What is a Physical Needs Assessment (PNA)?
A Physical Needs Assessment (PNA) is best described as a pre-purchase inspection report of a multi-family residence or Community Association Facility (Sectional Title Developments/Life Rights etc). Similar to a single-family residential pre-purchase inspection, the PNA identifies the repairs, replacements, and significant maintenance items that will require attention over the term of the mortgage or alternatively over a given time such as a 3 year Needs Plan or similar.
It indicates to the prospective investor of a “Unit” the condition of the Asset they are buying into as well as the risk potential for raising of Special Levies by Administration or Body Corporate’s and general levy increases linked to the Physical Conditions of the Property.
Most often, the PNA will also require an estimate of the costs to implement the recommended repairs or replacements. It may therefore also be referred to as a Capital Needs Assessment.
The scope of services included under the general heading of a Physical Needs Assessment may vary significantly from project to project. Certain types of PNA’s cover just the building exterior and common areas. Some include interiors, but again only those elements that are common or maintained by the management/body corporate. Other elements that may or may not be within the scope of services are:
- Structural Systems and Roofs.
- Mechanical Systems.
- Appliances.
- Grounds.
- Outbuildings and Amenities (e.g. club houses, pools, etc.)
- Review of Body Corporate Minutes and AGM Documentation
