Most Common Areas of Concern

As a member of the board or the property manager, what element of the condo complex poses the greatest danger to the unit owners and liability to the association? Slips and falls during the icy season? Decks collapsing from rot? Electrical fires? Well, if you picked “decks,” you are almost right.

If the condition of the complex’s decks is a concern, the good news is decks rarely collapse. Wood decks built more than 20 years ago can have some significant deficiencies by today’s standards. Most deck collapses are the direct result of inadequate attachment to the building, that is, the connection between the deck ledger and building band joist. The U.S. Forest Products Laboratory’s recent study of newspaper articles from around the country reported on collapsed decks and showed “nearly every collapsed deck had been attached with nails, rather than bolts, and investigators had pinpointed nails as the cause of the collapse.”

Deck Deficiencies & Inspections

More than 20 years ago many decks were attached to buildings using nails that rust away or simply do not have the lateral holding power of bolts. To make matters worse, developing problems are often not noticed in a casual visual inspection because the ledger board is hidden behind the siding. This problem is compounded by past deck building practices not protecting the ledger due to a lack of adequate flashing. On Maine’s coast, the salty air creates some very corrosive chemistry on deck components. Fortunately, these type of old decks are disappearing from Maine’s condo inventory.

If your building committee wants to perform an in-depth inspection of all components of the decks, there are many publications providing good technical information such as:

1. 1. Prescriptive Residential Deck Construction Guide (DCA6) published by the American Forest & Paper Association (AF&PA), available as a free download from its website, www.afandpa.org, or stream on YouTube. Though this is not a building code it helps to explain the nature of safe deck building and can serve as an invaluable supplement.
   2. Manual for the Inspection of Residential Wood Decks and Balconies. Written by researchers at Virginia Tech, this manual was published by the Forest Products Society in cooperation with the International Commercial Code (ICC) as a practical guide with good illustrations.
   3. How to Perform a Deck Inspection by the International Association of Certified Home Inspectors (InterNACHI).

Studying these documents could be a rewarding exercise for the members of the building committee, but as stated earlier to truly zero in on the most dangerous condo asset, “decks” is “almost right.” The actual answer is stair and guard rails of decks.

Deck Stairs, Handrails & Guard Rails

Accidents related to stairs are the second-leading cause of accidental injuries in the United States, according to the National Safety Council, responsible for 12,000 deaths annually and for non-fatal injuries costing $92 billion a year. Only automobile accidents take a higher toll.

Handrails must run continuous down the flight of stairs with four or more risers and should be 34 to 38 inches above the treads with a minimum distance of one and a half inches from a wall. Guard rails must be 36 inches above the deck (42 inches for multi-family buildings covered by IBC code) and able to withstand a 200-pound force from any direction. Balusters must be able to handle a 50 pound per square foot force while being spaced a maximum of four inches apart.

A common mistake builders make is to install a handrail not conforming to building code. There are only two approved shapes which do not include a 2×4 or other odd shape. However, the building committee’s primary concern should be safety and not code compliance. The question to be addressed is, “Does the stair, hand, or guard rail provide the safety needs given where the stairway or deck is located, and how it is used.” Accidents are preventable. Regular deck maintenance inspections will find where typical problems can be found. Providing guidance to your unit owners of what to look for and how to report observed deck component issues will go a long way in reducing accidents and raise the quality of life in a real sense.

Article written by Jack Carr, P.E., R.S., LEED-AP, Criterium Engineers
Published in Condo Media
Download a PDF Version of this Condo Media article

Winter is approaching much of North America. This season plagues even the sturdiest among us—as with winter comes the inevitable storms of the season.

Here are a few winter tips to help you prepare for and deal with the season:

• Insulate the attic to keep roof surface cold and help avoid ice dams.
• Maintain emergency generator’s fuel supply.
• Insulate pipes in basement and unheated spaces.
• Check battery-powered equipment, replace any weak or questionable batteries.
• Confirm operation of an alternative power source for any life support medical equipment in use.
• Fill the gas tank in your cars.
• Store drinking water in jugs, bottles, and bathtubs, in case you lose your source of water.
• Secure outdoor objects.
• Cautiously proceed with storm cleanup!

