Glossary

The terms of ASTM E2018-24 and the lender forms, in plain language.

• Action Codes in the Systems Summary

  Lender-facing reports open with a systems summary: one row per building system with its condition rating, an action code and the immediate, short-term and reserve totals attributed to it. The codes are a convention, not

  PCR practice; E2018-24 s11.4.2 · Updated September 18, 2026

• Additional Considerations

  E2018's baseline excludes environmental, accessibility, seismic, energy and similar assessments. When the user wants limited observations on any of them, the guide provides for their inclusion as additional consideration

  E2018-24 s11.8 · Updated September 18, 2026

• Baseline Property Condition Assessment

  E2018 calls the assessment it describes a baseline: the minimum level of observation, due diligence, inquiry, document review and opinions of cost that constitutes a PCA under the guide. The word is in the guide's full t

  E2018-24 s3.2 · Updated September 18, 2026

• Capital Needs Assessment (CNA / PCNA)

  A capital needs assessment is HUD's equivalent of a property condition assessment for its insured multifamily and healthcare programs. It describes the major building systems and their condition, reviews accessibility, a

  HUD MAP Guide · Updated September 18, 2026

• De Minimis Condition

  E2018 excludes de minimis conditions from the definition of a physical deficiency. In substance, a condition is de minimis when it does not present a material physical deficiency because it neither threatens the safety o

  E2018-24 s3.2 · Updated September 18, 2026

• Deviation from the Guide

  Because E2018 is a baseline that users scope up or down, the report has to say where it did. The executive summary carries a deviations section listing each departure: a replacement reserve table (an appendix enhancement

  E2018-24 s11.4 · Updated September 18, 2026

• Effective Age

  Effective age is defined in E2018 as the difference between expected useful life and remaining useful life. It is not the calendar age. A well-maintained unit installed in 2004 with a fifteen-year expected life and an ob

  E2018-24 s3.2 · Updated September 18, 2026

• Engineer to Provide (ETP)

  E2018 does not require exact quantities and allows extrapolation, but it does require that each cost line carry a quantity, unit and unit cost from a stated source. When the field observer could not establish the quantit

  PCR practice; E2018-24 s10.3.4 and s10.3.5 · Updated September 18, 2026

• Evaluation Period

  The evaluation period is the horizon of Table 2. E2018-24 asks the user to define it up front, and the reserve table lists every component whose useful life ends within it. Ten years is the common choice for a buyer or a

  E2018-24 s5 and Appendix X1.2.5 · Updated September 18, 2026

• Executive Summary (PCR)

  The executive summary is the most-read section and the one E2018 specifies most closely. It must carry a general description of the property (use, size, age, location, construction type, occupancy) and of the engagement

  E2018-24 s11.4 · Updated September 18, 2026

• Expected Useful Life (EUL)

  Expected useful life is the starting point of every reserve line. E2018 defines it as the average period a component is estimated to function without material repair when new and properly maintained. The guide does not s

  E2018-24 s3.2 · Updated September 18, 2026

• Field Observer and PCR Reviewer

  E2018 describes the field observer as the person who conducts the walk-through survey, most likely a single individual with a general, well-rounded knowledge of building systems; specialists may be brought in for particu

  E2018-24 s7 · Updated September 18, 2026

• Immediate Costs

  Immediate costs are the first of E2018's three cost categories. Under the 2024 edition an item is immediate if it meets any of three tests: it is an imminent life-safety issue; leaving it uncorrected would be expected to

  E2018-24 s3.2 and s10.3 · Updated September 18, 2026

• Inflation in the Reserve Table

  Long-term costs are opinions in current dollars. To show what a replacement will cost in the year it falls due, the reserve table applies an inflation factor, and E2018's long-term-cost appendix notes that the factor is

  E2018-24 Appendix X1.2.5.1 · Updated September 18, 2026

• Life-Safety Item

  Two of E2018's rules turn on the phrase. The immediate-cost definition's first test is an imminent life-safety issue, and the reporting-threshold provision notes that life-safety items and code violations are generally r

  E2018-24 s3.2 and s10.3.1 · Updated September 18, 2026

• Limiting Conditions

  E2018 requires the report to state its limiting conditions: the constraints on what the consultant could observe, review and conclude. In practice the section lists areas not accessed and why (tenants declined, no safe r

  E2018-24 s11.10 · Updated September 18, 2026

• Long-Term Costs (Replacement Reserve)

  Long-term costs were named as a defined term in the 2024 edition of E2018. They are opinions of cost for anticipated replacement of building systems and components reaching the end of their expected useful life within an

  E2018-24 s3.2 and Appendix X1.2.5 · Updated September 18, 2026

• Opinion of Cost

  E2018 uses "opinion of cost" deliberately. The figures in a PCR are preliminary, order-of-magnitude budgets, not estimates or bids, and the guide says they should be construed that way. Each is built from an approximate

  E2018-24 s10 · Updated September 18, 2026

• Out-of-Scope Considerations

  Section 12 of E2018-24 lists what the baseline assessment does not include, in two groups. Activity exclusions: removing or repositioning materials and finishes, exploratory probing, dismantling or operating equipment, e

