What Is a Property Condition Assessment?
A property condition assessment (PCA) is an evaluation of the current conditions of the property along with a list of recommendations on repairs that are anticipated within the next 20 years. It is usually requested before a property is purchased from a new buyer.
PCAs are part of what is generally termed “due diligence.” PCAs may be performed as a part of a property transfer and correspond with an environmental site assessment as well. Lenders often require a PCA as part of the loan to value risk assessment for financing.
Property Condition Assessment Process
Property Condition Assessment Services
A PCA is like a house inspection but on a larger scale. People need to search for companies with inspectors who are typically architects or engineers, with a higher level of expertise in building systems. Fleis & VandenBrink (F&V) has experience with commercial building assessments and can complete your PCA.
A PCA process goes through several simple steps. The steps include:
- An in-person interview
- Physical walkthrough
- Document review
- Final report
Every property is unique and has a custom checklist. However, the following are standards when it comes to the PCA inspection. Depending on the property, this can go fairly quickly or could take some time to complete.
The first thing the inspector will do is gain access to the property. The inspector will then interview the current owners for the history of the property.
Next, the inspector will look to the building department for any records of work done in the past. He or she will then review any aerial images of the site to see what they may not see by just walking through the property.
The next step is to put together a checklist of items to inspect while on the property. The inspector then walks the property and looks at the electrical, foundation, plumbing, structural workings of the property, and more.
The final step is to prepare a report with all findings along with cost estimates for anticipated repairs.
Property Condition Report
The property condition report will list the components of the building and their condition. It will let the buyer know if there are issues and share a table of estimated costs to address deficiencies that are either immediate, short term, or can be anticipated to be needed over the next 20 years.
Property Condition Assessment Checklist
A property condition assessment checklist includes documenting field work, a building systems evaluation, a building evaluation, and a site improvements evaluation.
The property reviewer will conduct interviews and look at HVAC, plumbing, electrical, and fire suppression systems. They will also evaluate the building foundation, structure, interior finishes, and site improvements, including drainage, signage, lighting, and compliance with the Americans with Disabilities Act (ADA).
Distinctions of Property Condition Assessments
Property Condition Assessments vs. Appraisals
A PCA is a disclosure from the seller of the various parts and systems of their property. The seller should provide a list of the features of the property and any deficiencies that need to be addressed over time. An appraisal is a professional estimate of the value of the property and is not part of the PCA process.
Property Condition Assessments vs. Facility Condition Assessments
Both property condition assessments and facility condition assessments are important. However, the property condition assessment (PCA) is usually a one-time document, whereas a facility condition assessment (FCA) is often updated and used over time. A PCA is an evaluation of the condition of a property with a list of recommendations for repairs over time. An FCA is a more exhaustive list of the material components of each system. It serves as a tool to maintain property and provides a more detailed itemized list of repairs and replacements of systems. A PCA is usually requested before a property is sold. An FCA is requested by asset managers with long-term goals.
Our Property Condition Assessment Services
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Frequently Asked Questions
What Is Inspected During a Property Condition Assessment?
An inspector will visit a property and spend hours to days observing and documenting the property including but not limited to:
- Structural components
- HVAC systems
- Electrical systems
- Plumbing systems
- Interior finishes
How Much Does a Property Condition Assessment Cost?
The typical cost of a property condition assessment is based on several factors, including:
- Age: Generally, as buildings age, the lifespan of the building components and mechanical systems require more time to assess and calculate the cost to replace.
- Size: The size of the building increases the cost of the project as there are more complicated mechanical systems to assess, and it takes longer to cover a larger space.
- Type of building: The type of building impacts the cost. Generally commercial office buildings will cost less than industrial.
What Is a Property Condition Report?
Once the property has had a full assessment, the inspector will put together a written property condition report. The report will list any areas of concern, suggestions for repairs or continued inspections, and future cost estimates.