Before you buy a property, it’s always a good idea to understand the condition of the building. If the building is old or there are issues that could be potentially costly, a condition report can provide an impartial, third-party view of the current state of repairs and maintenance at a property.
Sometimes known as a RICS Level 1 Home Survey, a Level 1 Survey or a Home Condition Report (HCR), this type of survey is usually requested by a prospective buyer or tenant as part of the process to lease or sell a property.
The report should be clear, concise and objective – a balance between high standards of professionalism and readability. It should also address all relevant areas in accordance with the RICS guidance, following the same format as the RICS condition report sample PDF, for example.
This article will explain what a condition report is, why you need one, who should write it and what information it should include. Read on to find out more.
What is a condition report?
A condition report is an independent assessment of the condition of a property. It is also known as a Survey, which is the name used by the Royal Institution of Chartered Surveyors (RICS).
The report could be requested by a prospective buyer to help them decide if a property is right for them or by a prospective tenant to decide if they want to rent a property. Alternatively, if you are a seller, the report could assist you when negotiating the price of your property.
It should not be confused with an insurance survey, which looks at the building’s structure and is estimated by a surveyor employed by the insurance company.
The report will ultimately assist you in making an informed choice about the property. It is likely to be used by a prospective buyer or tenant to help them decide if the property meets their needs and is safe for habitation, or if there are any remedial works that need completing before moving in or purchasing the property.
For example, if a buyer is applying for a mortgage, their lender may request the report so they can confidently adjudge the risk of lending. The lender will look for the report to highlight any defects or maintenance issues that could affect the value or functioning of the property. Equally, if there is a lot of remedial action needed to rectify any issues, this could also factor into their decision.
If you are a seller, a condition report could help you set a price that allows you to sell your property as quickly as possible, and one that takes into account any defects or issues. This removes any uncertainty around the sale and increases the desirability of the property.
It’s quite common to arrange this property inspection early on in the process, simply for the fact that if a prospective buyer requests a condition report late on, you could be faced with a delay while they arrange a surveyor.
Above all, for a seller, the condition report will highlight any issues that could affect the sale or lease of the property. This enables you to negotiate repairs or reductions in the price and to plan accordingly.
What is in a condition report?
A condition report should include a general, surface-level overview of the condition of the structure of the building, the state of repair, maintenance issues and any defects. The report should also make recommendations on any repairs that are needed and advise on anything important that needs addressing.
The Chartered Surveyor who writes the report should have a thorough knowledge of building regulations, energy efficiency, safety issues and other property-related matters. This will enable them to write a clear, concise report on the condition of the property.
The report should include a breakdown of the state of the fixtures and fittings, such as the plumbing and electrics. This should be done by assessing the condition of the items, not by testing them. You will receive two copies of the report from the surveyor: one for you and one for the other party involved in the transaction.
Condition reports are typically categorised with a traffic light system – green, amber and red.
- Green is level one, meaning that no repair is needed.
- Amber is level two, meaning that there are defects that need remedial action but aren’t inherently dangerous or urgent.
- Red is level three, meaning that the defects could potentially be a risk and need immediate attention or urgent repair.
Do I need a condition report?
A condition report is usually requested by the owner of a property, and the report is carried out by a Chartered Surveyor. Because the report is for people who are buying or selling a standard property, they are free from technical language.
They’re normally quite easy to understand and follow, so if there is anything that needs addressing there is no room for doubt. Sometimes, however, condition reports can be, or might need to be, a little more detailed and complex. This is especially true when it comes to commercial property or much older buildings.
Who carries out the condition report?
It’s always recommended that a qualified chartered surveyor conducts the condition report, as they are the most knowledgeable on a range of property-related factors. To find a qualified chartered surveyor in your area, RICS has developed Find a Surveyor to do just that.
Remember, it’s about accuracy and clarity – the more experienced the surveyor, the better the report. It could save a lot of issues down the road and using a cheap, unqualified option may lead to costly complications in the future.
How long does a condition report take?
The inspection doesn’t take too long, usually under an hour. However, this might be different if the property is much larger than a standard home, or is complicated due to the age or location of the property. If you’re looking to hire a surveyor to conduct a condition report, it’s a good idea to ask about time frames so you can prepare. In some areas, surveyors are in particularly high demand, so you could be waiting a while.
A condition report might sometimes require the use of specialist equipment like damp meters, but the inspection is typically visual, meaning the surveyor won’t pull up carpets or move furniture around unless it’s absolutely necessary.
For example, when it comes to the inspection of services like electrics and plumbing, the surveyor will not determine the efficiency or safety, instead they will conduct a visual inspection of the general condition. For more detailed reports about services, like electrics for example, home buyers should consult a specialist for an Electrical Installation Condition Report (EICR).
What’s the difference between an EICR and a condition report?
An Electrical Installation Condition Report is a report that specifically focuses on the inspection and testing of electrical installations at a property. The report will determine if the property is safe for tenants, building owners and occupiers. An EICR will identify, among other things, the integrity of the installation, any present damage to sockets and switches and whether or not the property complies with certain building regulations.
An EICR, which can also be known as a Periodic Inspection Check, focuses on the condition of the electrical installation, whereas a condition report looks at the wider condition of the property on a visual level. Like the condition report, the information in an EICR can be critical for determining and fixing any issues.
Another way that an EICR is different from a condition report is when it is needed. The Electrical Safety Council states that a registered electrician should check the electrical fittings and installation every ten years at least, or when there is a change of occupancy. Condition reports, however, are usually conducted when a property transaction is imminent. The same is true of other reports, like building surveys.
What’s the difference between a condition report and a building survey?
It’s not always clear which report is needed for which scenario, so it’s always recommended that you consult a surveyor. There are many different types of survey, and they all have their own requirements, standards and use cases. Whatever the case may be, surveys are a vital part of the home buying and selling process – 76% of homeowners had a survey carried out before buying a home.
There are three levels of survey you can choose from, as follows:
- Level 1 – Condition Report
- Level 2 – Homebuyer Report
- Level 3 – Building Survey
A condition report is one of the most basic surveys, though it is still important to obtain when transacting on a property. The condition report, as we’ve mentioned, offers a surface level overview of the condition of the property. A building survey, on the other hand, is a comprehensive survey that provides a detailed, in-depth assessment of the structure of the building, as well as the condition.
What happens after a condition report?
Once the report is completed and you’ve received a copy, you can then prepare for any remedial work. If the lender is satisfied that any issues raised in the condition report have been fixed or will not interfere with or influence the sale, then it can proceed as normal. Otherwise, you could negotiate on the price, knowing what you know about the condition of the property.
If anything on the report immediately jumps out as problematic, then you can make the decision not to proceed with the sale or ensure that remedial action is taken before it goes ahead. This all depends on the parties involved in the transaction, the sale process, and the nature of the defects.
If you are a prospective buyer or tenant and you’re applying for a mortgage, or if you are a seller, a condition report is an extremely important part of the process, highlighting important issues that could affect the sale or lease. Failure to obtain a survey could be potentially costly, so it’s always advisable to speak to a chartered surveyor if you need more information.