The ASTM E2018-08 Standard & Property Condition Assessments
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When buying or lending a property, like any large investment, it’s important to make sure that the proper precautions are taken during the buying process to ensure that the investment is worthwhile and less risky. Property Condition Assessments (PCAs) help lenders and buyers get an accurate and professional opinion of the current physical state of a property, and how that plays into the short term and long term financial value of the property.

The ASTM, or the American Society for Testing and Materials creates different standards for environmental professionals. The ASTM wrote a standard called the “Standard Guide for Property Condition Assessments: Baseline Property Condition Assessment Process” and gave it the designation E2018. It was created in 1999 and was most recently revised by the ASTM Committee E50 in 2015, giving it the current name ASTM E2108-15. The E2018 has various sections, which outline different aspects of a property condition assessment. Included in the E2018-15 are the following sections:

  • Scope

  • Terminology

  • Significance and Use

  • User’s Responsibility

  • Property Condition Assessment

  • The Consultant

  • Document Review and Interviews

  • Walk-Through Survey

  • Opinions of Probable Costs to Remedy Physical Deficiencies

  • Property Condition Report

  • Out of Scope Considerations

  • Annex A1: Specific Property Types

  • Appendix X1: Enhanced Due Diligence

  • Appendix X2: Americans with Disabilities Act

Of all of these components, a standard PCA contains four key items of strong importance:

1. Document Reviews and Interviews

Meetings are scheduled with key individuals and stakeholders of the property to help the environmental consultant's understand the overall property and make the walk through survey process faster and more effective. Reviewing important historical documents on the property can help quickly answer key questions and items later addressed in the PCA. Information like previous upgrades or repairs on the property, recorded material building code violations, recorded material fire code violation information, and historical physical deficiencies are valuable information for consultants that they can use during the Walk-Through Survey.

2. Walk-Through Survey

Also known as a property site inspection, a Walk-Through Survey aims to obtain information about material systems and components of a property by a field observer. A trained professional will look for physical deficiencies that are easily visible, and make notes to provide a description of the property used for assessing long term maintenance costs, and to gather information used for the PCA. The field observer will look at electrical, mechanical, plumbing and ventilation systems of the property, as well as building shell, interior finishes and other components of the property. Only one walk-through survey is meant to be conducted for a site.

3. Opinions of Probable Costs to Remedy Physical Defects

Following a walkthrough of the property, approximate costs are to be prepared for the physical deficiencies of the property. They help stakeholders understand the future costs involved to remediate the physical deficiencies, what methods of remediation are recommended, and the current overall physical condition of the property. The opinions of probable costs are only limited to physical deficiencies with a property, and do not include repairs, improvements and other costs that would not be considered physical deficiencies of the property.

4. Property Condition Report

After all necessary information is collected, a PCA is generated that outlines the physical condition of all systems in the property, conveying the physical condition and short and long term costs associated with the property. Additionally, the report details physical deficiencies that require immediate action and includes cost tables for fixing existing physical deficiencies.

Terminology Section

As expected, there are many terms that are referenced throughout the ASTM E2018-15 that many property owners and other stakeholders would be unfamiliar with. Luckily, the E2018-15 provides a terminology section that can be easily referenced that defines many terms used frequently throughout, such as Physical Deficiency, Field Observer, and Technically Exhaustive.