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Standard Guide for Property Condition Assessments: Baseline Property Condition Assessment Process
1.1 Purpose— The purpose of this guide is to provide a framework for conducting a property condition assessment (PCA) of the primary improvements at commercial real estate properties by performing a walk-through survey and conducting research as outlined within this guide.
1.1.1 Physical Deficiencies— The goal of the baseline process for property condition assessments is to identify and communicate material physical deficiencies to a user.
1.1.2 Walk-Through Survey— This guide outlines procedures for conducting a walk-through survey to identify physical deficiencies, and recommends various building systems and building components that should be observed by the field observer.
1.1.3 Document Reviews and Interviews— The scope of this guide includes document reviews, research, and interviews to augment the walk-through survey to assist with understanding the subject property and identification of physical deficiencies.
1.1.4 Property Condition Report— The work product resulting from completing a PCA in accordance with this guide is a property condition report (PCR). The PCR incorporates the information obtained during the Walk-Through Survey, the Document Review and Interviews sections of this guide and includes opinions of costs for suggested remedies of observed physical deficiencies.
1.2 Objectives— Objectives in the development of this guide are to:
1.3 Out of Scope Considerations and Excluded Activities— The use of this guide is strictly limited to the scope set forth herein. Section 12 and Appendix X1 of this guide identify, for informational purposes, certain considerations and physical conditions that may exist on the subject property, and certain activities or procedures (not an all-inclusive list) that are beyond the scope of this guide but may warrant consideration by parties to a commercial real estate transaction to enhance the PCA. Users should work with a knowledgeable consultant to identify additional considerations and concerns to be evaluated. The decision to inquire into out-of-scope considerations or extend the assessment to include excluded activities is to be made by the user. No assessment of out-of-scope considerations is required for a PCA to be conducted in conformance with this guide.
1.4 Organization of This guide— This guide consists of several sections, an Annex and two (2) Appendixes.
Section 1 is the Scope. Section 3 on Terminology contains definitions of terms both unique to this guide and not unique to this guide, and acronyms. Section 4 sets out the Significance and Use of this guide, and Section 5 describes the User's Responsibilities. Sections 6 through 11 provide guidelines for the main body of the PCR, including the scope of the walk-through survey, preparation of the opinions of costs to address physical deficiencies, and preparation of the PCR. Section 12 provides additional information regarding out-of-scope considerations, activities, and procedures (see section 1.3). Annex A1 provides guidance relating to specific asset types that are considered as integral to this guide. Appendix X1 describes additional concerns a user may consider in modification of the scope of the PCR. Appendix X2 and Appendix X3 outline an approach to limited accessibility screenings.
1.5 Multiple Buildings— If the subject property is comprised of multiple buildings, it is the intent of this guide that all of the primary improvements are discussed in one PCR.
1.6 Safety Concerns— This standard does not purport to address all of the safety concerns, if any, associated with its use. It is the responsibility of the user of this standard to establish appropriate safety, health, and environmental practices and determine the applicability of regulatory limitations prior to use.
1.7 This international standard was developed in accordance with internationally recognized principles on standardization established in the Decision on Principles for the Development of International Standards, Guides and Recommendations issued by the World Trade Organization Technical Barriers to Trade (TBT) Committee.
1.1 Purpose— The purpose of this guide is to provide a framework for conducting a property condition assessment (PCA) of the primary improvements at commercial real estate properties by performing a walk-through survey and conducting research as outlined within this guide.
1.1.1 Physical Deficiencies— The goal of the baseline process for property condition assessments is to identify and communicate material physical deficiencies to a user.
1.1.2 Walk-Through Survey— This guide outlines procedures for conducting a walk-through survey to identify physical deficiencies, and recommends various building systems and building components that should be observed by the field observer.
1.1.3 Document Reviews and Interviews— The scope of this guide includes document reviews, research, and interviews to augment the walk-through survey to assist with understanding the subject property and identification of physical deficiencies.
1.1.4 Property Condition Report— The work product resulting from completing a PCA in accordance with this guide is a property condition report (PCR). The PCR incorporates the information obtained during the Walk-Through Survey, the Document Review and Interviews sections of this guide and includes opinions of costs for suggested remedies of observed physical deficiencies.
