Construction projects are long and complex. Once the structure is built, the job isn’t complete. There’s a site assessment, commercial building inspection and perhaps most importantly, a property condition report, which is part of what’s called a property condition assessment report (PCA report).

To understand the importance of a building condition report, we’ll first define it, show who makes it and when in the commercial real estate cycle it’s done. We’ll show what should be included, illustrate how it works with a property condition example and even include a free downloadable template to get you started.

What Is a Property Condition Report?

A property condition report is a document that assesses the physical condition of a property. It outlines the current state of the building’s structure, systems (such as heating, ventilation and air conditioning or HVAC, plumbing, electrical, etc.) and other relevant features like roofing, foundation and exterior elements. It’s typically prepared for property buyers, investors or lenders to assess a property’s overall condition and potential future repair needs.

It’s important to understand the relationship between a property condition report and a property condition assessment. The latter is a thorough property evaluation, focusing on its physical aspects and is usually done for commercial real estate properties. The process involves detailed building inspections by qualified professionals, who examine the condition of the building, identify any defects or issues and estimate the cost of necessary repairs or upgrades. The PCA typically informs purchasing decisions, property management strategies and investment planning.

A project condition survey is a more specific type of assessment, often associated with a planned construction or renovation project. This survey identifies the current state of a property to inform upcoming work, including structural issues, design considerations or regulatory compliance. It’s common in situations where a building is about to undergo significant renovations or development.

These differ in scope; a PCA report looks broadly at a property’s condition from a maintenance and longevity perspective, while a project condition survey focuses more on aspects that need to be addressed during a particular project or renovation. The purpose is also different, with a PCA report informing property investment and operational decisions. A project condition survey supports the planning and execution of construction or renovation projects.

A property condition report may be created after either of these processes, depending on the context, whether for general due diligence (PCA report) or to guide a renovation or project (project condition survey). Of course, these processes and reports are at the end of the project, when the build is all but complete. To get to that phase requires construction project management software.

ProjectManager is award-winning construction project and portfolio management software with multiple planning tools that set up a project for successful completion. General contractors can schedule tasks, resources and costs on robust Gantt charts, which can link all four types of task dependencies. That reduces delays and cost overruns. The Gantt chart can also be filtered to show the critical path without complex and time-consuming calculations. Then, set a baseline to monitor planned against actual effort in real time to keep the project on track. Get started with ProjectManager today for free.

Who Makes the Property Condition Report?

Now that we understand what a property condition report is and the various processes that can lead to it, let’s explore the professionals responsible for creating it. Here’s a list with a short explanation of who they are.

• Professional Inspectors: These licensed home or building inspectors specialize in property evaluations. They are trained to evaluate the conditions of buildings, including structural elements, systems and the overall state of the property.
• Engineering or Architecture Firms: These are used for larger or more complex properties requiring structural assessments. Architects, in some cases, may produce property condition reports, especially when the property involves complex designs or construction elements, or if the report is needed for a planned renovation. Structural and mechanical engineers may create a property condition report if it focuses on specific systems, like HVAC or electrical systems.
• Commercial Real Estate Consultants: For due diligence in real estate transactions, these professionals often have expertise in evaluating commercial properties from an investment, leasing and operational perspective. They may prepare a property condition report to provide recommendations about a property’s condition, potential investment value and necessary repairs. They typically rely on third-party specialists (e.g., engineers, inspectors) for detailed inspections but can provide an overall strategic view.
• Facility Managers: When used for internal property management, facility managers are responsible for upkeeping buildings and managing maintenance operations. They often have in-depth knowledge of the building’s systems and condition due to their regular involvement in its maintenance. A facility manager might create a property condition report, particularly for properties they oversee, as they have detailed knowledge of the building’s ongoing issues, repair history and anticipated maintenance.
• Maintenance Teams: Maintenance teams, though more involved in the repair work, may help create a property condition report by documenting their observations of the building’s systems and structure. However, they generally aren’t the primary creators of the report, as it requires a broader, detailed evaluation that often involves external inspectors or experts in areas like structural integrity and safety.

When to Make a Property Condition Report

We’ve already explained how a couple of processes trigger the creation of a property condition report, but more situations call for them. Below is a short list of when a report is generated and why.

