- Real Estate
Common Commercial Building Inspection Services Defined.
Types of Inspections
What types of commercial building inspections are common?
If you live in the local Pittsburgh area there are generally three or four key types of commercial building inspections done on a regular basis and requested by clients. I am sure this is similar in other cities and towns as well. There are more types of inspections conducted but they are specialized and are not within the scope of this article or hub. I will mention a couple of them at the end of this article.
Before I begin we must define a commercial building or property and what a typical inspection implies. A commercial property is defined as the buildings or structures or improvements located on a site of commercial real estate which is not residential over four apartment units. In the City of Pittsburgh however they deem anything over three apartment units commercial. Again a commercial builing generally include structures such as buildings with residential units over four units, mixed-use buildings, medical facilities, enertainment facilities, strip malls, motels, hotels, manufacturing facilities, storage facilities, restaurants, factories, retail stores, and office buildings. These structures are determined by the zoning classification and ordinances adopted in your community. The policy of individual communities varies to some degree in the descriptions of commercial areas for zoning purposes.
The inspection of a commercial structure or building is typically defined as the process of an inspector gathering information through visual observations during a walk-through assessment of the subject property, conducting research about the property, and then generating an inspection report about the condition of the property based on the observations made and research by the inspector. An inspection report will often contain photographic evidence of findings that will be reported on. A commercial inspection typically requires the inspector or field observer to make observations, conduct research, and report findings. The inspector should only represent their client's interest only.
There are basically three types of inspections conducted on commercial property which account for the majority of inspections. The requirements and standards of each are defined either by the local building code and its requirements, an industry or regulating standard by a recognized body, or by discussion and agreement with the client for their particular needs and requirements.
1. Municipal Government Building Inspection: This is a mandatory inspection for compliance with the building code. It is to assure compliance with the law and the building code adopted. In the State of Pennsylvania it is the state wide Uniform Construction Code enacted in 1999. The specifics of the inspection is determined by the building permit work and the type of work being completed. It may be a building, plumbing, electrical, mechanical, structural, fire protection, accessibility and ADA requirements, energy compliance, elevators, or another type inspection or a combination thereof which if often the case. In summary these are mandatory inspections and there is no discussion about them. They are required by law and are for the safety of the occupants and the community. The failure to obtain these inspections may result in stop work permits, demolition of completed work, legal action, and other remedies available to the local authorities.
2. Property Maintenance Inspection or Commercial Building Inspections: This second type of inspection is a grown up home inspection for residential and commercial buildings and their sites. It is often completed for the same reasons a home inspection is requested by a home buyer. The potential purchaser of the commercial building wants an assessment of the property and its components to learn its conditions and to negotiate a better purchase price if it is warranted or just to obtain leverage or feel comfortable with the purchase. There are inspection firms which try to define the standards of the inspection here but in the end it is between the inspector and the client as to what inspection standards will be conducted or the scope will be. The commercial inspections standards are different than a home or residential property inspection due to the more complex components that will be evaluated and the requirements that may be imposed upon them from the local authority for an occupancy permit. It is different from jurisdiction to jurisdiction but there are common items assessed and reviewed. The reader should understand that there is a difference between a home inspector and a commercial building inspector and the skills required to complete a property inspection. While there are common items there are often items beyond the skill of a home inspector during a commercial inspection. Again, it is best for the inspector and client to meet and discuss what is most important for the client.
The inspection requirements for a commercial inspection is more specialized than a home inspection. The commercial building inspector must have a deeper understanding of the various systems and standards of construction in these types of buildings including the code requirements for commercial issues.
In summary this inspection may be called by different names but it is an assessment of the present components or lack of components and their physical condition to determine what repairs will be needed in the immediate, near future, and long term if the purchase is completed.
3. Property Condition Assessment (PCA's) in accordance with ASTM Standard E-2018: The third type of inspection is in accordance with a recognized and established standards for the inspection of commercial buildings in the United States. In this instance it is the known as the Property Condition Assessment in accordance with the American Society of Testing and Materials E-2018 Guidelines for a commercial property entitled "Property Condition Assessments: Baseline Property Condition Assessment Process." These guidelines define what to inspect and report on. It is a uniform procedure so anyone can know how the inspection or assessment was completed.
Commercial property and building inspections (Property Condition Assessments or PCA's) are important for clients seeking to know the condition of a property or real estate they may be purchasing, leasing, or already own or planning to own or lease. This service is used by lenders often in their lending and portfolio management operations. These predefined ASTM commercial inspection standards help both the PCA consultant and the client to understand the scope agreed to for the inspection including the systems or areas to be inspected. The ASTM standards have become an industry guideline. While the guidelines in my opinion have gaps and shortfalls these gaps and shortfalls can be amended if client authorize and agree and it is documented.
Depending on clients needs or accepted risks, some inspections can become fully technical requiring additional specialists, contractors, or may require other industry professionals and their special skills to obtain valuable insight. The inspection or assessment will incur various costs and time frames as agreed or negotiated between the commercial inspection company and the client. The ASTM E-2018 Baseline Guideline Standard however only requires a baseline assessment within the predefined standard.
The PCA performed in accordance with ASTM guidelines is site-specific in that it relates to the physical condition of real property improvements on a specific property parcel of commercial real estate. The ASTM guidelines do not address additional unrelated issues in real estate transactions such as economic obsolescence, the purchase of business entities, or physical deficiencies relating to off-site conditions or that are not directly related to the property. However it is recommended that if the field observer or inspector has specific knowledge this information should be furnished.
