Property Condition Assessments
Property Condition Assessments (PCAs) and Capital Needs Assessments (CNAs) are specialized reports that combine onsite observations of the existing property conditions with expected capital expenditures over a defined term.
PCAs are commonly used in real estate transactions as part of the buyer's due diligence process. Furthermore, these are also used by owners to determine the current state of their property and plan for future capital costs as well as by lenders during the refinance of a given commercial property. These assessments are governed by ASTM E-2018-15.
CNAs are typical for government programs such as USDA Rural Development and HUD/FHA multifamily loans. These are very similar to PCAs, but often include additional reporting requirements depending on the program involved.
Some of the key elements of the assessment reports include:
- Immediate Repairs with Estimated Costs - those items needing attention for reason of life safety, code violation, or where further neglect will result in further damage.
- Capital Reserve Expenditures - costs based on the observed age the of building components, finishes, systems, and site when compared to the estimated useful life of these items. These repair and replacement costs are then listed over a specified term, usually 10 plus years.
- Recommendations for Additional Action or Investigation - these are areas that the inspector has deemed will require a specialist, destructive testing, or other work outside of the scope of ASTM E2018-15 or program requirements.