• Before buying or selling a property: A property condition report should be created before a property is bought or sold to help both parties understand the current property’s condition. For buyers, it provides insights into potential repair costs and helps negotiate the sale price. For sellers, it offers transparency and helps identify any issues affecting the property’s value.
• For real estate due diligence: When assessing a property for investment, financing or leasing, a property condition report is essential to evaluate the property’s condition and avoid unforeseen costs. This due diligence process ensures that investors and lenders are fully aware of any structural or system-related problems that could impact the investment.
• During routine property maintenance: For ongoing property management, having a property condition report as part of routine maintenance can help track the property’s condition over time. Regular reports allow property owners and managers to stay ahead of necessary repairs, ensuring the building remains safe and well-maintained and avoiding costly emergency fixes later.
• Before major renovations or upgrades: A property condition report is useful before starting renovations or upgrades to assess the current state of the property and ensure all areas are addressed in the planning process. It helps identify potential challenges, such as structural issues or outdated systems, that may affect the renovation timeline and budget.
• For insurance or risk assessment: Insurance companies may require a property condition report to assess the property’s condition before providing coverage or determining premiums. It also helps with risk assessment by identifying vulnerabilities that could lead to accidents, damage, or loss, helping owners manage and mitigate risks appropriately.

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Property Condition Report Template

Use this free Property Condition Report Template for Word to manage your projects better.

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What Should Be Included in a Property Condition Report?

A property condition report typically includes several key elements that provide a comprehensive overview of the property’s condition. Here’s a breakdown of what to include.

General Property Information

This section provides essential details about the property, such as its full address, type (e.g., residential, commercial) and size (square footage). It also includes the construction date, giving context for the building’s age, which can influence its condition. The inspection date is recorded to ensure the report reflects the most current assessment. If applicable, it also includes information about the property owner or manager.

• Property address and location
• Property type (residential, commercial, industrial)
• Inspection date and inspector’s details
• Owner or client information

Exterior Assessment

The exterior assessment examines the outside elements of the property. It looks at the condition of the roof, foundation, walls, siding and windows to check for any wear or damage. Roofing issues, foundation cracks or problems with exterior materials can indicate larger structural problems. The condition of driveways, walkways and landscaping is also assessed, especially regarding drainage or any potential risks to the property from the exterior environment.

• Roof condition (material, damage, leaks)
• Walls, siding and foundation integrity
• Windows and doors (functionality, sealing, damage)
• Driveway, walkways and drainage system
• Landscaping and exterior structures (fences, sheds, decks)

Interior Assessment

This section of the property condition report focuses on the inside of the building, covering floors, walls, ceilings, doors, and windows. It includes inspecting flooring materials (such as carpet, tile or wood) and walls for any visible damage like cracks, stains or signs of water damage. It also examines the functionality of interior doors and windows, as well as the condition of lighting, electrical fixtures and plumbing systems (e.g., sinks, toilets, and pipes) to ensure everything is in working order.

• Walls, ceilings and flooring conditions
• Windows, doors and locks functionality
• Stairs, railings and hallways
• Presence of mold, pests or water damage

Structural and Mechanical Systems

Here, the property condition report evaluates the building’s core systems—HVAC, electrical, and plumbing. It looks at the age and condition of heating, ventilation, and air conditioning systems, checking for functionality and efficiency. The electrical system is checked to ensure safety, with an inspection of the electrical panel, circuit breakers, and wiring. Plumbing is also reviewed for any leaks, water pressure issues or potential pipe problems. Lastly, the structural integrity of the building is examined, including foundation issues, cracks in load-bearing walls and other signs of significant structural wear.

• Foundation, basement or crawl space condition
• Electrical system (wiring, outlets, breaker panel)
• Plumbing system (leaks, water pressure, drainage)
• HVAC system (heating, cooling, ventilation)

Appliances and Fixtures

If the property includes appliances like refrigerators, dishwashers, or ovens, this section assesses their condition and functionality. Similarly, the condition of fixtures like lighting, bathroom fittings and kitchen cabinetry is reviewed. This ensures that the equipment included in the sale or lease is in proper working order and helps buyers or tenants understand what they can expect in terms of appliances and fixtures.

