Protecting what matters: Best practices for trust property inspections

As a trustee, you recognize your fiduciary duty to act in the best interests of the trust. Failure to properly inspect and maintain properties can result in incidents associated with water damage, fires, theft, and liability claims arising from slips, trips, and falls, as well as injuries from operational features such as swimming pools and spas.

Following practical guidance and adopting best practices for conducting a thorough property inspection can help ensure that assets are protected.

When performing a property inspection, it’s essential to thoroughly understand the specific hazard exposures and risks associated with each property. This includes assessing potential threats such as fire, flood, windstorm, environmental hazards, structural characteristics, as well as evaluating the adequacy of existing mitigation measures. 

By identifying and understanding these exposures, trustees can make informed decisions to protect the portfolio’s value, ensuring compliance with insurance requirements, and proactively addressing issues that could impact the safety, marketability or long-term viability of the assets under management.

Conducting a thorough home inspection that includes both the interior and exterior of the structure is essential for accurately identifying potential safety hazards, maintenance issues and structural concerns that cannot be detected through a ‘drive-by’ assessment. 

Best practices for performing a property inspection begin with thorough preparation, including reviewing property records and previous inspection reports to understand historical issues and maintenance trends. Scheduling inspections at regular intervals–at least annually-ensures ongoing oversight and timely identification of potential risks. 

During the inspection, using a standardized checklist helps maintain consistency and completeness, while documenting findings with photographs provides clear evidence of property conditions. For specialized areas such as electrical systems or structural components, it’s advisable to engage qualified professionals to ensure accurate assessments. 

After the inspection, it’s important to have a structured process for documenting and tracking due diligence, including follow-up actions and remediation plans, to ensure all identified issues are addressed.

A property inspection should address several critical areas to ensure the safety, functionality and value of the asset. 

Key exterior elements that should be checked for signs of damage, wear, or improper drainage include:

• Roof
• Gutters/downspouts
• Windows/doors
• Foundation
• Driveways/sidewalks
• Landscaping

Inside the property, attention should be given to the following:

• Interior ceilings and walls, and basements for evidence of leaks, structural issues, or pest activity
• Essential systems such as electrical, plumbing, and HVAC must be inspected for proper operations

Additionally, safety features such as smoke/fire detection, water detection, lighting, and fencing/locks, should be tested to confirm that they are functioning correctly and provide adequate protection.

A proactive risk management inspection process is essential for identifying and mitigating potential property and liability hazards before they lead to costly losses. Whether the inspection relies on using a standard checklist or incorporates advanced technology such as AI, sensors, or drones to help recognize the risks, the process should remain dynamic and adaptable to evolving threats.