What exactly is a pre-purchase property inspection? It is one of those various kinds of inspection reports that you can receive after you purchase a certain property. Often referred to as ‘an inspection report of a seller’s property, a pre-purchase property inspection is usually the one you receive before you actually buy a real estate property. In some cases called a ‘dry run report’, a pre-purchase property inspection typically is a written examination of a specific property’s current state. This report can be used to make certain corrections and/or updates prior to you making an offer on a real estate property.
In general terms, a building inspection is a comprehensive visual examination of a building by a qualified and experienced professional inspector. In a non-airship building, an inspector will typically examine the roof, structural integrity, electrical system, heating and cooling system, insulation, and water system. In a covered structure, the inspector typically will review the construction details of walls, windows, doors, ceilings, floors, and fixtures, but will not inspect the mechanical systems or plumbing of the structure. A covered structure also differs from an air-conditioned building in that the inspection will typically not include a comprehensive review of insulation or vapor control, although these details will normally be addressed in a building inspection manual. Typical areas of focus in a pre-purchase inspection would be the location of major appliances, structural framing, and the presence of minor defects that would not be a problem if maintained, such as loose nails, missing or cracked tiles, exposed ceiling panels, missing floorboards, missing roof shingles, missing skylights, or missing doors and windows.
The supply authority issues building inspection reports at the time the contract for the project is finalized. The supply authority can also issue a Request For Review (RFR) after the completion of an inspection to request corrections that were not detected during the audit. Once corrections are made, the RFR will be forwarded to the client. The client can then seek approval to pursue litigation against the deficient source.
An RFR is not a building inspection report. Rather, it is an inspection document that is generated by the consultant after the completion of the audit and after consultation with the client. When an RFR is issued, the consultant corrects the minor defects that were found during the audit. Usually, the RFR targets properties that are less than 20 years old.
The Pre-Purchase Property Ownership (PPO) program was established in order to help owners who wish to retire from their commercial real estate investment while still protecting their equity. The PPO is designed to provide owners with the flexibility to sell their property without having to conduct a building inspection, as well as to stay in the property as long as they want. It should be noted, however, that even if a PPO does not uncover any major problems, the company may offer to pay for future repairs and replacements and may even charge a fee for its review.
If the Pre-Purchase property Ownership agreement is terminated by the seller, the buyer is required to pay the seller’s inspection costs, including the replacement/ repair costs and professional fees associated with the inspection. In addition to the cost of the PPO inspection, there is usually a cooling-off period of one to three months from the date of purchase. During the cooling-off period, no inspection work will be completed and the property owner will have no responsibility to pay for any inspection services performed.