When you finish your winter tips preparations and tasks, be sure to get out and enjoy the season. Go for a nature walk, snowshoe, cross country ski, ice skate, or sledding with the kids or grandkids. Embracing the season makes it much more tolerable and enjoyable!

When weather penetrates a building, it can be a costly issue that compromises the functionality and habitability of the building and may eventually lead to structural issues. While there is no single tactic that will prevent water from entering a building, incorporating Third Party Quality Assurance during construction or renovation is essential for reducing the risk of future weather-related problems. One important step in the Quality Assurance process is Water Intrusion Testing provided by Criterium Engineers’ Certified Technicians.

Understanding Water Intrusion Testing

Water Intrusion Testing, (also known as Water Penetration Testing) is a set of standardized field tests that evaluate the performance of building installations such as windows, doors, skylights, exterior facades, and curtain walls for water penetration resistance. Often, water inadvertently enters a building because of manufacturing defects. At Criterium Engineers, we adhere to standards set by the American Society for Testing and Materials (ASTM International), including ASTM E 1105 “Standard Test Method for Field Determination of Water Penetration of Installed Exterior Windows, Skylights, Doors, and Curtain Walls, by Uniform or Cyclic Static Air Pressure Difference.”

The process includes an initial test on mock-up installations or early installations in the construction of a new building Results are reported and retesting any failed items is scheduled after recommendations are implemented.

This article concerns Water Intrusion Testing as part of the construction process on new structures. This type of testing is also performed by Criterium Engineers on existing buildings during forensic inspections of reported damage for insurance investigations.

Why Water Intrusion Testing is Important

Water intrusion can lead to several issues, including:

• Mold and Mildew Growth: Moist environments are breeding grounds for mold and mildew, which can present health risks to occupants and degrade indoor air quality.
• Structural Damage: Persistent water infiltration can weaken building materials, leading to structural damage and expensive repairs.
• Legal Issues: A building owner may delay closing on a project if there are leaking issues, which can lead to back charges, missed deadlines, and breach of contract claims if a building is not delivered on time. Legal claims may also be brought against contractors after occupancy if unit owners experience leaks.
• Aesthetic Degradation: Water stains and damage can ruin the appearance of a building, affecting its value and appeal.
• Personal Property Loss: Any personal property of building occupants, business inventory or equipment, vehicles, or other items could be damaged if they are inadvertently exposed to water.

While Water Intrusion Tests are only one part of a comprehensive Third Party Quality Assurance program, they are an essential method for reducing the risk of future weather related issues. By including Water Intrusion Testing early, building owners, contractors, and inspectors can identify potential weaknesses in the building envelope system and take corrective actions before significant issues arise.

The Criterium Engineers Testing Process (Based on ASTM E 1105)

Criterium Engineer’s Water Intrusion Testing is conducted in the field and involves the following steps:

1. Preparation: The test area is prepared by installing a test chamber on the interior side of the building component being tested (e.g. window, door, skylight). The chamber is sealed to prevent air leakage.
2. Water Spray Rack Setup: A calibrated water spray rack is set up to simulate rainfall. The system is designed to deliver a uniform spray of water over the test area at a specified rate, usually 5 gph/sq ft.
3. Air Pressure Differential: A blower system is used to create a static air pressure difference between the interior and exterior sides of the building component, with a minimum pressure dependent on the specific installation. The pressure differential is typically set to simulate wind-driven rain conditions.
4. Testing: The water spray is applied while maintaining the specified air pressure differential. The duration of the test and the pressure levels are based on the building’s location and expected weather conditions, but most tests include four (4) five-minute cycles with one minute of rest between.
5. Inspection: During and after the test, the interior side of the building component is inspected for signs of water penetration. Any leakage and the time of the leakage during the test is documented, and the test results are used to assess the performance of the building component.
6. Collaboration: Working with Criterium Engineers provides access to our team of certified Field Technicians, Licensed Professional Engineers, and Building Envelope specialists to discuss potential causes of failing installations and solutions for remediation.

