one done on professional software using national statistical averages on longevity and costs designed to keep larger condominiums complexes in compliance with regulations. However, for the small to medium properties, it is not useful for them. The costs with Reserve Studies are prohibitive for the small and midsize condominiums and townhouses.

The report format for a Maintenance Inventory could be a simple spreadsheet showing the necessary information, or a more detailed review of the systems can be integrated with the study. Again, the needs of the client will dictate the level of information provided in the report. For more information about Maintenance Inventory studies, please call our office.