When the inspection or Property Condition Assessment is completed, a written report is prepared and delivered to the client within the time agreed to by the parties. The Property Condition Report may include such items as concerns observed, recommendations for repairs or further inspections, review of available documents, interviews with individuals who may have knowledge of real estate, compliance with local ordinances and other requirements that are site specific.
The ASTM E 2018 guidelines define acceptable commercial and standard industry practice's in the United States of America (and where agreed to) for conducting a baseline property condition assessment (PCA) of the improvements located on a specific parcel of commercial real estate The goal is to identify and communicate physical deficiencies to a client.
The term physical deficiencies means the presence of obvious defects or deferred maintenance of a subject property’s material systems, components, or equipment as observed during the inspectors inspection. This definition excludes deficiencies that may be remedied with routine maintenance, miscellaneous minor repairs, normal operating maintenance, and conditions that generally do not present material physical deficiencies of the subject property or are considered minor.
The ASTM E 2018 guideline outlines procedures for conducting a walk-through survey to identify the subject property’s material physical deficiencies, and outlines various systems, components, and equipment that should be observed by the consultant field observer and reported in the property condition report (PCR).
The ASTM E 2018 property condition assessment includes procedures for reviewing documents, performing research, and conducting interviews to supplement the physical inspection so as to assist the inspector and the client in their understanding of the subject property and in the identification of physical deficiencies.
The report resulting from completing a PCA in accordance with the ASTM E 2018 guidelines incorporates the information and findings obtained during the inspection, document review, and the Interviews. It also includes estimates of costs for repairs or remedies of the physical deficiencies identified. In short a determination is estimated for the cost of replacement of certain components generally over the period five to twelve years.
The objectives in the development of the ASTM E 2018 Standards are as follows: (1) define good commercial and customary practice for the PCA of the commercial real estate improvements; (2) facilitate consistent and pertinent content in property condition reports; (3) develop practical and reasonable recommendations and expectations for site observations, document reviews and research associated with conducting PCAs and their preparation; (4) establish reasonable expectations for PCRs; (5) assist in developing an industry baseline standard of care for appropriate observations and research; and (6) recommend protocols for consultants for communicating observations, opinions, and recommendations for the end user or client. This is quoted from the ASTM Guidelines for Property Condition Assessments.
In my opinion a client is better served with a commercial property inspection geared towards their specifi concerns and needs. This way an inspector and consultant can focus on gathering that specific information. This may be more economical than an ASTM inspection and will often be as comprehensive. This should be discussed by the parties prior to any agreement as often clients are not knowledgeable enough on types of inspections and their limitations. The ASTM assessment is a stand alone format and if a client requests a PCA in accordance with ASTM Baseline Standards the field observor or inspector has the guidelines needed to complete the project. It is a uniform guideline for commercial buildings in the United States. In summary, there are industry, corporate, and government functions that require the ASTM Standard. If you or your situation does not then a commercial building inspection can be of benefit to you.
The above types of inspections (as well as others) have one thing in common. All are based on the opinion of the inspector and may vary from inspector to inspector based on the same conditions reviewed. As I have recommend in my home inspection hub it is recommended that you discuss with your inspector the concerns you have and the reasons you are hiring or retaining a building inspector.
I mention earlier other types of inspections that are conducted. The following are a few of them.
A. Construction Draw Inspection: This is an inspection for a lender to determine the status of construction and the percentage of building completion so that the lender can advance the builder costs incurred during construction. It is a verification process used in most commercial building construction environments and residential projects. The National Association of Construction Draw Inspectors have their own website.
B. Commercial Lease Inspection: This is an inspection where the leaser retains the inspector to verify the condition of the leased space to verify the conditions for the purpose of the lease to protect his interests in case the lesser claims lessee damaged the property.
C. Safety Inspections: This is an inspection by a residential or commercial client who is seeking to perform due diligence of their property to maintain the property condition and for the protection of the occupants. These inspections often identify problems that the owners are unaware. A knowledgeable inspector is a key part to protecting your interests. There are safety inspections in accordance with certain industry standards which clients also request.
D. Environmental Site Assessments: This is an inspection conducted to determine if there are any environmental issues with the property. This is separate from a property condition assessment. The inspection guidelines are determined in accordance with ASTM E-1527 and other standards. The inspections or assessments are from visual to actual testing of materials. There is a Phase 1, Phase 2, and Phase 3 all of which have different requirements. There is also a Transactional Environmental Screening conducted in accordance with ASTM E-1528. In short, all of these inspections can be classified as due diligence inspections.
The number of inspections and the types completed are too numerous to mention in this article but are as varied as there are clients and their specific needs.
If you are looking for a commercial building inspection firm in the Pittsburgh Pennsylvania area please consider Ronald C. Bachner and independentpropertyinspection.com. You can also call an inspector of your choice in your area. We specialize in commercial building inspections and in protecting our clients interests. We are former certified building inspectors by the State of Pennsylvania and currently certified by the International Code Council.
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We perform residential and commercial real estate inspections in Pittsburgh, Pennsylvania, Ohio, West Virginia and Maryland. These inspections include ASTM property condition assessments (PCA), real estate due diligence inspections, construction draw