In the realm of property inspections, are commercial assessments the same as home inspections?
The simple answer is absolutely not! Commercial property inspections are unequivocally different in nature. The technical construction knowledge, training and expertise required to conduct a commercial property condition assessment far outweigh the simpler, less complex residential inspection requirements.
For instance, a commercial property inspector must be well versed in different types of:
- Building structures
- Roofs
- Heating, air conditioning and ventilation systems
- Electrical systems and components
- Plumbing systems and components
- Environmental causes for concern
- Insurability criteria
- Building codes
- Fire codes
Examples of Commercial Buildings
| – Apartment buildings
– Office spaces – Manufacturing plants – Medical offices – Hotels / Motels – Restaurants – Retail stores |
– Shopping centres
– High rises / complexes – Strip plazas – Warehouses – Farm buildings – Places of worship – Institutional buildings |
The knowledge and expertise of a commercial building inspector is to primarily guide and protect the purchaser from any unforeseen surprises or costly repairs. Furthermore, the inspector has a wealth of contacts who can provide specialty inspection services (i.e. environmental, fire safety, elevators, etc.) should the need arise.
Commercial inspections come with much more risk and distinct challenges. The buildings are significantly larger, have several different components and more sophisticated systems. For example, an overlooked defective HVAC system in a home inspection may cost the buyer around $7K-$10K to replace. With commercial properties, $10K pales in comparison to the tens or hundreds of thousands of dollars required to replace a whole system. There is no room for error.
Depending on the type of property, potential environmental issues may also warrant assessment by a commercial building inspector. A well versed commercial building inspector has the experience and knowledge to alert and guide the buyer to potential concerns, to provide cost estimates, and to put you in contact with the right professionals to rectify the issues. Examples include the maintenance and/or removal of buried oil tanks, remediating contaminated soil, removal of asbestos tiles and asbestos-wrapped boilers, etc.
Commercial building inspections must also conform to the ASTM Standard E2018-15 protocol for Property Condition Assessments. As commercial buildings are larger and more valuable, and the work is more complicated, these buildings will command larger inspection fees. Depending on the size of the building, the inspection can take a full day or more and an additional few days to compile the final report with cost estimates and photos.
What’s the key difference between a home inspection and a commercial building inspection?
Residential home inspection clients are often emotionally attached to the property. They fell in love with the kitchen, the garage or the back yard. They envision living there, creating new memories and take into consideration the happiness of their family members. The real estate transaction is based on appraisals and market comparables.
Commercial inspection clients tend not to be emotionally or personally involved because they are entering a business transaction. The buyers largely evaluate the property’s history and revenue generating potential. They are primarily concerned with the return on their investment, how long the roof will last and what it could cost to replace it.
The focus of a commercial inspection is directed primarily on the major systems rather than the interior cosmetic aspects. The inspector is mostly looking for issues that may either be an immediate problem or likely to become one at some point in the future. The buyer is far less concerned about the worn carpet inside the building but will definitely be concerned about the rooftop heating system that could cost more than $10K to replace.
Words of Caution
A common misconception within the real estate world is that a home inspector and a commercial building inspector are one and the same. They are in fact two distinct breeds and the differences are quite significant.
Home inspectors conduct a visual inspection of all visible and accessible areas of the home and they take a detailed look at the electrical and plumbing systems. The inspection is usually conducted over a short period of two to three hours and an inspection report is given to the client upon completion or the following day.
Commercial building inspectors have much more in-depth training, breadth of knowledge and construction expertise. As the buildings’ components are much more sophisticated and can vary quite substantially from a home system, it’s important to hire the right person for the job. A commercial inspection can take anywhere from 6 hours to a full day or more to complete and the report is then compiled and sent to the client a few days thereafter.
You don’t ask a plumber to rewire a home… so why would you ask a home inspector to inspect a commercial building?
A well-seasoned commercial building inspector will be an expense and life saver! To protect your investment, you are well advised to hire the best.
