What is a Property Condition Assessment?

A property condition report or assessment, also known as a PCA inspection, is an inspection that covers the entirety of a commercial property. It’s akin to a home inspection, except this helps a future owner assess commercial buildings rather than residential ones. They go into exhaustive details of a property, from edge to edge, top to bottom. This comprehensive list will cover what needs immediate repairs and what you should expect to replace in the near future. This way, an owner knows the potential risks of a building and can make an educated decision.

What is a property condition assessment?

Let’s dive in deeper. A property condition assessment gives a comprehensive breakdown of the physical condition of a commercial property. It sounds like a home inspection, but it’s on a much larger scale. Commercial buildings must also look at parking lots, stairwells, elevators, HVAC, fire suppression, signage, ADA access, crawl spaces, NFPA hazards, pests, and even seismic considerations. The process involves document reviews, interviews, a walkthrough survey, and cost estimates for repairs.

Based on findings, a good PCA may involve Certificates of Occupancy, accessibility surveys, Fire Code compliance, and even architectural drawings. Because, on the surface, a property condition report seems so close to a home inspection, some people believe they’re the same job. Some home inspectors will even claim they are qualified to do a PCA — but beware of this. Homes are very different from commercial buildings, as are their reports. This is why some companies specialize in one and not the other. Those companies that can offer both should have a proven track record and come well-reviewed. Ensure they have professional licenses, such as General Contractor, Architect, or Engineer.

What’s included in a property condition report?

A property condition report is quite extensive. It needs to cover every aspect of a property, from the roof to the pipes below the ground. As mentioned above, a proper assessment involves interviews, inspections, and pulling reports from a variety of municipal agencies. The object of these reports is to show the recipient the exact condition of the entire property, so an inspector must inspect everything. 

Property condition assessment checklist

The following is what you will find on a general property condition report. Please note that this list is generalized, as different buildings may have specialized aspects to report on. This list covers the many basics. 

  • Full site assessment
  • Interviews, so the consultant can understand the property or give a pre-survey questionnaire
  • City building department documents needed. This could include certificates of occupancy, fire code compliance, accessibility surveys, violations, architectural drawings, and any other publicly available documents
  • HVAC systems (age and power source)
  • Address is visible from the street
  • Parking lot properly striped
  • Unloading zones clearly marked
  • Wheelchair ramps, and handrails
  • Fire hydrants unobstructed
  • Emergency exits clearly marked
  • Gutters free of debris and animal nesting
  • Windows (Broken seals, water damage, proper weather stripping)
  • Irrigation systems
  • Elevators
  • Plumbing (types of pipe, proper water pressure)
  • Data and telephone
  • Boilers
  • Electrical (amperage, type of wiring, no double taps or damage, system is grounded)
  • Fire suppression systems
  • Foundation (cracks, slippage, trip hazards, raising and settling)
  • Structure (Cracks, moisture intrusion, staining)
  • Roof
  • Interior finishes
  • Insulation (type and density)
  • Building envelope
  • Pavement
  • Drainage (Type of soil, water doesn’t drain towards building, or congregates into pools of standing water)
  • Signage
  • Lighting
  • ADA access
  • Proper storage if using flammable or combustible chemicals
  • Other interior elements

I have my property report, now what?

Largely, it depends on what you want to do with it. There are many options. These reports can be used to negotiate the purchase price of a property, capital or strategic planning, loan approval, a triple net lease, predictive and preventative maintenance, or even insurance evaluations. It’s an important document; you’ll need to share it with any pertinent parties requiring the information within the report.

Who needs a property condition report?

These reports cover the full extent of a commercial property. This means buyers, lenders, investors, and even owners may need them. If you’re an owner or insurance agency requiring an evaluation, you’ll need a PCA. As an owner, a PCA will also outline maintenance needs, as well as inform you on how much capital you have. A lender would require one for loan approval. The buyer would also be able to use a PCA to negotiate prices. The primary reason anyone would get a PCA is they are looking to buy a commercial property. Property condition reports ensure there are no surprises, and the buyer knows exactly what they are purchasing, inside and out. If you own a commercial property, intend to own a commercial property, or work with clients that own commercial property, the odds are good you have needed, or will need in the future, a property condition report.