PAVING ISN’T SEXY: BUT PROPER PAVING MAINTENANCE IS ESSENTIAL

When was the last time you thought about your parking lot? The honest answer, probably, is not in recent memory.  It’s not a question of ‘out of sight –out of mind.’ Parking lots and other paved areas are highly visible, but they aren’t all that interesting.  There is nothing sexy about asphalt but paving maintenance is very important.

A well-designed, nicely manicured landscape will get your attention; a nicely-paved parking lot – not so much.  As a result, paved areas don’t always get the maintenance attention they need, and that is a potentially serious problem for both the owners of commercial properties (shopping malls, for example) and the homeowner associations that manage residential condominium communities.  A poorly maintained parking lot is not only an eyesore, detracting from a property’s curb appeal; it is also a liability risk:  Customers or residents who trip over cracks or whose cars are damaged by potholes are going to sue the property owner.

Paved areas, if well-constructed and well-maintained, can last between 25 and 30 years or more, depending on where they are located and how they are used.  Unfortunately, parking lots, sidewalks and driveways are often afterthoughts — the final items on a construction checklist, undertaken near the end of the project when funds are low and the developer’s attention is waning.

Doing Paving Maintenance Right

Pavement isn’t complicated.  It begins with good soil compacted properly to create a stable base that should be covered by two layers of asphalt ― a base course on bottom and a wearing course on top. There is some disagreement about the desired thickness, but no question that the thicker the asphalt layers, the longer their life.  The industry standard calls for a combined thickness of between 2.5 and 5 inches, with the top layer thicker than the bottom.

Only about half of the parking lots we inspect meet that standard.  Most fall short and many fall well short, with both layers sometimes totaling less than 2 inches.  If the asphalt layers are too thin, if the underlying soil is poor, or if the area isn’t paved uniformly the surface will form holes, crack and split, requiring constant repairs and premature repaving.

Harsh winters and the damage inflicted by the steel blades of snow plows take a toll in New England and other cold climates; extreme heat and exposure to the blazing sun do the damage in the south and southwest.  Pavement in hotter areas may require the application of a sealant (to smooth over holes and cracks) in less than a year after being laid; pavement in colder climates may not need sealant for five years, and possibly not all, but it will benefit from efforts to mitigate the damage inflicted by snow and ice.

You can’t skip the snow plowing or the application of de-icing materials, but some of those materials are harder on asphalt than others. It’s worth asking your snow removal contractor for recommendations.  Proper application of the material is also essential; adding more salt won’t necessarily improve its effectiveness, experts say, but it will increase the cumulative damage to paved areas and reduce their useful life.

Poor drainage can also accelerate deterioration. Even the best-laid surface will be compromised over time if water “ponds” on it instead of draining properly. You can spot evidence of ponding even if it isn’t raining. Areas of discoloration (shadows) and collections of dirt, twigs and other debris are red flags indicating a drainage problem.  A decent slope and catch basins, on the other hand, suggest that the contractor was thinking about proper drainage

Paving Maintenance Guidelines

All pavement, however well or poorly-constructed, requires proper care. Paving maintenance schedules will vary ─ some paved areas will require attention sooner or later than others — but the protocols will be essentially the same.

A few small cracks here and there will be the first sign of wear. They will usually appear between the three- and five-year marks, and filling them will be the first line of defense. The important thing about cracks is, small ones will quickly become larger, so you don’t want to ignore them. They represent both a safety hazard (people can twist their ankles or trip over them) and a structural concern. Water can seep through the cracks causing damage below the surface of the asphalt. In warm climates, the water will unsettle the soil, pushing the clay up against the asphalt and accelerating the deterioration process. In New England, water will trigger a destructive freeze-thaw-freeze process in the winter, which will also shorten the asphalt’s useful life.

You can deal with small cracks by filling them in. Contractors typically use a melt-in substance that won’t shrink after application. This is the product highway crews use because of its durability and ease of application. It is sold under several retail brand names, all variants of “hot-applied crack sealant.” Experts suggest that you fill cracks every two or three years, as part of a regular maintenance plan. If cracking becomes more widespread, you can take the next step, which is to apply a sealant to the entire paved area.

