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How to conduct a property condition assessment?

A Property Condition Assessment (PCA) is a type of architectural due diligence report that details the physical condition of a property or structure. While a PCA is comparable to a home inspection in some ways, it is mostly used in commercial real estate transactions. A PCA needs a competent professional or real estate consulting service to evaluate a building from its roof and façade to its primary mechanical systems such as HVAC, plumbing, electrical, and fire protection, which are then described in terms of their general condition as well as any serious problems detected.


The PCA then analyses this information to make recommendations on when a system or component is most likely to need repair or replacement, along with estimated costs. These expenses are divided into three categories: immediate, short-term, and long-term. Immediate needs are life-safety or code violations that must be addressed before closing, short-term needs are priority repairs that should be completed within a year of closing, and reserve-term needs are future repairs that will take place during the reserve-term, which can range from 5 to 20 years depending on the project and funding.

Why Is PCA Necessary?

PCAs provide buyers and lenders with an accurate and professional assessment of a property’s existing physical condition and how it affects its short- and long-term financial value. A PCA should be performed concurrently with other environmental due diligence services, such as a Phase I Environmental Site Assessment (ESA) or Industrial Hygiene, as part of the due diligence process (asbestos and lead surveys).

Who Does PCA?

PCAs are carried out by qualified specialists in line with ASTM Standard E2018. ASTM is a global standards organization that creates and publishes technical standards for environmental professionals on a wide range of materials, products, systems, and services. ASTM E2018-15 establishes the foundation for a PCA’s scope and components, language and definitions, and consultant credentials. Check PCA with your real estate consulting service provider.

How Is PCA Done?

Three important components of the procedure used by a skilled professional to do Property Condition Assessment:


First Step

The first step is to gather and review all of the property’s documentation. To have a deeper understanding of the property, its components, and its history, the PCA consultant will conduct as much research as feasible. Construction paperwork, assessing records, capital expenditures, maintenance logs, warranties, certificates of occupancy, and site surveys are all reviewed by the consultant. Local building and fire agencies get Freedom of Information Act (FOIA) requests inquiring about any outstanding code infractions. To estimate structural risk, natural hazard classifications such as flood maps, wind zones, and seismic zones are examined.

Second Step

The field observer visits the site and analyses the building and its various components to determine general conditions and identify areas of deferred maintenance and things requiring repair or replacement. This is the next and most significant phase in the PCA process. The walkthrough is visual and non-intrusive, meaning it does not require the removal or movement of materials, nor does it include equipment functional testing. The field observer tries to answer three questions for each system or component: what are the size (number, rating), age, and condition? These three factors decide when a system or component will need to be replaced and how much it will cost.

Third Step

The interview should take place at the same time as the walkthrough. A field observer meets with someone knowledgeable about the property whenever possible while on site. They can then ask specific questions regarding the building systems and components they’re assessing. Consultants look for people who have a deep understanding of the property, such as the owner, property manager, maintenance technician, or tenant.
The PCA is a technical report that details any defects that are time-sensitive or hazardous and must be addressed immediately, as well as other defects that are not as time-sensitive but may indicate future problems, and cost tables with budgetary estimates for addressing the recommended repair items.

Final Words

The quality of a PCA report is only as good as the professional who conducted it. It is best to use only experienced providers with licensed architects or professional engineers on board to analyze the project, examine the asset, or both to assure the highest quality report. Cross-check the PCA report with your real estate consulting service provider.

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