• ASTM E2018-15 STANDARD FOR PROPERTY CONDITION ASSESSMENTS

    Product Standards | Methagen My Commercial Property Condition Assessments will meet or exceed the ASTM E2018-15 standard for PCA's.  In August of 1999, the American Society for Testing and Materials (ASTM) published a Standard E2018-99, which 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 last updated in November of 2015 and is now known as E2018-15.

    This standard is the recognized protocol for due diligence building inspections. This protocol makes it easier for those involved with commercial real estate transactions, as the report contents and format have been well defined.

    E2018-15 Property Condition Assessments are divided into 8 steps

    1. Preform document review (certificate of occupancy, construction drawings, maintenance records, etc...)

    2. Interview maintenance personal and tenants to obtain information about the property

    3. Contact local planning & building department to perform a records search for building code violations and obtain the building and trade permit history for the property

    4. Contact the local fire department to perform a records search for fire code violations and obtain a current fire safety inspection report

    5. Perform a visual walkthrough survey of the property and take photographs

    6. Prepare reserve fund forecast cost estimates and priorities for recommended major repairs and replacements

    7. Document findings, photos and costs in a comprehensive written report

    8. Provide a lender or Insurance company reliance letter

    Comprehensive Report Contents

    1. Comprehensive and unbiased written report including photographs of typical building elevations, major systems and any deficiencies noted.

    2. Descriptions for all major building components; structure, roofing, heating, air-conditioning, ventilation, plumbing, electrical, insulation, interior finishes, exterior walls, life safety, fire protection and site components.

    3. Classification of the building components; general condition, age and estimate of remaining useful life and overall level of maintenance.  Provide opinion of building remaining economic life.

    4. Reserve fund forecast spreadsheet of costs & priorities likely to exceed $3,000 intended to provide an order of magnitude to budget for the costs involved with owning the property over the nex 5 years for remedying;

    -Seriously deferred maintenance

    -Repair of major deficiencies

    -Replacement of systems that are past their serviceable life.  

     

    The entire Standard is 21 pages long and available from ASTM at their website, www.astm.org

     

    Click on the link below to view a sample Pre-purchase Property Condition Assessment of a 50 year old 20,000 sq ft, store/office/warehouse building.

    https://www.discoverhorizon.com/dl.aspx?i=XxrTqTmWfhwzzz

     

  • Hat Property Inspections  I inspect all types of commercial buildings;

    Multi-plex buildings, Townhomes, Apartments, Condominiums, Motels, Hotels, Commercial and Industrial buildings, Warehouses, Office buildings, Retail buildings, Restaurants, Churches, Schools, Community buildings, multi-use buildings (Residential/Retail/Office)

       Reports customised to your needs;

    Reports can be customized to the following areas of auditing.

    Property Acquisition, Pre-purchase, Pre-listing

    Property Insurance, Insurance company requirements

    Property leasing, Pre-lease, Post-lease

    Property Financing, Re-financing assessment

    Property Maintenance, Due diligence, Long-term planning  

     

  • Hat Property Inspections  Property Condition Assessments

    Recognized Standard - My services conform to the astm standard E2018-15 protocol for Property Condition Assessments. This is the standard recognized by all major lending institutions and insurance companies.  I always provide a lender reliance letter with every inspection report free of charge. I also provide a detailed spread sheet containing opinions of probable costs & priorities for needed repairs or replacements over the next 5 years.

    Speed and Focus – I am geared to move quickly and focus all my efforts on providing you with the necessary information as fast as possible. My reports are designed for quick decision making, with an easy-to-follow executive summary of costs, priorities, and recommendations.

    Technical Experience - All field work and report writing are performed by Westley Franks a professional commercial building inspector, certified master electrician and radon mitigation professional with 29 years’ experience in the Medicine Hat commercial building construction and maintenance industry. Larger structural inspections may be subcontracted to Corry Bohnet P. Tech (Eng.) from Bohnet Design Solutions and the Medicine Hat Fire Service may be utilized to preform life safety and fire protection inspections.  Depending on your needs, our team may also include local licensed industry professionals to assist in field work according to their area of expertise, such as roofing, sprinklers, elevators, generators & environmental site assessments.

    Industry Recognition – Hat Property Inspections is a private professional building inspection firm that has specialized in commercial building inspections since 2019.

    Lender and Client references are available upon request

     

  • Property Acquisition Assessment

    Property Condition Assessments are often carried out when purchacing or listing a property. The PCA can be undertaken on behalf of the buyer or the seller.

    PRE-PURCHASE 

    This is the most common type of Property Condition Assessment. A person or a group of investors or an organization is about to purchase a building and want to know the condition before purchasing. 

    The benefits to the Purchaser include:

    • Understanding the condition and level of maintenance of the building structure and major systems
    • Knowing of major repairs or replacements that may be necessary and their associated costs
    • Validation of representations made by the seller about the property (e.g. the building has a new roof)
    • Greater likelihood of meeting lender’s requirements for a loan may require a PCA
    • Greater confidence and peace of mind in decision to purchase 

    For a building purchaser, a PCA prior to making an offer establishes the existing condition of the property. This helps to protect the purchaser as the true condition of the building has been documented.  This type of PCA is often used to help negotiate the purchase price.

    PRE-LISTING

    The seller of a building will likely want to know the condition of the building  prior to listing it for sale. This type of PCA will help to identify items that will affect the sale of the property such as any major deficiencies, systems that are old and will need to be replaced in the short term or any seriously deferred maintenance.

