InterNACHI releases new Standards of Practice for Inspecting Commercial Property.

**2.1.2 ***Inspection- *Do you want to include anything about the ways inspectors handle inspections of larger commercial structures with systems which require subs, and in which the inspector acts as something like an Inspection contractor, legally-responsible party and point-of-contact with the client?

2.1.2.1 Observations – The wording is not quite right… items which are observed are not “observations” They are items being observed. An observation is a “visual assessment”.

2.1.2.2 Report - The inspection report is defined as the document providing information about the structure(s), supplied according to the terms of the Inspection Agreement between Inspector and Client.
The Inspection Report may include peripheral but relevant information including but not limited to photographs, inspection reports on building systems or components supplied by specialist inspectors, maintenance records, legal documents or technical information.

4.1 Objective- The objective of the inspection is to provide an inspection report which complies with the terms set out in the Inspection Agreement between the Inspector and Client, to be delivered in a manner and within a time frame agreed upon in this Agreement.

2.1.2.1 Observations – The wording is not quite right… items which are observed are not “observations” They are items being observed. An observation is a “visual assessment”.

2.1.2.2 Report - The inspection report is defined as the document providing information about the structure(s), supplied according to the terms of the Inspection Agreement between Inspector and Client.
The Inspection Report may include peripheral but relevant information including but not limited to photographs, inspection reports on building systems or components supplied by specialist inspectors, maintenance records, legal documents or technical information.

4.1 Objective- The objective of the inspection is to provide an inspection report which complies with the terms set out in the Inspection Agreement between the Inspector and Client, to be delivered in a manner and within a time frame agreed upon in this Agreement

.3.2 Representative observations- In recognizing that the client likely has the goal of acquiring information about the subject property at a cost, in time and money, that does not exceed the value of that information, representative observations are not just permitted by this standard, but recommended as well.
What are “representative observations”?

4.4 Uncertainty
The client should understand that no inspection report is completely accurate and will contain a certain level of uncertainty. Inspector and Client should attempt to define the acceptable level of uncertainty when defining the terms of the contract. A report is only the written communication of the observations made and research conducted by the inspector. The report contains those items which in the inspector’s opinion are likely to be of interest to his/her client. This should be defined in the contract.

4.5 Subjectivity
The client should understand that the inspection report is, to a large degree, the subjective opinions of the inspector based on his/her observations and research within the limits of access, time, and budget and without the aid of special equipment or meters and without dismantling, probing, testing, or troubleshooting and without detailed knowledge of the commercial property, its components or its systems. The inspection report is not much more than a subjective professional opinion. Will using moisture meters or other instruments negate this and open inspectors to liability? Why not include language which leaves the use of instruments to the inspector’s discretion and make it clear that it’s not a technically exhaustive inspection.

5.3 Documents to be reviewed and included in the inspection report
The inspector should review all documents provided by the client and owner. only relevant documents.

How would you rewrite 2.1.2.1? I think an observation is a thing, and it isn’t the act of seeing something. When someone asks “What was your observation?” they are asking for a description of what you observed. No?

Kenton, Your rewrite of 4.1 would negate the need for an SOP, no? Isn’t that exactly what a commercial inspection is in lieu of an SOP?

Kenton, We can’t add your last line’s rewrite to 4.4 because it would require the inspector to magically go back in time and enter into the contract all those things he later discovered during the inspection that he thinks might be of enough interest to his client to include in the report.

Kenton, 4.5 need not permit an inspector to use a moisture meter. He is permitted already in this standard. He just isn’t required to use meters.

The main idea:

“… the client likely has the goal of acquiring information about the subject property at a cost, in time and money, that does not exceed the value of that information…”

Keeping that in mind, if you can look above ceiling tiles at a cost to the client in time and money that is less than the value of the information discovered by looking above them… look above them.

Nick’s point is verbiage taken from E2018, which (translated) states that the client sometimes just aint gonna pay, in time or money, to dig too deep.

The purpose of the SOP is to impress a process on the inspector.

Well, actually, it isn’t from 2018. The quote I made in post 27 which I called the main idea:

“… the client likely has the goal of acquiring information about the subject property at a cost, in time and money, that does not exceed the value of that information…”

is mine. My words. Although all SOPs include the same thinking to an extent.

I put them in 4.3.2 of InterNACHI’s SOP to explain representative observations and why, like a home inspector, a commercial inspector may check some windows and some receptacles, but not every single one of them.

That quote, which I call thte main idea here, really is the main idea here.

Ken,

3.2 What are “representative observations”?

Representative observations, I believe, refer to a sampling of same items. For instance, if there are 1000 windows in a building, no one reasonable expects the inspector or consultant to actually inspect and operate all 1000 windows. To do so would require the correct application of $$ to the process on tha part of the client. Representative observations is astandard concept found in E2018-01.

4.4 Uncertainty
Inspector and Client should attempt to define the acceptable level of uncertainty when defining the terms of the contract.