Interpreting Test Results

The results of the Water Intrusion Test provide valuable insights into the weather resistance of building components. If water penetration is detected, it indicates a failure in the building envelope that needs to be addressed, and then retested with the same parameters. Common sources of water intrusion include improper installation, defective materials/components, and design flaws.

Conclusion

Water Intrusion Testing is an essential tool for ensuring the durability and performance of building envelopes. By identifying potential weaknesses and addressing them proactively, building owners and contractors can prevent costly damage or rework and maintain the integrity of their structures. Whether you are constructing a new building or maintaining an existing one, incorporating Criterium Engineer’s Water Testing Services into your quality assurance process is a smart investment in the long-term health and safety of your property.

For real estate investors and property owners, actively managing tax liability is essential in maximizing ROI. One strategy for reducing tax burdens is a Cost Segregation Study, provided by Criterium Engineers. This is often paired with Bonus Depreciation. When combined, these tools allow property owners to accelerate tax deductions, improving cash flow and boosting profitability.

What is a Cost Segregation Study?

Cost Segregation is a tax planning strategy that breaks down a building’s components into different asset classes with varying depreciation periods. Instead of depreciating the entire property over 27.5 (residential) or 39 (commercial) years, cost segregation identifies components such as lighting, flooring, permanent fixtures, or landscaping that can be depreciated over shorter time frames — usually 5, 7, or 15 years. By accelerating depreciation, property owners can claim more deductions in the earlier years of ownership, which reduces taxable income.

What is Bonus Depreciation?

Bonus Depreciation is a tax provision that allows businesses to deduct a large percentage of an asset’s cost in the year it is first used in service, rather than spreading the deduction over its entire useful life. Under the Tax Cuts and Jobs Act (TCJA) of 2017, 100% Bonus Depreciation was introduced for qualifying assets placed in service between 2017 and 2022. This means that assets with useful lives of 20 years or less could be fully depreciated in the first year. The bonus depreciation rate began phasing down in 2023, with the rate decreasing 20% each year until it fully phases out by 2027 (unless extended by new Federal legislation).

How Do They Work Together?

When Criterium Engineers performs a Cost Segregation Study, we identify components of a property that qualify for shorter depreciation lives. These items are then eligible for Bonus Depreciation. For example: in 2024, investors can take advantage of 60% Bonus Depreciation. If $500,000 of a building’s components are eligible, the owner can deduct $300,000 immediately in the year the property is placed into service. This results in substantial upfront tax savings.

Why Does It Matter?

1. Improved Cash Flow: Larger depreciation deductions reduce taxable income, and more cash is made available for reinvestment or other purposes.
2. Maximizing Deductions: Taking advantage of Bonus Depreciation (when available) can lead to significant tax savings, especially for new property owners.
3. Flexibility: Cost Segregation studies can be performed on properties acquired or renovated in past years, allowing owners to recover previously unclaimed deductions.

For the year 2024, investors can take advantage of 60% Bonus Depreciation, with the rate decreasing each year until 2027. Because it is uncertain Bonus Depreciation will be renewed in the future, now is the time to contact us to conduct a Cost Segregation Study for your real estate investments. The opportunity to maximize these benefits is time-sensitive, so acting quickly can yield the most significant tax savings.

The Surfside collapse and the resulting loss of life is tragic. In addition to dealing with the far-reaching impact of that collapse, many occupants, owners, and managers of most buildings are now asking whether something similar could happen to their building. The answer is that the structural health and future of any building depends on many variables including age, climate, maintenance, structural materials used, renovations that have occurred, quality of construction, original design, and much more. No building will last forever.