1.2 Objectives— Objectives in the development of this guide are to:
1.3 Out of Scope Considerations and Excluded Activities— The use of this guide is strictly limited to the scope set forth herein. Section 12 and Appendix X1 of this guide identify, for informational purposes, certain considerations and physical conditions that may exist on the subject property, and certain activities or procedures (not an all-inclusive list) that are beyond the scope of this guide but may warrant consideration by parties to a commercial real estate transaction to enhance the PCA. Users should work with a knowledgeable consultant to identify additional considerations and concerns to be evaluated. The decision to inquire into out-of-scope considerations or extend the assessment to include excluded activities is to be made by the user. No assessment of out-of-scope considerations is required for a PCA to be conducted in conformance with this guide.
1.4 Organization of This guide— This guide consists of several sections, an Annex and two (2) Appendixes. Section 1 is the Scope. Section 3 on Terminology contains definitions of terms both unique to this guide and not unique to this guide, and acronyms. Section 4 sets out the Significance and Use of this guide, and Section 5 describes the User's Responsibilities. Sections 6 through 11 provide guidelines for the main body of the PCR, including the scope of the walk-through survey, preparation of the opinions of costs to address physical deficiencies, and preparation of the PCR. Section 12 provides additional information regarding out-of-scope considerations, activities, and procedures (see section 1.3). Annex A1 provides guidance relating to specific asset types that are considered as integral to this guide. Appendix X1 describes additional concerns a user may consider in modification of the scope of the PCR. Appendix X2 and Appendix X3 outline an approach to limited accessibility screenings.
1.5 Multiple Buildings— If the subject property is comprised of multiple buildings, it is the intent of this guide that all of the primary improvements are discussed in one PCR.
1.6 This standard does not purport to address all of the safety concerns, if any, associated with its use. It is the responsibility of the user of this standard to establish appropriate safety, health, and environmental practices and determine the applicability of regulatory limitations prior to use.
1.7 This international standard was developed in accordance with internationally recognized principles on standardization established in the Decision on Principles for the Development of International Standards, Guides and Recommendations issued by the World Trade Organization Technical Barriers to Trade (TBT) Committee.
4.1 Use—This guide is intended to reflect a reasonable baseline process for the completion of PCAs for use on a voluntary basis. No implication is intended that use of this guide be required to have conducted a PCA in a commercially prudent and reasonable manner.
The baseline process described in this guide is subject to a moderate level of uncertainty. Because the objectives, risk tolerance, schedule, and budget of users can be dramatically different there are varying levels of PCA and due diligence that can be exercised that are both more and less comprehensive than this guide that may be appropriate to meet the objectives of the user.
In accordance with ASTM protocols, this guide does not recommend a specific course of action or scope of work. Users should consider their requirements, the purpose that the PCA is to serve, and their risk tolerance to refine the scope of assessment and consultant qualifications in order to establish appropriate objectives for the assessment.
4.2 Clarification of Use of Assessments:Â
4.2.1 Specific Point in Time—A user should only rely on the PCR for the point in time that the observations and research were conducted.
4.2.2 Site-Specific—The PCA prepared in accordance with this guide is site-specific in that it relates to the physical condition of primary improvements on a specific parcel of commercial real estate. Consequently, this guide does not address many additional issues in commercial real estate transactions such as economic obsolescence, the purchase of business entities, or physical deficiencies relating to off-site conditions.
4.2.3 Specific Objectives—PCAs are completed to address specific objectives identified to the consultant by the user. The consultant should be consulted prior to use of the PCA to address any other objective.
4.2.4 Intended Users—PCAs are typically completed for use by contracting parties. In some cases, the use of or reliance on reports may be extended to additional parties by mutual agreement of the contracting parties. Use of or reliance on PCAs by others may violate the rights of contracting parties and fail to satisfy the objectives of such unauthorized parties.