In E2018-01, there is a section dealing with uncerainty. realistically, and translated from their verbiage, the clause means that the inspector cannot guarantee that all defects and deficciencies will be discovered. A commercial inspection may also deal with deffieiencies related to deferred maintence, fatigue, wear, and neglect. remember, a commercial inspection may not only be likited to the building, but may also involve equipment used in business.

A report is only the written communication of the observations made and research conducted by the inspector. The report contains those items which in the inspector’s opinion are likely to be of interest to his/her client. This should be defined in the contract.

No, this should be defined in a Scope of Work, as mutually discussed and agreed to by the client and the Consultant /Inspector… It isnt enough, IMO, to report on items of interest (as determined by the Inspector). Some items are REQUIRED to be included in the report, as defined in our standard and in the E2018 model. Nothing new here. Ither items are those as mutually defined by the parties.

4.5 Subjectivity
Will using moisture meters or other instruments negate this and open inspectors to liability? Why not include language which leaves the use of instruments to the inspector’s discretion and make it clear that it’s not a technically exhaustive inspection.

NACHI went a step further in setting the Client’s expectations here, by specifying that we arent required to use specialized tools. ANY tools for that matter. It is a good inclusion, and is pretty clear. Although E2018 doesnt specifically exclude specialized tools, it doesnt INCLUDE them, either. Bottom line is that in both standards (NACHI and ASTM), the engagement is outlined by the Inspector and the Client, and ancillary activities, SME’s, etc may require more $$. So, to answer your question, NO it wont negate the clause. If you want to exceed the standard, and assume the riisk, its on you.

5.3 Documents to be reviewed and included in the inspection report
The inspector should review all documents provided by the client and owner. only relevant documents.

The client, as a part of the engagement, and defined within the SOW, may want the Inspector to gather doce. I do it for around $75 an hour. There are specific timeframes for delivery of docs requested (10 business days), where if you request them and they arent delivered, you may still get paid if its part of the scopw of the inspection. In all cases, the only doicuments we should review are the ones we agree are part of the engagement, and are being compensated for.

Ken,

3.2 What are “representative observations”?

Representative observations, refer to a sampling of same items. For instance, if there are 1000 windows in a building, no one reasonable expects the inspector or consultant to actually inspect and operate all 1000 windows. To do so would require the correct application of $$ to the process on tha part of the client. Representative observations is astandard concept found in E2018-01.

4.4 Uncertainty
Inspector and Client should attempt to define the acceptable level of uncertainty when defining the terms of the contract.

In E2018-01, there is a section dealing with uncerainty. realistically, and translated from their verbiage, the clause means that the inspector cannot guarantee that all defects and deficciencies will be discovered. Nothing new here. BUT, a commercial inspection may also deal with deffieiencies related to deferred maintence, fatigue, wear, and neglect. remember, a commercial inspection may not only be likited to the building, but may also involve equipment used in business.

A report is only the written communication of the observations made and research conducted by the inspector. The report contains those items which in the inspector’s opinion are likely to be of interest to his/her client. This should be defined in the contract.

No, this should be defined in a Scope of Work, as mutually discussed and agreed to by the client and the Consultant /Inspector… It isnt enough, IMO, to report on items of interest (as determined by the Inspector). Some items are REQUIRED to be included in the report, as defined in our standard and in the E2018 model. Nothing new here. Ither items are those as mutually defined by the parties.

4.5 Subjectivity
Will using moisture meters or other instruments negate this and open inspectors to liability? Why not include language which leaves the use of instruments to the inspector’s discretion and make it clear that it’s not a technically exhaustive inspection.

NACHI went a step further in setting the Client’s expectations here, by specifying that we arent required to use specialized tools. ANY tools for that matter. It is a good inclusion, and is pretty clear. Although E2018 doesnt specifically exclude specialized tools, it doesnt INCLUDE them, either. Bottom line is that in both standards (NACHI and ASTM), the engagement is outlined by the Inspector and the Client, and ancillary activities, SME’s, etc may require more $$. So, to answer your question, NO it wont negate the clause, but anytime you exceed a Standard of Practice you could open yourself up for liability. So, be careful!. If you want to exceed the standard, and assume the riisk, its on you.

5.3 Documents to be reviewed and included in the inspection report
The inspector should review all documents provided by the client and owner. only relevant documents.

The client, as a part of the engagement, and defined within the SOW, may want the Inspector to gather doce. I do it for around $75 an hour. There are specific timeframes for delivery of docs requested (10 business days), where if you request them and they arent delivered, you may still get paid if its part of the scopw of the inspection. In all cases, the only doicuments we should review are the ones we agree are part of the engagement, and are being compensated for.

There are some major differences between ASTM and InterNACHI’s SOP.