• Kitchen appliances (stove, refrigerator, dishwasher)
• Bathroom fixtures (toilets, sinks, showers)
• Water heater and laundry equipment

Safety and Compliance

Safety and regulatory compliance are crucial aspects of any property condition report. This section checks that fire safety systems, such as smoke detectors and emergency exits, are in place and working. It also examines whether the property adheres to local building codes, especially for any renovations or structural changes made over time. For commercial properties, accessibility standards (like ADA compliance) are considered. Additionally, the report checks for hazardous materials (e.g., asbestos or lead paint) that could pose health risks.

• Smoke and carbon monoxide detectors
• Fire extinguishers and sprinkler systems
• Security systems (alarms, locks, cameras)
• Compliance with local building codes

Observed Issues and Recommendations

This section of the property condition report details any problems or issues found during the inspection. It describes each identified issue, from minor wear and tear to major structural or system failures. Alongside these observations, the report includes recommendations for repairs, replacements or improvements. The severity of each issue is often assessed, and recommendations for prioritizing repairs are provided to help the property owner or buyer manage the necessary work.

• Deficiencies and potential hazards
• Immediate repairs needed vs. long-term maintenance
• Estimated costs for repairs (if applicable)

Photos and Supporting Documentation

To support the written findings, photos are included to visually document significant issues, such as cracks in the foundation or water damage in the ceilings. These images help clarify the property’s condition and provide evidence for the reported problems. Supporting documents, such as previous maintenance schedule records, inspection reports or building permits, may also be included to provide additional context and a history of the property’s condition.

• Images of key areas, damage or concerns
• Reference to prior inspection reports (if available)

Property Condition Report Template

That’s a lot of information to cover for the property condition report. To make it easier and less likely that any major information is left out, download our free property condition report template for Word.

The free template takes all the sections of the report into account and explains what needs to be in that section. This customizable template allows users to delete our directions and add the information, which can be shared with the property owner.

Property Condition Report Example

To better understand how a property condition report works in the real world, we’ve added a report that’s used to inspect the condition of a building that a hotel chain is purchasing to convert into another one of their locations. For the sake of simplicity, we’ve condensed the elements outlined above into a simpler format.

The property condition report captures all the specific information that pertains to this site. It’s formatted like the free template that interested readers can download, which makes it clear to follow to understand how the report is written.

How ProjectManager Helps With Construction Project Management

Examples and templates are great, but when working in construction, general contractors, subcontractors and their crews need more efficient and effective tools. Construction project management software is designed to complete the project correctly. That way, when a property condition report is made, everything will meet the property owner’s expectations. ProjectManager is award-winning project and portfolio management software with multiple project views that allow general contractors to schedule on Gantt charts. Those plans are then shared across the software, which allows teams to execute their work on kanban boards and task lists, while stakeholders get a monthly overview with the calendar view.

Robust Resource Management and Cost Tracking Features

One way to ensure that construction projects are delivered on schedule and avoid cost overruns is by managing resources. When onboarding teams, general contractors can set their availability, including PTO, vacation and global holidays, as well as skill sets, which helps make assigning easier. Then use the color-coded workload chart to see resource allocation across all projects. From there, managers can see who is overallocated or underutilized and balance their workload to keep everyone working at capacity and avoiding burnout. There’s a team page that summarizes team activity on a daily or weekly basis, which can be filtered by priority, progress and more. Plus, secure online timesheets streamline payroll and provide a window into labor costs to track and keep to the budget.

Real-Time Construction Project Management Dashboards

Monitoring progress and performance is also essential to deliver a successful construction project. Once the baseline is set on the Gantt chart, our software collects live data from teams, who can update their status anywhere and at any time with our mobile app for Android and iOS. For a high-level overview, toggle over to the real-time project dashboard or portfolio dashboard if managing multiple projects. Key performance indicators (KPIs) are captured and displayed on easy-to-read graphs and charts that show metrics such as time, cost, workload and more. For more details, use our customizable reports on status, portfolio, variance, workload, timesheets and more. All reports can be filtered to get into the details or provide a summary that can be shared with stakeholders to keep them informed.

Related Content

For those interested in reading more about inspecting and reporting on construction sites, below are a few related pieces that we’ve recently published.

• Inspection Report Template
• Construction Site Management: A Guide to Site Inspection and Site Planning
• What Does a Building Inspection Cover?

ProjectManager is online project and portfolio management software that connects teams whether they’re in the office or on the job site. They can share files, comment at the task level and stay updated with email and in-app notifications. Get started with ProjectManager today for free.