  E2018-24 s12 · Updated September 18, 2026

• Physical Deficiency

  A physical deficiency is the unit of the cost tables. E2018-24 defines it, in substance, as an easily visible defect or deferred maintenance of a material building system or component identified during the assessment. Tw

  E2018-24 s3.2 · Updated September 18, 2026

• Point of Contact (POC)

  E2018 makes providing a point of contact one of the user's responsibilities. The POC is usually the property manager or the owner's representative: the person who returns the questionnaire, gathers the documents, escorts

  E2018-24 s5 and s8 · Updated September 18, 2026

• Pre-Survey Questionnaire

  Document review and interviews are the second component of the assessment, and the pre-survey questionnaire is how they start. The guide asks the consultant to send the owner's point of contact a questionnaire before the

  E2018-24 s8 · Updated September 18, 2026

• Property Condition Assessment (PCA)

  A property condition assessment is the process; the property condition report is the document it produces. Under E2018-24 the assessment has three components: a walk-through survey of the readily accessible areas of the

  E2018-24 s3.2 · Updated September 18, 2026

• Property Condition Report (PCR)

  The property condition report is the document that records the assessment. E2018-24 prescribes its contents but not its format: an executive summary (general description, findings and opinions, deviations, consultant dis

  E2018-24 s11 · Updated September 18, 2026

• Readily Accessible and Easily Visible

  Two defined terms bound what a PCA observes. Readily accessible areas are those the owner has made available for observation and that can be reached without removing or moving materials, entering confined or unsafe space

  E2018-24 s3.2 · Updated September 18, 2026

• Recognized Environmental Condition (REC)

  The term belongs to the Phase I environmental site assessment under ASTM E1527, where a recognized environmental condition is, in substance, the presence or likely presence of hazardous substances or petroleum products o

  ASTM E1527-21 · Updated September 18, 2026

• Reliance Letter

  A PCR is prepared for its user, and its limiting conditions restrict reliance to that party. When a lender, a loan participant, a trustee or a subsequent buyer wants to rely on the same report, the consultant issues a re

  PCR practice; E2018-24 s11.10 · Updated September 18, 2026

• Remaining Useful Life (RUL)

  Remaining useful life is defined by E2018 as a subjective opinion of the years remaining before a component will need replacement, and the guide says explicitly that it is not a guarantee of performance. It is where the

  E2018-24 s3.2 · Updated September 18, 2026

• Reporting Threshold

  The guide's default threshold is $3,000: physical deficiencies whose opinion of cost falls below it are omitted from the cost tables and treated as routine maintenance. The user may set a different threshold, disclosed a

  E2018-24 s10.3.1 · Updated September 18, 2026

• Representative Observations

  A walk-through cannot open every tenant suite or inspect every window. E2018 allows the field observer to observe a reasonable sample of repetitive systems and components and to extrapolate conditions and costs from it,

  E2018-24 s3.2 and s11.2.4 · Updated September 18, 2026

• Routine Maintenance

  Routine maintenance is work that ordinary maintenance staff do with an ordinary budget: filter changes, cleaning drains, touching up paint, replacing lamps, periodic sweeping. E2018 excludes it from physical deficiencies

  E2018-24 s3.2 · Updated September 18, 2026

• Short-Term Costs

  Short-term costs cover physical deficiencies that do not meet the immediate tests but should be undertaken on a priority basis. Older editions of the guide suggested a one-to-two-year window; the current text gives no nu

  E2018-24 s3.2 and s10.3 · Updated September 18, 2026

• Source Attribution (Observed, Reported, Documented)

  One writing rule in E2018 shapes every sentence of a PCR: the report must differentiate between what the field observer's own knowledge and observations established and what was reported by the owner, the point of contac

  E2018-24 s11.2.3 · Updated September 18, 2026

• Table 1 (Immediate and Short-Term Repairs)

  Table 1 is the schedule of physical deficiencies and their opinions of cost. E2018 requires immediate and short-term costs to be segregated, so the table has two groups with subtotals and a combined total; many firms gro

  E2018-24 s10.3.7 · Updated September 18, 2026

• Table 2 (Replacement Reserve Schedule)

  Table 2 is the long-term-cost schedule, included when the user asks for a reserve view and listed as a deviation because it is an enhancement to the E2018 baseline. Each line is a component with its expected useful life

  E2018-24 Appendix X1.2.5 · Updated September 18, 2026

• The Four-Items Rule

  The reporting threshold omits small items so the tables stay material, but a building can have a dozen small failures of the same kind that add up. E2018's provision on the threshold amount addresses this: if there are m

  E2018-24 s10.3.1 · Updated September 18, 2026

• User (of a Property Condition Report)

  The user is the guide's word for the client: the party that engages the consultant and relies on the report. The 2024 edition asks the user to define the objectives of the assessment and the evaluation period for long-te

  E2018-24 s3.2 and s5 · Updated September 18, 2026

• Walk-Through Survey

  The walk-through survey is the first of the assessment's three components. E2018 limits it to readily accessible and easily visible areas, allows representative observations of repetitive elements provided the extent is

  E2018-24 s9 · Updated September 18, 2026