The Surfside collapse has shined a bright light on building inspections, maintenance, reserve funding, and management. CAI task forces created in the wake of the condominium collapse—there were two that I served on including the Building Inspections Task Force and the Reserve Studies and Funding Task Force—will release public policy statements and best practice guidelines. Among the objectives for the CAI task forces efforts was to help guide public policy and legislative action toward reasonable and responsible standards since we should all expect widespread legislative action—no one wants a repeat of Surfside. (See side bar article on the Task Forces work on page 40.)

PLANNING FOR THE DEMANDS OF AN AGING BUILDING

In what I call Stage 2 aging, which takes into account the long-term deterioration of a building, when a building reaches 25 to 30 years old, there are more things to consider than those that are common to most reserve studies.

Many components such as roofs, paint, and HVAC equipment have predicable useful lives; their condition is visible, and they fall within the minimum 20-year (we use 30) study period recommended in the CAI Reserve Fund Guidelines. However, some expensive components such as underground piping and structural components (balconies, exposed framing, water intrusion related corrosion, or rot) have a longer expected useful life but will still need attention. What do you do about those conditions?

IDENTIFY AREAS OF CONCERN

First, the board should identify the areas of concern, then investigate, then plan for addressing the information revealed by the investigation; out of sight, out of mind does not mean those conditions can be ignored—aging and deterioration is inevitable.

For structures, deterioration is typically a slow process; severe weather events or seismic activity can accelerate the deterioration, but it still may take many years before a healthy building starts to show evidence of structural illness. In my opinion, all buildings of more than five stories should be thoroughly inspected by well-qualified individuals for structural soundness regularly: every 10 years for buildings less than 50 years old and every 5 years for buildings more than 50 years old.

CONDUCT STRUCTURAL INSPECTIONS

The structural health of most buildings must be determined by a structural engineer with the right combination of experience and expertise, and the qualifications to be accountable for their work. The presence of cracks in concrete, for example, does not mean much until you consider the location, pattern, size, and character of those cracks. Even structurally healthy buildings often have cracks. Age almost always matters, however, being young doesn’t mean that building is structurally sound. Every building is unique, and the structural inspection of that building should respond to that uniqueness. Age, location, and structural materials are big factors in guiding inspection priorities and procedures.

For inspection protocol, we recommend a two-phase approach:

• Phase one is a visual examination for evidence of significant structural distress, and then, depending on the results of phase one,
• proceed with phase two, a more in-depth investigation, possibly including destructive testing.

When possible, the original construction drawings would be reviewed as part of phase one.

INCLUDE FINDINGS IN RESERVE FUND STUDY

The structural inspection report (or other in-depth investigation such as elevators or video examination of underground piping) should then be provided to the Reserve Specialist who would include it in the Reserve Fund Study done for that building, including estimated costs. Reserve Studies should be done (or updated) at least every five years. Reserve Fund Studies are projections for repair or replacement of existing assets. They are a budgeting tool; they are not an in-depth building evaluation.

All of this means more work for the board or management company that should identify systems or components that deserve in-depth investigations and then retain appropriately qualified experts to conduct those investigations. Consultants familiar with buildings and building systems (such as some engineering companies and Reserve Specialists) can assist the board or management company with identifying the investigations that are needed. The resulting reports should be shared with the Reserve Specialist to include in the Reserve Fund Study to assure that the recommended reserve contributions include the results of those investigations. That may mean a significant increase in reserve contributions.

TAKING ACTION

Unfortunately, condo boards are often the roadblock in the process. They get important information from qualified professionals and don’t act on it. My personal experience includes many similar situations.

Why? When the studies and investigations reveal needed work that will require increased funding from the owners, that information may not get past the board to be shared with the owners, or, if it does reach the owners, it may get defeated by a vote of the owners. In some states, associations can even choose not to fund a reserve. CAI is aware of some state and federal legislation that is being considered to mandate structural inspections, assure adequate reserve funding, and mandate action to address the issues revealed.

