Best Practices Community Association Maintenance PDF

B E S T P R AC T I C E S Community Association Maintenance A regularly applied maintenance plan and program combined with a properly prepared and funded reserve study can lead to safe, desirable, financially secure community associations. This report highlights:...

B E S T P R AC T I C E S Community Association Maintenance A regularly applied maintenance plan and program combined with a properly prepared and funded reserve study can lead to safe, desirable, financially secure community associations. This report highlights: Building Maintenance Programs Roles & Responsibilities of the Developer and Homeowners The Intersection of Reserve Studies and Maintenance Sample Maintenance Checklists THANK YOU TO OUR SPONSORS BEST PR ACTICES Community Association Maintenance A regularly applied maintenance plan and program combined with a properly prepared and funded reserve study can lead to safe, desirable, financially secure community associations. This report highlights: Building Maintenance Programs Roles & Responsibilities of the Developer and Homeowners The Intersection of Reserve Studies and Maintenance Sample Maintenance Checklists SUPPORT NEW RESE ARCH. Make a t a x-deduc tible d o n a t i o n t o d a y.  ACKNOWLEDGMENTS The Foundation for Community Association Research is indebted to the task force members who developed this material: J. David Rauch, ProTec Building Services, San Diego Steven Brumfield, cmca, ams, pcam, Toll Brothers, Inc., Fort Washington, Pa. Mitchell Frumkin, pe, rs, Kipcon, Inc., North Brunswick, N.J. Jon Epsten, esq., a CCAL fellow, Epsten, APC, San Diego Gary Porter, rs, Facilities Advisors International LLC, North Las Vegas, Nev. Research Committee Chair Mark Jones, pcam, Avalon Management Group, Inc., Canyon Lake, Calif. Foundation President, 2022-2023 Adrian Adams, esq., a CCAL fellow, Adams | Stirling PLC, Los Angeles Foundation Staff Dawn M. Bauman, cae, Executive Director Jake Gold, cae, Director Community Associations Institute Staff Thomas M. Skiba, cae, Chief Executive Officer Daniel Brannigan, Senior Director of Publishing Joni Lucas, Editor Cori Canady, Creative Director Design Mark Mavilia ©Copyright 2023. Foundation for Community Association Research 6402 Arlington Blvd., Suite 500 Falls Church, VA 22042 ISBN 978-1-59618-043-7 Use Permission Readers are encouraged to print and reproduce this Best Practices Report for use by community association managers, board members, individual homeowners, and community association-related industry professionals without permission of Foundation for Community Association Research provided the following terms are met: This document must be reproduced in its entirety including the use permission statement; this document may not be added to, modified, amended, or otherwise altered from the original as presented here. Readers and users agree not to sell copies of this document or otherwise seek compensation for its distribution. Disclaimer: This document is designed to provide accurate and authoritative information regarding the subject matter covered. It is provided with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional services. If legal or expert advice is required, the services of a competent pro- fessional should be sought. The Foundation for Community Association Research is dedicated to conducting research and acting as a clear- inghouse for information on innovations and best practices in community association creation and management. As part of the Best Practices project, operations related to various functional areas of community associations— community harmony and spirit; community security; energy efficiency; ethics; financial operations; governance; green communities; maintenance; natural disasters; reserve studies/management; strategic planning; and transi- tion from developer control—have been developed since 2001. 2 FOUNDATION.CAIONLINE.ORG  COMMUNITY ASSOCIATION MAINTENANCE W H AT A R E B E S T P R A C T I C E S ? The Foundation for Community Association Research is proud to offer function-specific Best Practices Reports in the community association industry. The Foundation has developed best practices in select topic areas using a variety of sources, including, but not limited to, recommendations from industry experts and various industry-related publications. The outcomes of the Best Practices project include: Documented criteria for function-specific best practices. Case studies of community associations that have demonstrated success. The development of a showcase on community excellence. The benefits of benchmarking and best practices include: improving quality; setting high perfor- mance targets; helping to overcome the disbelief that stretched goals are possible; strengthening cost positions; developing innovative approaches to operating and managing practices; accelerating culture change by making an organization look outward rather than inward; and bringing account- ability to the organization because it is an ongoing process for measuring performance and ensuring improvement relative to the leaders in the field. The Foundation’s entire catalog of Best Practices Reports is available at foundation.caionline.org as free downloads. Some printed versions are for sale at cost in Community Associations Institute’s bookstore at www.caionline.org/shop. FOUNDATION.CAIONLINE.ORG 3 COMMUNITY ASSOCIATION MAINTENANCE CONTENTS Introduction to