4.3 Principles—The following principles are an integral part of this guide. They are intended to be referred to in resolving ambiguity, or in exercising discretion accorded the user or consultant in conducting a PCA, or in judging whether a user or consultant has conducted appropriate inquiry or has otherwise conducted an adequate PCA.
4.3.1 Uncertainty Not Eliminated—No PCA can wholly eliminate the uncertainty regarding the presence of physical deficiencies and the performance of building systems or building components. Preparation of a PCR in accordance with this guide is intended to reduce, but not eliminate, the uncertainty regarding the potential for building system or building component failure and to reduce the potential that such building system or building component may not be initially observed.
This guide also recognizes the inherent subjective nature of reported opinions as to such issues as workmanship, quality of original installation, and estimating the RUL of any given component or system. Users should work with their consultant to consider modifications to the scope of the PCA that may reduce uncertainties.
4.3.2 Suggested Remedies—The guide recognizes that a suggested remedy may be determined under time constraints, formed without the aid of engineering calculations, testing, exploratory probing, the removal or relocation of materials, design, or other technically exhaustive means. Furthermore, there may be other alternatives or more appropriate schemes or methods to remedy a physical deficiency.
The suggested remedies are generally formed without detailed knowledge from those familiar with the historical or actual performance of the building system or building component.
4.3.3 Not Technically Exhaustive—The PCA is not intended to be construed as technically exhaustive. There is a point at which the cost of information obtained, or the time required to conduct the PCA and prepare the PCR, may outweigh the usefulness of the information and, in fact, may be a material detriment to the orderly and timely completion of a commercial real estate transaction.
It is the intent of this guide to attempt to identify a balance between limiting the costs and time demands inherent in performing a PCA and reducing the uncertainty about unknown physical deficiencies resulting from completing additional inquiry.
4.3.4 Representative Observations—The purpose of conducting representative observations is to convey to the user the expected magnitude of commonly encountered or anticipated conditions. Recommended representative observation quantities for various asset types are provided in Annex A1; however, if in the consultant’s opinion, the recommended representative observations are unwarranted as a result of homogeneity of the asset or other reasons deemed appropriate, the field observer may survey sufficient units, areas, buildings, building systems, and building components so as to comment with reasonable confidence as to the representative presence of physical deficiencies at such repetitive or similar areas, building systems, and building components.
If there is more than one building on the subject property, and they are homogeneous with respect to approximate age, use, basic design, materials, and systems, it is not a requirement of this guide for the field observer to observe the building systems and building components within each individual building to describe or comment on their condition within the PCR. The descriptions and observations provided in the PCR are to be construed as representative of all similar improvements.
4.3.4.1 User-Mandated Representative Observations—A user may mandate the representative observations required for a given subject property or a particular building system or building component. Such representative observations may be more or less detailed than this guide's recommended representative observations as provided in Annex A1.
4.3.4.2 Extrapolation of Findings—Consultant may reasonably extrapolate representative observations and findings to all typical areas or systems of the subject property for the purposes of describing such conditions within the PCR and preparing the opinions of costs for suggested remedies.
4.3.5 Level of Due Diligence is Variable—Not every subject property will warrant the same level of assessment. The appropriate level of assessment is guided by the purpose the PCA is to serve; type of subject property; age of the improvements; expertise and risk tolerance of the user; and time available for preparing and reviewing the opinions contained in the PCR.
4.4 Prior PCR Usage—This guide recognizes that PCRs prepared in accordance with this guide may include information that subsequent users and consultants may want to use to avoid duplication and to reduce cost. Therefore, this guide includes procedures to assist users and consultants in determining the appropriateness of using such information. In addition to the specific procedures contained elsewhere in this guide, the following should be considered:
4.5 Use of Prior PCR Information—Information contained in prior property condition reports may be helpful to assist in understanding the subject property and planning the walk-through survey and research for the completion of a current PCR.
Such information should serve only as an aid to a consultant in fulfilling the requirements
| SDO | ASTM: ASTM International |
| Document Number | E2018 |
| Publication Date | Jan. 1, 2024 |
| Language | en - English |
| Page Count | 21 |
| Revision Level | 24 |
| Supercedes | |
| Committee | E50.02 |
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