    Once identified in the PCA these items can then be addressed by the seller prior to listing or the costs can be excluded from the purchase price.  This type of PCA is often used to eliminate last minute negotiations of the purchase price.

  • Building Insurance Assessment

    Building Insurance requirements  

    Building insurance inspections are sometimes required by insurance companies if you are a new customer, the building is older or has not been inspected in a long time. Insurance companies like to be aware of risk and avoid future potential losses. The insurance company may require information about the condition, age, and life expectancy of a buildings systems such, as the Roof, Electrical, Plumbing or Heating.  The inspection is also used to help confirm replacement costs.  A building insurance inspection can be customized to provide you with any information your insurance company is requesting. 

  • Pre-Lease - Post Lease Assessments

    Property Condition Assessments are often carried out when entering into a lease and at the conclusion of a lease. The PCA can be undertaken on behalf of the lessee or the lessor, and is sometimes undertaken for both, prior to entering into a lease agreement.

    PRE-LEASE:

    For a tenant, a PCA prior to leasing is just as important as prior to purchasing. When leasing, the tenant will likely be responsible for maintaining some of the building systems. For leasing a single tenant building under a triple net lease condition, the tenant is likely responsible for the repair and maintenance of all systems, typically as “a prudent owner would.” If the building has not been well maintained or there are several systems at the end of their life expectancies, there is greater risk of unforeseen expenses for the tenant.

    The benefits to the tenant include:

    • Understanding the condition and level of maintenance of the building
    • Determining the cost of any required upgrades to the property to ensure suitability of the space for tenant operations 
    • Knowing the cost of major repairs or replacements that may be necessary over the term of the lease
    • Validation of representations made by the owner about the property (e.g. the building has a new HVAC system)
    • Greater likelihood of meeting lender’s requirements for a loan may require a PCA
    • Greater confidence and peace of mind in decision to lease the space

    For a building owner, a PCA prior to a new tenant moving in establishes the existing condition of the property. Thus, there is a fair baseline to which the tenant should leave the premises at the conclusion of the lease. This helps to protect the owner as the true condition of the building at the start of the lease has been documented.

    POST-LEASE:

    At the conclusion of a lease, there is often an obligation for the tenant to undertake certain repairs, where there has been deferred maintenance. There may also be an obligation for the tenant to bring the building back to a base condition or condition the building was in when they moved in. If there was a prelease lease inspection report done, this is somewhat easier to establish.

    However, if there is no prelease report, or there is disagreement as to what repairs are required, a post lease PCA will help to resolve the situation and bring a close to the lease. In this case, an unbiased report can serve both the owner and the tenant.

    Pre-lease and post-lease PCAs often exceed the ASTM Standard in that clients will often want to know what building upgrades my be required for tenant use, the of costs for repairs that are routine maintenance items and costs for repairs that are less than the $3,000 threshold provided in the Standard.

  • Financial Assessment 

    When preparing a new mortgage, or renewing an existing mortgage, lenders will often require their clients to obtain certain reports as part of the financing.

    Commonly this involves providing to the lender a Property Condition Assessment (PCA) on the physical condition of the property, a Phase I Environmental Site Assessment, and potentially other reports.

    There will be different requirements for these reports, depending upon the lender. Most lenders are aware of the ASTM Standard E2018 for Property Condition Assessments and thus require the reports meet this standard as a minimum. However, there may be variances to the ASTM standard that lenders require, which could include, for example, a longer timeframe for considering capital replacements. The ASTM standard requires cost estimates be provided for repairs likely to exceed $3,000 within the next few years.

    Some lenders will require the timeframe for planning capital replacements be extended to ten years or sometimes the term of the mortgage or the term of the mortgage plus two years. Additionally, lenders may require a somewhat higher cost threshold for cost estimating in the report. The ASTM threshold of $3,000 may be too low, and a threshold of $5,000 or $10,000 will sometimes be requested.  Hat Home Inspections is able to provide a PCA to meet your lenders needs.

    Through Hat Home Inspections relationship with GEM Testing Ltd - Environmental consultants, we are capable of providing Phase I Environmental Site Assessments in conjunction with our Property Condition Assessment, so that both requirements can be met for the lender through one point of contact.

    Often when the Property Condition Assessment (PCA) or Environmental Site Assessment (ESA) is required by the lender, the lender will also require a reliance letter be provided in their favor. The reliance letter allows that the lender can rely on the report as if it was addressed to them. This provides added protection for the lenders, knowing that the company will stand behind their reports. Hat Home Inspections always provides PCA reliance letters for lenders of our clients, free of charge.

    At Hat Home Inspections we also know the importance of our clients selecting an Inspection firm that is known to their lender and on their list of approved service providers. To that extent, we actively seek to ensure we are on all approved lists for the major lenders.

  • Property Maintenance Assessment

    Due Diligence

    When building owners, asset managers and property managers are estimating future major repair or replacement costs, the present condition of the building systems must be known. Reasonable life expectancies must be established, and replacement costs must be identified, based upon on-site conditions. A review of maintenance practices must also be undertaken to ensure optimum life expectancies of building systems.

    Long-term planning

    A Property Maintenance PCA often exceed the ASTM Standard in that clients will often want to know a long-term schedule of costs for major system repairs and replacements that will likely be necessary.  A 20 year schedule of estimates for replacements over the $3,000 threshold provided in the Standard are included.