Property Condition Assessments for Sellers
Property owners looking to sell a property are increasingly using property condition assessments as a means of expediting the
real estate transaction. The completed property condition report can then be folded as part of the sellers state mandated property disclosure form. Combined together these reports reduce the buyer’s due diligence by providing an overall
description of the asset and known physical deficiencies.
A seller is now capable of offering an asset at an
established asking price knowing the asset’s deficiencies. This in theory
eliminates the buyer’s opportunity to request a price reduction based on the
already disclosed physical deficiencies that may be later discovered by the
buyer’s PCA consultant.
Net Lease/Triple Net Lease Property Condition Assessments
For net or triple net leasing, it is important to document existing conditions at the very onset of the term to establish the
baseline condition of the property. It is not unusual for landlord/tenant disputes to arise at the end of the lease over discrepancies as to the
building’s care and maintenance during the term of the lease. Often, this results in litigation over the return of security funds. Often, claims are made
that the tenant has not properly exercised sufficient or adequate preventive maintenance resulting in excess physical deterioration or system/component
failure. In response, tenants belatedly claim pre-existing conditions with no substantiated documentation.
Commercial Building Inspectors thoroughly and independently examine and document the
property’s existing conditions at the onset of the lease. The reports are well documented with pictures and descriptions and may even include video. These reports may never be required. However, if needed, they can quickly be accessed
to resolve outstanding issues during disputes. It is recommended by NACBI that leasers maintain several copies of this report and safeguard the original. A good rule of practice is to place the original in a safe or safety deposit box
and provide certified copies with your legal firm, bank or other representative. Most Commercial Building Inspectors keep a copy of the report and supporting documents on file for seven years or more if needed.
Property owners looking to sell a property are increasingly using property condition assessments as a means of expediting the
real estate transaction. The completed property condition report can then be folded as part of the sellers state mandated property disclosure form. Combined together these reports reduce the buyer’s due diligence by providing an overall
description of the asset and known physical deficiencies.
A seller is now capable of offering an asset at an
established asking price knowing the asset’s deficiencies. This in theory
eliminates the buyer’s opportunity to request a price reduction based on the
already disclosed physical deficiencies that may be later discovered by the
buyer’s PCA consultant.
Net Lease/Triple Net Lease Property Condition Assessments
For net or triple net leasing, it is important to document existing conditions at the very onset of the term to establish the
baseline condition of the property. It is not unusual for landlord/tenant disputes to arise at the end of the lease over discrepancies as to the
building’s care and maintenance during the term of the lease. Often, this results in litigation over the return of security funds. Often, claims are made
that the tenant has not properly exercised sufficient or adequate preventive maintenance resulting in excess physical deterioration or system/component
failure. In response, tenants belatedly claim pre-existing conditions with no substantiated documentation.
Commercial Building Inspectors thoroughly and independently examine and document the
property’s existing conditions at the onset of the lease. The reports are well documented with pictures and descriptions and may even include video. These reports may never be required. However, if needed, they can quickly be accessed
to resolve outstanding issues during disputes. It is recommended by NACBI that leasers maintain several copies of this report and safeguard the original. A good rule of practice is to place the original in a safe or safety deposit box
and provide certified copies with your legal firm, bank or other representative. Most Commercial Building Inspectors keep a copy of the report and supporting documents on file for seven years or more if needed.