Resurfacing and Replacing

As asphalt ages, one or more sections may begin to break up or flake, indicating that the surface is beginning to deteriorate. Patching will probably take care of the problem, at least for a while. But you don’t want to just pave over the failed area ― a shortcut some contractors might suggest; you want the contractor to cut out the area, fill in the subsurface and then pave over that. This will give you a sturdier, longer-lasting repair, but it is still a temporary fix ─ a band aid, not a cure.

At some point — and the hope is it will be later rather than sooner in your pavement’s life ― deterioration will accelerate, repairs will become more frequent requiring more aggressive and more expensive responses.

One option is to resurface the area ─ either lay a new surface over the existing one, or remove the old asphalt and pave the area anew. These options make sense if the underlying soil base is stable. But remember Einstein’s definition of insanity (doing the same thing repeatedly and expecting a different result). If the old surface failed prematurely because the underlying soil wasn’t’ stable, a new surface laid over that unstable soil won’t wear or fare any better.

It’s time to start over. The contractor should remove the old asphalt, scoop out the bad soil, replace it with gravel and stone to create a solid base, and then lay the new pavement over it. That’s the traditional approach. A newer technique calls for pulverizing the old asphalt and using it as a base for the new pavement. In addition to creating what contractors say is a “super-solid” base, pulverizing the old asphalt eliminates the cost of trucking it away and disposing of it at a hazardous waste site. Either technique will give you nice, new pavement that will last another 25 or 30 years or more.

The Engineering Advisor is intended to enhance your knowledge of technical issues relating to buildings.  For additional information on any subject, please feel free to call us.  Our commitment is to provide you with timely, accurate information.

Determining how long a building component will last before it requires repair or replacement is one of the primary tasks in performing a Property Condition Assessment (PCA). Other professions rely on existing tables to render such opinions. For the engineer, the assessment is much more subjective.

The terms Useful Life (UL), Estimated Useful Life (EUL), and Remaining Useful Life (RUL) are commonly used in business. In the appraisal world, the term Useful Life is defined as the economic period during which a positive cash flow is expected for the improvements. For accountants and tax advisors, the term means the period to depreciate the asset.

Generally, the Useful Life of most assets is defined by statute. Many states publish lists of depreciable assets including personal property, land, buildings, and infrastructure. The National Association of State Comptrollers has even published a survey of Useful Life ranges by state.

There is varying specificity as well as varying values among the states. However, the practitioner, whether he or she is an accountant or appraiser, does not have much leeway in making the determination. As we will see, in engineering, the definition may not be as clear-cut.

ASTM Definitions for a PCA

ASTM E-2018-01, the Standard Guide for Property Condition Assessments (PCA), defines the terms as follows:

Expected Useful Life (EUL) – The average amount of time in years that an item, component, or system is estimated to function when installed new and assuming routine maintenance is practiced.

Remaining Useful Life (RUL) – A subjective estimate based on observations, or average estimates of similar items, components, or systems, or a combination thereof, of the number of remaining years that an item, component or system is estimated to be able to function in accordance with its intended purpose before warranting replacement. Such period of time is affected by the initial quality of an item, component or system, the quality of initial installation, the quality and amount of preventive maintenance exercised, climatic conditions, extent of use, etc.

These values are used to calculate estimated capital expenditures and reserve requirements for properties while performing a PCA.

Engineering References

Engineers may use certain published guidelines as a place to start when determining the EUL. The American Society of Heating, Refrigeration, and Air-conditioning Engineers(ASHRAE) has long published a listing of the life expectancy for most HVAC components. Examples of the more common components are as follows:

In the 1990s, Fannie Mae, in its Guidance to the Property Evaluator, published a more comprehensive reference list of building “items, components, or systems.” These are primarily for residential applications, however. Marshall & Swift provides similar values for commercial applications, subdivided by the quality of the component. Selected examples of the Fannie Mae data are offered below.

