The structural engineer report, read the way an agent or a lender reads it

A structural engineer report is a licensed engineer's written opinion about a defined part of a building, sealed under Texas rules, and it is only as useful to a transaction as its scope, addressee and date allow. Before relying on one, an agent, broker or lender needs four answers: whose seal is on it, what question it was asked, what was actually observed, and whether its conclusion answers the condition in the file in words that match it.

The two documents 254 Engineering describes for transactions are the foundation evaluation and the roof certification. This post is about reading any firm's report, including those.

The seal makes it an engineer's report

Section 1001.401 of the Occupations Code requires a plan, specification, plat or report issued by a license holder for a Texas project to carry the license holder's seal. Rule 137.33 states the purpose: the seal assures the user that the work was performed or directly supervised by the engineer named, and it delineates the scope of that engineer's work. On sealing, the engineer takes full professional responsibility for it.

So an unsealed letter on engineering letterhead is not the document a file needs, and a sealed one covers only what its scope says. Who carries that responsibility on a Texas project, and why the term engineer of record is not defined in Texas law, is set out in the engineer of record in Texas.

Both the individual and the firm can be checked in minutes on the board's rosters, as the PE license lookup and what a firm registration is explain. 254 Engineering LLC is a Texas registered engineering firm, TBPELS Firm Registration F-29811.

Five documents share the name

People call all of these a structural engineer report or a structural engineer letter. They answer different questions, and a file can hold the wrong one.

• A foundation evaluation. The ASCE Texas Section guidelines define three levels, and a Level A report of first impressions must say that it is one. Only Level B and above carry measured floor elevations.
• A roof certification: a sealed opinion on the observed condition of a roof on the inspection date. On this firm's roof line it does not estimate remaining service life.
• A structural letter for a permit, which answers a building department's written request about a described element. It is a permitting document, described on the structural letters page, not a transaction report.
• Repair documents, which the guidelines call remediation documents: the plan, details and specifications a contractor builds from.
• A post repair letter. Section 7.8 of the guidelines says the engineer should provide a letter of substantial completion stating that the work generally conforms to the documents, and section 7.7 calls for floor elevations measured after the repair.

A forensic report on the cause of storm damage is a sixth kind again, and how it differs from an inspection and a certificate on the coast is covered in inspection versus forensic report.

Read the scope and the limits first

The scope paragraph says what the engineer was asked and what was examined, and the limits paragraph says what was not. A common misreading of a report treats its conclusion as broader than its scope.

• The addressee. A report addressed to one party is not automatically usable by another, and some lenders require being named.
• The date of the observation, which is the date the opinion describes. A report records a condition on a day; whether a lender treats it as current is that lender's rule.
• The level of investigation. A first impressions report is labelled as one under the guidelines, and it does not include measured elevations.
• What was not observed. Concealed framing, finished crawl spaces and areas without safe access should be named as not observed, with the reason.
• Who did the field work. Section 3.1 of the guidelines says the engineer should personally visit the site and be in responsible charge of the investigation.

Read the conclusion against the condition in the file

A lender's condition usually has its own words, and the report has to answer them. Fannie Mae's Selling Guide, at B4-1.3-06, is a clear example. Where an appraisal notes settlement, the lender must either provide satisfactory evidence that the condition was corrected or submit a professionally prepared report, based on an inspection of the property, indicating that the condition does not pose any threat of structural damage to the improvements.

A report that describes movement accurately but never states a conclusion on that question has not answered the condition. A report that recommends repair points the file to the other route, evidence of correction, which is where a post repair letter of substantial completion comes in. The same section says the lender decides whether an inspection is required and documents its decision and rationale in the loan file.

For a file with a foundation condition, the most efficient sequence is to send the engineer the lender's exact wording before the visit. The foundation inspection page sets out what the evaluation measures and states.

A report in hand and the seller's disclosure

Section 5.008 of the Property Code requires the seller of a single dwelling unit to give a written disclosure notice completed to the best of the seller's belief and knowledge. The statutory form asks about defects in the foundation and slabs and about previous structural or roof repair.

An engineer's report a seller has received is part of what that seller knows. How it bears on a particular notice is a question for the seller and the seller's own counsel. For an agent, the practical point is that a report produced during a terminated contract does not disappear when the contract does.

When to suggest a report, and when not to

A report is worth suggesting when the TREC inspection reports adverse foundation performance or structural deficiencies, when an appraisal or underwriting condition names a structural item, or when the seller discloses a previous structural repair and cannot produce the documents behind it. In that last case, ask first for the repair documents and the letter of substantial completion, which may already answer the question.

It is not worth suggesting for a stable hairline crack with nothing else around it. A home inspector's foundation opinion, made under rule 535.228(a), already addresses performance, and a crack in the foundation sets out which cracks point to movement.

What to send the engineer before the visit

• The written condition from the lender or underwriter, word for word.
• The pages of the TREC report that prompted the question.
• The seller's disclosure notice and any prior repair documents.
• The name of every party who needs to be named on the report.
• The closing date and the end of the option period.

With those in hand an engineer can say before the visit whether the requested report can answer the condition at all. Each line's fixed fee is on the published price list.