The move between residential and commercial inspection, on paper, can look like a monumental leap, but is it really? Before considering the move between residential and commercial property inspections, there has to be an understanding of what a commercial property really is.
The Certified Commercial Property Inspectors Association (CCPIA) defines commercial properties as building structures and improvements located on a parcel of commercial real estate. These may include structures such as buildings with residential units operated for profit, mixed-use buildings, strip malls, motels, factories, storage facilities, restaurants, and office buildings. A commercial inspection requires the inspector to make observations, conduct research, and report findings, in accordance with the ComSOP.
These descriptions of the building and the inspection are similar to what a residential inspection is with an exception—these are simply different types of buildings. There are walls, roofs, mechanical systems like heating and cooling, electrical and plumbing, and structural elements like foundations and walls.
What Are the Main Differences Between Commercial and Residential Property Inspections?
The Standards
InterNACHI® created a residential inspection standard of practice that has been widely adopted across the world. The CCPIA in conjunction with InterNACHI® created a standard of practice called the ComSOP, which is also being recognized as a commercial inspection industry standard. These two standards both explain what an inspector should and should not inspect. Both standards help create a level of client care that can produce a very thorough and reliable inspection report.
The ComSOP is designed for commercial inspections, which may also encompass multi-family inspections where four or five units are to be inspected. The specific number of units may depend on individual company policies and the AHJ’s Authority Having Jurisdiction definition of residential versus commercial property.
Types of Clients
Residential clients save for years to purchase a home. They search endlessly for the “right” home, in the “right” neighborhood, and at the “right” price. When they finally find the home they’ve been looking for, they have only 5 to 10 days to have a home inspection performed. The goal of the residential inspection is to find as much information as possible about the home and potentially negotiate a lower price in order to have everything “perfect” before they move in. For the residential client, the entire process involves a great deal of emotion and anticipation, which hinges on the home inspection.
On the other hand, commercial clients need to move their businesses or possibly start new businesses, which require commercial spaces. They use a realtor to help them find the “right” building in the “right” location; this process might take years to accomplish. When they finally locate the building and space they want, they have 30 to 90 days to provide any inspections they would like to have performed. The goal of the inspections is to identify if there are any issues with the building and what systems will need to be changed before they can move their operation there. This process is strictly a business acquisition and does not involve a great deal of emotion compared to a residential inspection.
For instance, residential inspection clients are more likely to call an inspector to come back to a property because there is a drip at the bathroom faucet or a clog in the roof gutter. Residential clients expect a maximum return from their inspection and want the home to be perfect after the negotiated repairs. However, commercial inspection clients are more concerned with the functionality and maintenance of important systems and components of the building and understand that things may fail over time. These clients rarely call the inspector, and if they do, it’s because they are looking for advice—not to recoup money.
Systems within a Property
Residential and commercial properties have similar systems and components, such as a roof, plumbing, electrical, structural, heating, and cooling. Commercial properties have the same components—only most of them are larger and more complex.
- A home might have a 100- or 200-amp electric service while a commercial building might have up to 2,000 amps of service.
- A home will typically have a sloped roof while a commercial typically has a flat roof.
- A home may have a split heating and cooling system whereas a commercial building may have a packaged unit.
Additionally, there are subtle differences between the SOP inspection requirements; for example, commercial inspections include the property’s landscaping, whereas residential inspections do not. It is important for inspectors to become familiar with ComSOP, so no element is overlooked. A commercial property inspector should also remember that there are three major systems that the client is most concerned about: (1) roof surface, (2) HVAC systems, and (3) the parking lot. These three systems will, without a doubt, cost the commercial client the most to repair or replace.
The Inspection Process
The inspection process for both residential and commercial inspections are similar. The inspector visually examines the readily accessible systems and components, gathers information about these systems, and interprets any issues so they can prepare an inspection report for their clients. In most cases, the procedure for the property inspection is similar, but through the ComSOP, a commercial inspector has a few additional limiting factors.
A commercial inspector is not required to walk any sloped roof surfaces or access any flat roofs which do not have a permanent means of access. A commercial inspector is also not required to carry a ladder to get to the roof.
A commercial inspector is not required to remove panelboards, cabinet covers, or dead front covers on electric panels and other equipment, nor should they insert any tool, probe, or device into them or any other fixture. However, residential inspectors routinely remove these items and expose themself to potential danger.
Sourcing the Inspections
Residential and commercial inspections can share many of the same referral sources. They both rely on clients to find them online or through direct referrals from real estate agents or lenders and by word of mouth. The biggest difference between direct referrals is that the amount of real estate agents who specialize in commercial properties is less than agents in residential properties.
One benefit or advantage of moving from residential to commercial inspections is the list of past clients, real estate agents, and relationships gained. Each of these individuals could be potential commercial clients. A commercial inspector should never enter the market quietly. Instead, everyone in their network needs to be made aware of their professional skills, services, and experience inspecting commercial properties.
Stretching the Comfort Zone
Many residential inspectors are already doing some very basic commercial inspections. They might be inspecting a residential property in the heart of the city that has been converted to an office building. The structure still looks like a home, but everything on the inside is an office. In this case, would it be a commercial inspection or a residential inspection? The operation is a business so the inspection would be a commercial inspection. Another inspection opportunity might be a building with a storefront on the ground level and an apartment above it. This too would be considered a commercial property inspection.
Both of these inspections are typical entry or gateway inspections for the transition between residential and commercial. Any inspector who can maneuver or migrate through these can transition to commercial inspections.
Why Start Commercial Inspections?
Residential inspections have been a consumer staple for more than 40 years. While inspections are being conducted for commercial properties, they have not yet matched the rate and frequency of home inspections. This means that there is a lot more opportunity for commercial inspectors to enter the market.
A major benefit to moving from residential to commercial inspections is being able to charge a higher inspection fee. The competition level in residential inspections makes it difficult for an inspector to charge beyond that of the marketplace, but having less competition allows a commercial inspector to charge a fair, yet higher rate for this service. Commercial buildings are often more expensive as well as larger in size. The client also expects to pay more for a commercial inspection than they would for a residential inspection.
Inspectors who want to start performing commercial inspections must consider training programs. There are a number of recognized training programs that the CCPIA offers in the form of online courses, hands-on training classes, resource libraries, training videos, marketing support, and sample business documents like agreements and checklists.
Next Steps
Inspectors can start their training online by visiting ccpia.org/online-courses or by registering for a hands-on training class at ccpia.org/in-person-classes. Hands-on training is hosted nationwide. An organization like the CCPIA could not only provide the Standards of Practice (ComSOP) but also training and industry support.
As more consumers and real estate agents see the benefits that a well-trained inspector can provide, there will continue to be growth and a stronger need for more commercial inspections and inspectors. Regardless of city size, every community has businesses that have buildings that may require a commercial inspection.
Article Written By: Rob Claus, CCPI