The key point is that these are only reference points. They do not account for all the variables listed in the ASTM standard. Therefore, the judgment of the engineer is a critical part of the process. The engineer evaluates how these components are actually used and adjusts the Remaining Useful Life based on that evaluation. The difference can be dramatic and may have a significant effect on the viability of the financing or acquisition.

Cost Segregation Studies a Hybrid Application

In recent years, the line between engineering and accounting and appraisal has blurred slightly by the addition of several new services. Cost Segregation Studies seek to “segregate” the costs attributed to the non-permanent building systems from the building itself so that they can be placed on a more aggressive depreciation schedule. In doing so, the owner is able to recover more cash in the early stages of building ownership that can best be put to use elsewhere. This process combines the estimating skills of the engineer with the tax skills of the accountant. Building components are placed in different categories (5-year, 7-year, 15-year) for depreciation purposes. There is little room for interpretation here but the IRS requires engineering expertise to accurately reflect cost.

Building Life Even More Subjective

Recently, we have been asked to provide estimates of the Remaining Useful Life of whole buildings. This need is most often occasioned by the net lease marketplace wherein, as a condition of the lease, the lessor seeks to ensure that the building will last longer than the term of the lease. Marshall & Swift publishes a guide, used mostly by appraisers, that provides estimates of building useful life based on building type and quality. According to the guide, few buildings have a Useful Life greater than 50 years although we all know of buildings that are 100, 200 or older. The engineer, in this case, must determine if and why the Useful Life would be longer than the published data. He uses current condition, use, and maintenance operations to make that determination. An important point, however, is that this determination is not an economic one. Buildings may be put to different uses over their lifetimes, and the current use may not be the most economical or appropriate use in the future.

What’s the Answer?

So how long will it last? The answer is: it depends. The experience and judgment of the engineer are critical factors in coming up with a reasonable answer to this very important question.

The Engineering Advisor is intended to enhance your knowledge of technical issues relating to buildings.  For additional information on any subject, please feel free to call us.  Our commitment is to provide you with timely, accurate information.

You can learn more about our Property Condition Assessment (PCA) services.

“Assessment increases and stronger reserve funds will be needed to repair aging properties” was the number one prediction of experts surveyed by Common Ground, the magazine of the Community Associations Institute.

The most important element of credible reserve studies is valid component data.

Recent legislation in several states also emphasizes properly funded reserves and cites reserve studies as a necessary procedure in estimating funding requirements.

Capital Reserves are for projected repairs and replacements. Items such as regular periodic (non-annual) repairs (e.g., painting), irregular periodic repairs (e.g., deck surfacing), foreseeable failure, catastrophic failure, and outdated design/aesthetics may be included in a Capital Reserve budget.

Scope of Services

The standard, or full reserve study consists of five elements. The Component Inventory is the task of selecting and quantifying Reserve Components. Condition Assessment is the task of evaluating the current condition of the components. Life and Valuation Estimating establishes the Useful Life, Remaining Useful Life, and Repair or Replacement Cost estimates for the Reserve Components. Fund Status is determined by projecting the current and future funding of the Capital Reserve Account against current and future repair and maintenance requirements. The Funding Plan is intended to create options for achieving the desired funding levels to offset anticipated expenditures.

It is critical at the outset of any project to clearly define the scope of services. Annual maintenance items are typically excluded from a reserve study. The minimum scope of service may also be defined by statutory regulation.

Standards of Reserve Studies

In 1998, the Community Associations Institute adopted National Reserve Study Standards. The standards define three levels of service (a full reserve study as defined above, an update, and an update without an on-site visit), definitions of various terms, and the contents of the report. The standards also create the professional designation Reserve Specialist. The designation is awarded by CAI to individuals with the appropriate background, experience, and references, following a review of their work by the Reserve Specialist Designation Board.

