Regardless of whether you are a property manager, an acquisition officer, or a loan manager, you will require intensive knowledge and understanding of the property’s condition in your space. A diligent organization with all property services will provide you various reports of property, which may confuse you such as Facility Condition Assessment (FCA) and Property Condition Assessment (PCA). These are various methods of building assessments and one should have a solid knowledge of the purpose and scope of each assessment. It can help you to decide which one you want and when you need it.
Property Condition Assessment (PCA)
The Property Condition Assessment is an evaluation or assessment method of commercial land or real estate building where a thorough investigation and inspection of the property is conducted along with all upgrades & systems of every building or property. The Property Condition Assessment Report is sometimes also called Commercial Building Inspection Report or Property Condition Report.
PCA is usually conducted at the time of transfer of property ownership. The person, who is going to buy or invest in the property, might want to evaluate the condition of the property before purchasing. Even the loan provider may want to know the condition of the property before approving a property loan. It is also required in case of leasing or financing the property.
Property Condition Assessment (PCA) inspects the following aspects:
- Regulatory compliance
- Mechanical systems
- Components of Interior Building
- Building envelope
- Structural systems
- Property Grounds and Property Site
All the inspectors of a commercial building are supposed to follow the accepted industry guidelines of ASTM E2018 or International Standards of Practice for Inspecting Commercial Properties (ComSOP). The PCA report can be prepared and inspected by an engineer/inspector or specialist engineer such as an electrical engineer or mechanical engineer on the basis of preferences and needs of customers.
Replacement Reserve Table & Immediate Repairs Table are the two main reports of the Property Condition Assessment (PCA). The issues of life safety and damaged systems of building with its costs are identified in the Immediate Repairs Table.
Long-term capital costs of components & systems of the building or property are identified in the Replacement Reserve Table on the basis of the expected useful life of the building. Typically, the useful life of components and systems is considered to be 12 years.
Facility Condition Assessments (FCAs)
Facility Condition Assessments (FCAs) is another report, which is similar to Property Condition Assessment (PCA) but serves a different need and purpose. Resources are prioritized, capital budgets are developed, assets worth valuations are done, the physical condition of property and building are understood and maintained by the property owners with the help of Facility Condition Assessments (FCAs). Extra finance can also be secured by using Facility Condition Assessments (FCAs).
Similar to PCA, in FCA, an intensive property report is prepared after a thorough inspection of the property by a specialist team of one or more people.
The objective of the FCA report is to identify the following:
- The Total Cost of Building Replacement
- List of Priority Repairs
- Contiguous Systems Compatibility
- Compliance of original design with overall system
- Need of Capital for Replacement
- Remaining Useful Life (RUL) of all components & systems of the building
- Deficiencies of System
- Deferred and Routine Maintenance
All the systems of every property are also incorporated in the Facility Condition Assessments (FCAs). The accounting of building components & material of every system is more thoroughly conducted in the Facility Condition Assessments (FCAs) Report when compared to Property Condition Assessments (PCAs) Report. This thorough accounting is usually presented in inventory table form.
There are more detailed estimates of the cost of replacement & repair of equipment and systems in an FCA report than in a PCA report. This is because the property or the building has to be maintained for a long time (typically 12 years) and an FCA report is specifically designed to serve as a functional tool for the property maintenance. The information present in the FCA report provides a reasonable projection of costs for continuous maintenance of the building over a period of time.
One of the important segments of the FCA is the technique of delivery of information. The delivery of information is mostly preferred via digital platform so that it can smoothly interface with the customer-side Integrated Workplace Management Systems (IWMS). Since FCA is a functioning record, its data in digital form also helps portfolio and asset managers to easily project the expenses of maintenance and expenditure of capital of the property or building.
Summary:
If both reports of FCA and PCA are compared, then we can find that both reports are similar to each other but are created to fulfill different objectives and purposes.
In PCA reports, we can find that it is normally required before the property is purchased, leased, or rented. PCA will characterize a property at a specific point in time, gives the overall repair and replacement expenses, and provides an estimation of expenses for the property maintenance over a long period of time.
FCA is required when an asset or property manager wants to plan for the long-term capital requirement. In FCA, the details of property or assets are characterized in detail, additional detailed reports of existing property components and systems are given, and specific information of maintenance and repair of the building is provided. This helps in increasing the accuracy of the projection of the maintenance cost and capital expenditure over a long period of time.
Typically, a Property Condition Assessment report is a document, which is created only once, whereas a Facility Condition Assessment is a live document, which is updated numerous times with new information over a period of time.
PCA reports help the buyer and the seller of the property to gain awareness of the present condition of the properties, whereas FCA reports help in increasing the productivity and reducing the maintenance cost of the property with better costing prediction and accuracy.