First: ASTM puts the burden of procuring appropriate documents on the inspector, making him run around to AHJ’s and building departments to gather up public documents to reveiew

InterNACHI shifts that burden onto the client (unless the client wants to pay the inspector to perform that task in the scope of work). The client, who likely has a contractual agreement with the property owner, is in a far better position to procure all the documents the inspector may want to review (maintenance records, repair invoices, warranties, etc). Furthermore, we don’t want the inspector to be liable for failing to procure some fire record or something. And furthermore, we don’t want everything, the building, the documents, the people to interview, all there on-site, on the day of the inspection. Furthermore we want to increase seller disclosure duty via the client. Remember, the seller only has a duty of disclosure to the inspector in so much as he has a duty of disclosure to the buyer (and hence buyer’s inspector).

Second: ASTM spends much time talking about opinions of probable costs to remedy.

InterNACHI took all that crap out of there, hence InterNACHI’s SOP 7.5. We did this for several reasons:

  1. Historically inspectors do NOT do repair estimates. Commercial inspectors should not deviate from this historical tradition.

  2. The potential for conflict of interest, and just plain conflict is increased when inspectors and repair contractors start working together and giving estimates.

  3. The inspector is generally unqualified to do repair estimates.

  4. The inspector who hires outside consultants to do the estimates, doesn’t know at the time of the inspection what is in need of repair at that point, and so can’t bring the appropriate repair contactors at that point (the day of the inspection).

  5. It is not desireable for the outside consultant to also be a local repair contractor giving an estimate as it is a conflict of interest. So the inspector can’t use his consultant to also do the estimate, which means he has to find yet another consultant.

  6. Most arguments between client (typically the buyer) and the owner are over what level of repairs are needed and how much is going to be spent on repairs. Inspectors don’t want in the middle of those arguments, and certainly don’t want to be the one to settle them by putting $dollar amounts in writing.

The scope of work can define what items the client is interested in of course. A client might say, “I’m mostly worried about the roof.”

However a scope of work can’t possibly contain those items that an inspector discovers that might be of interest to the client. How could they? They haven’t been discovered at the time the scope of work is agreed to. So the burden of deciding what items might be of interest to the client, falls upon the inspector. Those items are the sum of what the client revealed is of interest to the client PLUS those items (that the client may not be yet aware of) that in the inspector’s opinion are likely of interest to the client (like a leaking sewer line no one knew of).

Actually, ASTM is very contradictory. First it says that documents should be reviewed. Then it says that the time and money needed to do that may exceed its usefullness. Then it says that the inspector should be paid for it. Then it says that once the inspector requests the docs, they have 10 days to receive it, or there is no further obligation to review them. Then it says if the inspector gets the docs after 10 days, but before 30, maybe they should review them anyway. Then it says that the costs of the docs should be low. Then it says that blueprints cost a lot.

Your head will be spinning. Bottiom line is that the requirement under ASTM is only on the Inspector if the inspector agrees.

As to maintenance costs, ASTM specifies that it is based on representative sampling, and limits what a material defficiency is to specific defects observed. he scope is NOT all inclusive. Cost estimates can be based on unit costs provided by the client, the inspector’s personal experience, a contractor, a database, or estimating program. It can be a bulk price (guestimate), and not be accurate. It need not be based on an accurate count. It says this in the ASTM standard… It states that it is a best guess, and that its probably not accurate. Finally, it says that if the inspector needs a specialist to get the price, the requirement becomes out of scope. There are contradictions and blanket disclaimers throughout the ASTM doc. You just need to understand what it really says, and whereto find what you are looking for.

I think the NACHI model does a good job of providing a more straight forward approach and interpretation.

First of all, a commercial inspection isnt a residential nspection. There are many differences, and often the client is more experienced and saavy. So, its best to pre-survey the property prior to the inspection. I teach to communicate with the client during this pre-survey, and understand what is needed and what they want. Often, through self-assessment, the inspector will automatically know which SME’s to bring.

Like I said, the process is completely different, and critical to limiting liability and delivering a quality product. As to discovery of defects, report everything.

I do not subscribe to many of the items specified in 2018. However, of the client requires compliance, as many will, it is important to know the doc. Like I said, I think NACHI has gone a long way in weaving through the muck and mire and developing a workable doc.

Just remember, this aint a home inspection.

The whole ASTM document review thing is nutty.

It is my opinion that most of the time, a document review that ocurrs on-site at the time of the inspection, (without the inspector driving all over town procuring documents that the seller probably has, documents the client already has, or documents that offer little new and useful information), will likely be of nominal cost to the client and thus holding to the main idea that:

anything the inspector does to acquire information should likely cost less than the value to the client of that information.

Hence: 5.2 and 5.3 of InterNACHI’s SOP.

Nick,

NACHI’s done a good job. But, sometime document review can be an important step in discoving the history or condition of a property. Like we can request a copy of a previous inspection. Or can request a copy of an ADA compliance review. Or can request COs. We can request maintenance records, contracts, invoices, warrantees.

These are all very good things, and they may not be available on the day of the inspection. But, remember, a commercial inspection can actually be a lucrative project, with many inter-related tasks, and span the course of multiple days. This is especially true if one is dealing with a campus environment.

Like I said, it aint a home inspection!

The scope of work agreement can make an inspector a lot of money.