Being a board member is tough! It involves fiduciary responsibility, accountability, and liability. It means answering to your constituents and it’s a “highly paid” volunteer position. A good management company will make good recommendations, but the board must make the decisions, and that may mean being unpopular with the owners, some of whom may be your friends and neighbors. I have been a president of an HOA board, so I understand the challenge.

Full disclosure and good communication are best. Our buildings are getting older, and we are being challenged to plan for that effectively. A better understanding of your building is the best place to start.

Article written by H. Alan Mooney, P.E., R.S., Criterium Engineers Founding President
Published in Condo Media October 2021 edition
Download a PDF version of this Condo Media Article

Addressing Building Issues With Caution

Have you ever noticed how fashion and entertainment trends seem to start on the “Left Coast” and work their way across the country before finally arriving in Maine? I call this the “End of Route 95 Syndrome.” Of course, YouTube and other digital social media has sped things up a bit, but the general premise holds true. The same may be true for residential/commercial construction codes and building science. This can make it difficult for condo boards to make an informed choice regarding building maintenance issues, not to mention prospective condo buyers assessing the condition of the unit and the community in general. Who do you call?

Maine Building Code Questions

It often takes a Surfside, FL, disaster for building codes and maintenance practices to change. Elevated deck and balcony structures must now be structurally inspected in California every five years following the horrific collapse of the raised deck on a multi-family building on the UC Berkeley campus in 2015. Exterior building façade failures in cities such as Chicago, Cleveland, New York, and Boston have resulted in those cities enacting mandatory structural evaluations of building exterior façades depending on the inspection cycle dictated in the ordinance and the height of the building.

I am often asked by out-of-state buyers of Maine condo units or condo boards of whether the building meets “code.” After a Maine history of a patchwork of building codes throughout the state, a Maine Unified Building Code and Unified Energy Code was adopted in 2015 following a suite of model international codes. As most buildings in Maine’s real estate inventory were built under a variety of building codes over the years, the question should be: “Does the building meet suitable standards of safety, health, resiliency, and energy efficiency while keeping to a reasonable maintenance schedule.” But who sets those standards, especially for existing buildings?

Licenses and Certifications

Maine does not license or certify its residential or commercial general contractors. Some of the skilled trades are licensed but not the general contractor who is ultimately responsible for the quality and safety of Maine’s homes. Legislative measures to license Maine’s contractors have been successfully defeated by various construction industry lobbying efforts in the recent past. Undoubtedly, someday, this situation will change, but Maine’s self-reliance traditions can be difficult to overcome.

Maine does not license or certify its home inspectors. This fact is often confusing for out-of-state buyers as the inspectors in their state are all licensed by the state. In addition, the home inspection brochures they pick up at a local Maine real estate office or web site have words such as “licensed” or “certified.” Under closer review it will be found the referred licenses are for radon or pest inspections, but not the home inspection itself. Maine does not have the “lemon laws” protecting home buyers in neighboring states, such as Massachusetts, with regard to undisclosed issues affecting the quality of a condominium. Maine’s real estate motto should be Caveat Emptor.

The term “certified” is even more misunderstood. The state certainly does not certify home inspectors, so a good question to ask is, “Certified by whom?” There are many home inspection associations across the country that “certifies” their dues paying members. They are not all equal. The joke in the industry is that in Maine one can be a hairdresser one week and a home inspector the next. The joke, of course, is that a hairdresser needs a license.

So, condo buyers in Maine, as well as condo boards, are typically advised to hire professional engineers (PE) or registered architects (RA or AIA) when they have concerns about structural integrity or other serious building science matters. Similarly, the Community Association Institute (CAI) recognizes the importance of professional competency in preparing reserve studies with the designation of “Reserve Specialist” (RS) for some members.