State Legislation

Prompted by foreclosures and mismanaged properties, a number of states have already passed legislation governing the management of Common Interest Realty Associations (CIRAs). Among those that have passed legislation are Alaska, California, Florida, Hawaii, Illinois, Indiana, Massachusetts, Michigan, Minnesota, Oregon, Texas, and the District of Columbia. Some states address reserve studies broadly. Others are more specific.

For example, the California Davis-Stirling Common Interest Development Act states in part: At least once every three years the board of directors shall cause a study of the reserve account requirements of the common interest development to be conducted if the current replacement value of the major components which the association is obliged to repair, restore, replace or maintain is equal to or greater than one-half of the gross budget of the association for any fiscal year.

Florida statutes are even more specific. These accounts shall include, but are not limited to, roof replacement, building painting, and pavement resurfacing, regardless of the amount of deferred maintenance expense or replacement cost, and for any other item for which the deferred maintenance expense or replacement cost exceeds $10,000. The amount to be reserved shall be computed by means of a formula which is based upon estimated life and estimated replacement cost or deferred maintenance expense of each reserve item.

How to Select a Reserve Study Consultant

The most important element of a credible reserve study is valid component data. Inaccurate cost information, improper assessment of the condition of each component, and failure to examine ways of maintaining components to prolong their useful life can lead to underfunding or, almost as problematic, overfunding of the reserve account.

Reserve studies are a professional opinion. The value of that opinion is directly related to the knowledge and expertise of the person rendering it. Always ask the consultant for references and a statement of experience and qualifications. Even this may not tell the whole story, however. Here are some other factors to consider.

• Is the consultant locally based? Materials and their performance will vary according to regional preference and climate.
• Does the consultant thoroughly understand building systems? Databases work only for typical systems and components, not actual ones.
• Does the consultant have the ability to diagnose problems, design repairs, and oversee construction? A reserve study also includes an evaluation of defective components and systems in need of immediate repair.
• Will the consultant be available for questions and follow up? Often, there is a need to explain the findings to the board or individual members.
• Does the financial model have credibility? The model and format should be prepared by someone with an accounting background and comply with the guidelines of the American Institute of Certified Public Accountants.

The Engineering Advisor is intended to enhance your knowledge of technical issues relating to buildings. For additional information on any subject, please feel free to call us. Our commitment is to provide you with timely, accurate information.

Contact us to discuss learn more about our HOA Reserve Study services.

“Water, water everywhere” is not what you want to be thinking as you’re staring through the windows of the restaurant, drug store and appliance shop that are tenants in the building you own.  Water inside a building means likely damage to the furnishings and fixtures, floors and walls inside; it also means the possibility of rotting wood and mold risks; and it means major liability risks.

“Water intrusion,” which is how engineers define the problem, can have many causes, but the most common is construction flaws in a building’s envelope – the vertical surfaces running between the foundation and the roof that separate the interior from the exterior.

The envelope should be water-tight, for obvious reasons; unfortunately, we find that is not the case in many of the commercial buildings we analyze.  For purposes of this discussion, we are not talking about “trophy buildings” – the towering skyscrapers that define an urban landscape.  We’re talking about the small strip malls with a handful of stores that are ubiquitous in the suburbs.  The buildings are low-rise – typically only one-story—and they are usually managed by their owners or by small property management companies, which may in itself increase their vulnerability to water intrusion problems.

Compared with a corporate owner or a management company overseeing multiple large-scale properties, individuals who own and manage small strip malls are likely to be excessively cost-conscious (which sometimes means “penny-wise and pound-foolish”), and inclined to push building components, like the roof, to the end of their life expectancy, patching rather than replacing them when problems appear.

An older roof, oft-repaired, is more likely to leak than a newer one (that is well installed, not all are) or one that has been consistently well-maintained.  Leaks in a well-maintained roof will usually be relatively small and isolated; leaks in a neglected roof are likely to be larger, more widespread, and more damaging as a result.

