One of the most common tools for managing risk associated with construction adjacent to existing structures is the pre-construction condition survey. In some circumstances, pre-construction surveys are required by law under building codes and they are typically required by contract on most large projects. However, pre-construction condition surveys are often procured as a commodity service. Consequently, a lot of pre-construction condition surveys are executed poorly and fail to provide the intended risk management benefit.
First, a definition, if you are unfamiliar with this process: A condition survey is a rapid, systematic visual observation and documentation of a facility. The observations are cursory and non-invasive, typically made without the use of equipment or moving finishes and furnishings. The documentation is usually qualitative and takes the form of an inventory of conditions observed. The nature of the observation and documentation can be varied for a particular purpose. A pre-construction condition survey program involves performing condition surveys of properties in the vicinity of construction activities that might foreseeably be damaged by those activities.
The primary purpose of performing pre-construction surveys is to mitigate the risk of abutter claims of construction damage. People do not typically notice minor distress in their homes and workplaces on a day-to-day basis. When people become concerned about adjacent construction due to noise, vibration or other impacts, they will notice pre-existing distress for the first time and associate it with the construction. This can lead to complaints, violations and stop work orders being issued by building officials, as well as mitigation and repair costs, project delays and litigation. Reduction of this risk requires prevention or timely evaluation of these claims.
The most obvious way that pre-construction surveys mitigate risk from damage claims is through the credible documentation and communication of existing conditions in the pre-construction condition survey report. This report is a baseline document of the condition of adjacent properties with which potentially construction-related conditions can be compared. While the report cannot prove a change in condition to be construction-related, proper documentation can indicate whether a condition is preexisting and not substantially changed by construction, which is necessary to resolve many claims.
However, a successful pre-construction condition survey program can mitigate risk in other ways that are not as well appreciated. By communicating with owners and occupants of adjacent structures it is possible to manage expectations. The abutters can be made aware of the scope of construction and likely impacts, hopefully putting some fears to rest. If an occupant is made aware of existing conditions in their home or workplace, some specious claims can be avoided. Installation of instrumentation, where permitted, can demonstrate to abutters that due care is being taken to protect their property. In addition, occupants can sometimes be enlisted in the monitoring program, by teaching them to read crack gauges and look for changing conditions themselves, thus providing a sense of control and early warning to the construction team.
If the condition survey is performed by sufficiently qualified personnel, further risks can be reduced. Occasionally a serious condition might be encountered in an adjacent structure that elevates the risk of construction. If these conditions are well documented and understood by the field staff and responsible professionals, then the hazard can be communicated to stakeholders and mitigated in advance. In addition, the access to adjacent properties during pre-construction surveys can allow confirmation of assumptions made in the design of protective systems.
Since a pre-construction condition survey is a risk management exercise, the scope should reflect the risk of damage to adjacent structures, or least the likelihood of claims. It is also appropriate to balance risk mitigation with cost in determining the scope. Consequently, there is no single level of service or standardized, prescriptive procedure for pre-construction surveys. However, condition surveys and similar means of investigating existing conditions are used for other purposes. Approaches used to investigate buildings for real estate transactions, facilities management and planning renovations and alterations can be useful in performing pre-construction surveys.
Like a lot of services in the construction industry, condition surveys are often procured on a low-bid basis, overemphasizing their cost and neglecting their role in risk management. Since there is no standardized method of performing a condition survey, and a degree of skill and judgment is required in planning and executing a pre-construction condition survey program, commoditization inevitably affects the quality and the usefulness of the effort.
One typical way of reducing the cost of a condition survey is to use staff with lower billing rates. Compared to investigations with more technical objectives, the potential consequences to using less experienced or less technical field staff for a pre-construction condition survey is modest and the use of more expensive staff may not add commensurate value. Therefore, technicians and junior professional staff are typically used to perform condition surveys. However, some experience and some understanding of structures and materials are necessary to describe conditions encountered in the field properly. Not all firms recognize this and instead assign instrumentation or materials testing technicians to perform the field observation, with insufficient training and oversight.
The cost of a pre-construction condition survey can be reduced through the choice of what is observed in the field. The decision of what structures to survey, and whether to observe all or parts of a given structure, should be based on the likelihood of damage to that structure. In addition, data collection methods can influence the time in the field and the effort to assemble reports, but this can be a false economy if not done thoughtfully. A lot of firms document only the general conditions using video or a small number of photographs. As a result, minor distress that may be easily mistaken for construction damage is not documented. For trained field staff, it does not take much more time to thoroughly document all observed distress, than to observe general conditions alone. Therefore the cost reduction from less detailed documentation will often be outweighed by an increase in claims risk.
The effort required to prepare a pre-construction condition survey report can be disproportionately large, depending on how easily the field data can be organized and summarized. Thus the report is often a target for cost savings. The risk of a cheap report is that information collected in the field does not become part of the record and is effectively lost. In low-cost reports, the type of construction and general conditions of structures observed are commonly described in little detail. Instead, the condition of the structure might be described subjectively as “good” or “poor”. Some firms do not have senior staff review condition survey data and reports. If the field data are self-explanatory and high quality, the report can serve as a cover letter for the data and need not be exhaustive. However, a lot of pre-construction condition survey reports comprise only a short, unspecific report and an incomplete collection of photographs, without field data. In this case, not only is information likely lost, but the data left out of the report are not readily available for use as a baseline of existing conditions. Further, the credibility of data that is left out of the report can be impugned if later needed to evaluate claims. Thus cutting the cost of report preparation can negate much of the value of the field data observations.
The problem of commoditizing pre-construction condition surveys is, in part, a result of failing to understand how they are used to evaluate claims. In a lot of cases, an abutter will suspect that some element of existing, minor distress has deteriorated as a result of construction. The response to such a claim is a visit by an engineer, who will look at the distress and attempt to determine if construction activities are a plausible cause of damage. A high-quality pre-construction survey report will allow the engineer to determine if the condition changed during construction, but this requires detailed data collection and the inclusion of all data in the report. Many of the pre-construction condition survey reports I have seen have failed to be useful in evaluating this sort of claim.
One might think that it is not a problem if a pre-construction survey does provide an adequate baseline to evaluate a minor claim because the intent is to be able to evaluate serious damage. If this is the intent, forfeiting some ability to defend a minor claim in exchange for a lower cost may be a reasonable trade-off. However, serious damage is typically easier to attribute to construction because of the damage patterns that occur when a structure moves significantly. Therefore the value of a pre-construction survey for evaluating major damage exclusively is more limited than might be realized. Also, claims for minor damage often result in stop work orders, violations and construction delays, which are among the risks that pre-construction condition surveys are intended to avoid.
It is important to recognize that pre-construction condition surveys are a risk management tool. They should be planned to reflect the specific construction hazards associated with the project, the fragility of adjacent structures and the risk tolerance of all relevant stakeholders. This requires a more thoughtful approach than solicitation of the lowest bid. Thorough baseline documentation is needed for the prevention and expeditious resolution of construction damage claims from abutters. However, the approaches that firms use to provide condition surveys on a low-bid basis significantly reduce the usefulness of these services to fulfill their intended purpose. Thus the commoditization of pre-construction surveys is a short-sighted approach in which a cost reduction of a few thousand dollars may be offset by tens if not hundreds of thousands of dollars in potential claims that are more difficult and costly to resolve.
The information and statements in this document are for information purposes only and do not comprise the professional advice of the author or create a professional relationship between reader and author.