The greatest advantage of the board having a licensed engineer or architect is the condo board does not have to wait for an ordinance or new code to be approved to make an informed maintenance decisions for its community. A Maine board can utilize their engineer’s or architect’s experience and research done in other parts of the country to make informed maintenance decisions.

Taking Action

If a high-rise condo board thinks it is a good idea for its building façade or elevated balconies to be structurally evaluated every five years, the board does not have to wait for Maine to pass legislation. The board can budget for it in the association’s reserve study as a line item budget where replacement costs are allowed to include related expenses such as structural studies. This is also true for the evaluation of other major systems such as underground infrastructure, plumbing, or other long life common elements. The adage holds true for buildings too in that an ounce of prevention is worth a pound of cure.

Article written by Jack Carr, P.E., R.S., LEED-AP, Criterium Engineers
Published in Condo Media October 2021 edition
Download a PDF Version of this Condo Media article

Reserve Study Guidelines

Are you aware of the significant changes in the Community Association Institute (CAI)’s recommendations for best practices in future reserve fund studies? If you are not, you are not alone. In July 2023, the Foundation for Community Association Research published its Best Practices – Community Association Maintenance manual. Let me explain why this 68- page ‘Maintenance’ manual should be a must read for every condominium or HOA board member. It is available in printed form and the no cost digital version can be downloaded from CAI’s website.

Most reserve fund studies in the recent past have used CAI’s Best Practices – Reserve Studies / Management manual published in 2007 as a guideline on how to perform a quality reserve fund study. Though this guideline is still relevant, things have changed with the new 2023 ‘Maintenance’ manual. No longer is a reserve fund study’s primary focus budgetary but rather future reserve fund studies should expand to incorporate both safety and preventive maintenance needs. As CAI states, CAI “…recognized need for greater clarity in the role of maintenance planning and programming in communities”.

Following the June 2021 tragedy in Surfside, Florida with the collapse of Champlain Towers South and the loss of 98 occupants, CAI commissioned a special committee of reserve fund experts contributing to the Condominium Safety Public Policy Report (October 2021). Among other points of emphasis was condo boards’ life-safety responsibilities and duties of loyalty and care. The special committee’s ‘Maintenance’ manual further recommends expanding typical reserve components to include preventative maintenance in future reserve fund planning as well as infrastructure inspections when warranted.

This is a departure from prior reserve fund guidelines where preventive maintenance and infrastructure inspections were not included or funded as reserve component line items. It is now recommended the judgement of the reserve study provider determines the inclusion of these types of component items when based on a degree of engineering certainty. It is further suggested the community’s historical pattern of maintenance expenses should be considered in determining if any of these expenses should be included in the reserve budget. Other historical reviews should include any work performed on the reserve components since the prior study was performed. In fact, all available service provider reports and information regarding the physical components should be reviewed.

What’s Included

While reserve studies will now reflect the board’s life-safety responsibilities, reserve studies will continue to evaluate information regarding the physical status and repair/ replacement cost of the association’s major common area components using component inventory, a condition assessment, and valuation estimates. Some of the new ‘Maintenance’ manual’s recommendations are subtle while others are not, such as decreasing the recommended period of site inspections from five to every three years.

Another significant recommendation is components are not restricted to physical items. This could include professional inspections, evaluations, or related building services when additional expert advice is needed, and an asset’s deterioration is in question. Therefore, common area preventive or corrective maintenance projects qualify as reserve components if they otherwise meet the definition of ‘component’. Thus, a reserve component is not required to be a cyclical replacement. Now a periodic structural inspection could be reserve component.

In the past component replacement was estimated as a ‘like kind’ of component. It is now recommended consideration should be given to logical upgrades to an existing asset or system now viewed as obsolete or inefficient in meeting the needs of the association. Judgement on these upgrades can be based on ongoing preventive maintenance costs and an evaluation of energy costs using higher efficiency equipment. Selection of components and their estimated useful life and remaining useful life may consider energy usage and ongoing maintenance costs with the resulting impact on total budgetary expenses and total life cycle costs.