The flat roofs common in commercial buildings are also more prone to leaks than slanted ones. And small commercial properties are particularly vulnerable to roof damage caused by third parties.  Commercial tenants are usually responsible for building out their spaces.  A mall with eight spaces could have eight different tenants with eight different contractors, all dispatching different workers to install or connect equipment on the roof. The more people traipsing around a roof, the more opportunities for someone to drop a tool, dig a heel, fail to seal an opening, or otherwise damage or weaken the surface in ways that aren’t likely to be discovered until the roof starts to leak.

When we are looking for the source of water intrusion, a damaged or neglected roof is always a prime suspect, but by no means the only one. Architectural features also rank high on the suspect list. Consider the glass storefronts and glass curtain walls that are standard in strip malls.  Poorly installed windows are a leading source of water intrusion in residential buildings.  The problem is magnified in malls, because they have a lot more glass that requires a lot more maintenance to keep the installations water-tight.

Malls don’t have balconies – another intrusion point in residential structures.  But they do have loading docks that are not always treated tenderly by the truck drivers who back into them.  Cracks in the docks can funnel water into the building.

The building’s siding can also be problematic.  Experts will debate endlessly the relative advantages of different siding products, and there is no question that some are better than
others.   But if water is seeping into the building, we find it is most often the quality of the installation, not the quality of the product that is at fault.

For example, Exterior Installation Finish Systems (EIFS) are now widely used in commercial structures.  Comprised of a synthetic material that resembles stucco, the finish looks smart and works well – if installed properly.  But if the insulation is inadequate or if transitions aren’t sealed properly, the surface won’t be water-tight.

One of the most common installation mistakes is the incorrect layering of building envelope materials. When this occurs, instead of being shed efficiently from one material to another, water accumulates behind the materials and penetrates the structure.

Design features intended to increase the visual appeal of a building can also increase its water intrusion risks.  Varying the materials, using different shapes and inserting angles all add architectural interest.  But if the different materials used are incompatible, the resulting temperature variations can cause sealants to fail.  And every angle you create, every transition you make from one shape or material to another, creates a point at which water may intrude.  Transition or termination points represent a tiny portion of a building’s envelope, but they account for much of its vulnerability, and they don’t always receive the water-proofing attention they need.

There are no perfect buildings.  Water intrusion is a potential risk for all.  But owners of commercial buildings can reduce their risks by being mindful, diligent and proactive. Here are a few suggestions:

• Don’t ignore early signs of water intrusion.  If you see water stains on ceilings or walls, don’t ignore them. The sooner you identify the source of water intrusion problems, the more controllable they will be.
• Bring in experts to investigate.  They can provide the objective analysis you need and they can be held accountable for their findings.   Often, properly performed water tests are necessary to definitively diagnose water intrusion.
• Take care of preventive maintenance.  This includes more than painting or power washing the exterior.  Replace (and, if necessary, upgrade) the sealants around the perimeter of windows and curtain walls.  This is your best defense against water intrusion in those areas.  Good sealants last a long time, but they don’t last forever.   Experts suggest re-sealing every 5 years on average – less frequently in some parts of the country, more frequently in others, depending on the climate.  Preventive maintenance should also include an annual roof inspection performed by an expert.   Make necessary repairs when they are indicated and make sensible decisions about when it is most cost-effective to replace the roof rather than to continue patching it.
• Consider flooding risks.  Although most water penetration risks are centered on the building envelope, ground level flooding may also be a concern for small commercial properties, because they are often built on less than optimal flat sites with less than optimal drainage systems.  A heavy rain that floods the parking lot could flood the building as well.  A civil engineer can help you asses the flood risks for your property and recommend any mitigation measures you should implement.
• Don’t look for short-cuts.  There are no Band-Aids for water intrusion.  If transitions on the building’s surface weren’t set properly, you have to re-do them. If the siding wasn’t installed properly, you may have to replace it.  If the roof is failing, you‘ll have to replace it, too.  These measures are going to be expensive. But preventing water intrusion will be far less costly than repairing the damage it can do to your buildings, to the property and health of your tenants, and to your finances.

The Engineering Advisor is intended to enhance your knowledge of technical issues relating to buildings.  For additional information on any subject, please feel free to call us.  Our commitment is to provide you with timely, accurate information.