Long-life components (i.e., > 30 years) have long been a subject of debate on their presentation in reserve studies. Often boards ignored long-life infrastructure components, hidden electrical and mechanical systems and their associated replacement costs. In effect, if the component’s replacement did not occur within the reserve study’s 30-year window, the study ignored future funding needs and kicked the can down the road for a future board to address. The new ‘Maintenance’ manual recommends long-life components should not be ignored but made visible in the study. Methodologies for reporting long-term projects include:

• Inclusion of long-life components with funding in the study.
• Addition of long-life components with funding at the time when they fall within the 30-year period from the date of study preparation.
• Identification of long-life components in the component inventory, even when they are not yet being funded in the 30-year funding plan.

Despite this new emphasis on preventive maintenance, it should always be remembered a reserve fund study is not a preventive maintenance plan, and a preventive maintenance plan is recommended for all associations. A quality reserve fund study is a path to avoid deferred maintenance; special assessments; lower property values; and liability exposure for all. This is a plan to meet the board’s primary mandate to ‘Maintain, Protect and Enhance.’

Written by Jack Carr, P.E., R.S., LEED-AP, Senior Consultant Criterium Engineers
Published in Condo Media

Q: Over the past few months, I’ve heard a lot of discussion about reserve studies and condition surveys. Are these the same, and, if not, how do they differ, and why and when should our association obtain one?

A: This is a great question because it is not asked often enough. I cannot count the number of times I have responded to a condominium board’s request for a meeting to discuss their stated need for a reserve fund study only to find they actually needed something else. That something else could encompass a wide range of engineering services such as a full structural evaluation; a water infiltration study; and/or a plumbing or electrical system update.

Condo and HOA boards have a lot on their agenda for their periodic meetings. Issues regarding landscaping, by-law enforcement, assessment collections to name a few, so the need to spend money to update their last reserve study is not a popular item. Even though the Community Associations Institute (CAI) and the association’s property manager may recommend a reserve budget update every three to five years, the board members are not eager to look at the calendar.

In fact, most discussions about updating the reserve budget arises from some perceived maintenance problem and not the calendar. Perhaps it is the rise in complaints in water stained ceilings from leaking roofs, or poor curb appeal of the aging building facades, or the developing potholes in the roadways that create the agenda item requiring capital repairs and the analysis of the reserve budget.

With the guidance of an experienced property manager or knowledgeable committee member, the board will recognize the benefit of hiring a professional engineer (PE) and reserve specialist (RS).  These professionals provide the most complete review of the facility’s common elements and will develop a reserve budget reflecting the future scope of repairs and associated cost estimates. With this understanding the board can prepare a Request for Proposal (RFP) and conduct interviews to hire a qualified firm—from there, things can start going wrong.

Common Misunderstanding

They go wrong because of miscommunication due to the lack of understanding of the industry’s language and terminology. Let us assume the condo’s primary concern is structural problems given the recent attention of the Surfside, Florida disaster. The communication problem starts with the engineer’s RFP interview during which the interviewee remarks to the board that one of the advantages of hiring an engineering firm to perform a reserve study is their structural engineers can comment on the potential structural distress issues found during the inspection of the building(s). This can be a point of communication disconnect and the beginning of unfulfilled client expectations.

In the engineer’s mind, he thought he was clear in telling the board his review of the structural elements would produce a report listing the structural problems found and the engineer’s recommendations of actions to be taken. What the members of the board may have heard was for the price of the reserve fund study they would receive an engineer’s structural evaluation of the condition of their facility with an estimate of repair costs to budget for their reserves and for a contractor.

A basic reserve study focuses on estimated remaining useful lives of existing common elements. When structural problems are known before or found during a reserve study, a condition study or assessment is needed to determine the soundness of the facility. This scope of work can be added to the reserve fund study or provided as a separate task. This study may call for inspection, material testing, engineering calculations, and more that are outside the scope of a reserve study. To avoid this, better questions and answers are needed on all sides of the issue.

Article written by Jack Carr, P.E., R.S., LEED-AP, Criterium Engineers
Published in Condo Media December 2021 edition
Download a PDF Version of this Condo Media article

Fear, Uncertainty, and Doubt

Condo association unit owners’ meetings can be a challenge. Boards often need to make hard decisions. People can become very emotional when it comes to issues affecting their money and they feel a lack of control. From what I hear the New England meetings I attend are mild compared to the ones seen on You Tube or those described by our Florida associates where the guards wear Kevlar vests.

When Alan Mooney, PE, RS, and I were invited years ago to be speakers at Community Association Institute’s (CAI) National Conference held in New Orleans, we decided rather than plow through a tedious power point speech; we would use the case method style format. Our presentation would show how tough issues should be managed in condominium meetings by using actual events to illustrate the points we wanted to cover. The following are some of the highlights of two of these case studies.

In “Get the FUD off the Table” we discussed the methods of dealing with the classic condo curmudgeon who tries to disrupt every meeting with negativism and other disruptive tactics to postpone or avoid any decision that may create change or spend money. I refer to this as throwing FUD on the table. FUD as in Fear, Uncertainty, and Doubt.

Of course, the best method of controlling this type of behavior is to not lose control of the meeting. This requires discipline and training. They do not teach effective condo board management in school. It is often a learn-on-the-job type of education. I have always admired CAI’s role in training both board members and property managers in the art of meetings. Condos are not businesses, but they should be run in a business-like manner.

In This Together

The first step in meeting control is to maintain a system of consistent rules and policies. Having a prepared agenda is key to setting the tone of a meeting. It establishes a chart to navigate through the presentation of issues, orderly discussions, and framework for the decision process. Educating meeting attendees on how motions are made and seconded, time limits on discussions, and voting rules goes a long way in creating an environment for a successful meeting. A written policy statement handed out to all attendees is helpful as people have a tough time arguing with a piece of paper rather than a real person.

A wise board will be open to innovative ideas from all sources but will have the means to control the condo commando who wants to take over the session. Boards often set up Homeowner Forums of ½ to 1 hour at the front or end of a meeting with strict time limits for each speaker. A well-prepared board will have the facts and answers that will sweep the FUD off the table.

The second case study was called “Don’t Hang Out Your Dirty Laundry”. Associations often must face difficult problems and make hard decisions. Perhaps it has just been determined that all the exterior siding or roofs must be resurfaced. Or the plumber just advised the board that all the heat system piping in a 12-story high-rise must be replaced. When the initial sticker shock hits and the specter of a hefty special assessment soon is realized, unit owners begin to panic.

It is at this time firm leadership needs to step up and remind everyone they are all in it together and whether they know their neighbor or not they are all in a sense a family and as a family they must keep their family business within the family. This means one does not tell the hairdresser about the roof leaking, or the butcher about the siding falling off, or even the brother-in-law about the pipe failure. This is critical because when the hairdresser passes the rumor on no one in the association would recognize the story by the third iteration.

Today’s real estate world is much more in tune with condos in distress from either recent foreclosures or underfunded reserve funds. Disclosures should be made in an orderly way with a timely reserve funding plan in place.

These problems are not solved by hanging out the laundry but rather recognizing the problem and establishing a plan to fix it. A plan of action must be in place to allow the community of unit owners to feel confident their equity will be protected and by joining together their goals will be met.

Though these two cases have different stories they have a consistent theme. When the FUD hits the fan…run at the fan. A successful association will have a board prepared to deal with a difficult future and the rules to guide and the sense to follow.

Written by Jack Carr, P.E., R.S., LEED-AP, Senior Consultant Criterium Engineers
Published in Condo Media