Maintenance..........................................................................................................5 Definition and Types of Maintenance.............................................................................................7 Community Maintenance Plans.......................................................................................................9 Building Maintenance Programs...................................................................................................16 Inspections First...........................................................................................................................22 Roles and Responsibilities: Maintenance for Developing Community Associations.....................25 Community Transition Issues Affecting Maintenance...................................................................29 Reserve Studies and Maintenance: The Intersection....................................................................31 Financial Impact of Maintenance Plans.......................................................................................32 The Legal Obligations..................................................................................................................37 Hiring Contractors.......................................................................................................................41 Appendix......................................................................................................................................50 Maintenance Cost Savings........................................................................................................... 51 Sample Inspection Checklists...................................................................................................... 52 Sample Operation and Maintenance Manuals............................................................................. 62 Additional Resources....................................................................................................................66 4 FOUNDATION.CAIONLINE.ORG  COMMUNITY ASSOCIATION MAINTENANCE INTRODUCTION TO MAINTENANCE The primary purpose of this Foundation for Community Association Research Best Practices Report is to outline the importance of regularly applied maintenance plan and program for community association board members, community managers, and service providers. It is imperative that board members not only understand their essential obligation to maintain their communities but to also have the education, resources, and tools necessary to succeed. Without maintenance, your community will begin a process of degradation until each building and common area ultimately deteriorates and eventually becomes uninhabitable. The key to fighting this process of building and common area degradation is to apply maintenance in a thoughtful and planned manner which would result in a safe, healthy, fully functioning community where property values are maintained or even increased year to year. The planned application of maintenance through an ongoing maintenance program is the best way for a community association board to achieve its mandate to maintain, protect, and enhance their community. The idea for this Best Practice Report on maintenance arose from the work of many industry experts who helped create Community Association Institute’s (CAI’s) Condominium Safety Public Policy Report in October 2021. The report was a proactive response to the Champlain Towers South collapse and tragic death of 98 people in June 2021 in Surfside, Fla. During task force meetings for the development of the report, CAI smartly recognized that greater clarity was required about the role of maintenance planning and programming in communities around the world. The Foundation assembled a dynamic team of professionals from across the country to write this Best Practices Report. The team includes a national developer of new communities. It also includes two authoritative Reserve Analysts (both of whom are past CAI past presidents), one with a specialty in structural inspections and the other with a specialty in capital budgets. The final team members include an attorney and a fellow in CAI’s College of Community Association Lawyers (CCAL) who has been practicing community association law for almost 40 years as well as a licensed maintenance con- tractor and consultant who has worked in the industry for over 30 years. Before we look at the maintenance of buildings and common areas, let’s first look at maintenance from a broad perspective. Everything from our bodies to our cars and our homes are constantly tend- ing toward disintegration over time—a movement often called entropy. To avoid buildings from breaking down, we must apply a countervailing energy called mainte- nance—the work of keeping something in proper condition, care, or upkeep including taking steps to avoid something breaking down (preventive maintenance) and bringing something back to working order (corrective maintenance). FOUNDATION.CAIONLINE.ORG 5 COMMUNITY ASSOCIATION MAINTENANCE We are familiar with maintaining our bodies by going to the gym and our teeth by visiting the dentist and our car by taking it to a mechanic. All these activities take time, energy, and resources of varying degrees; they require work. Maintenance is a common term, but it has a special meaning for community associations. Maintenance is at the core of a board’s mission to “maintain, protect, and enhance” their communities. To expand on that mission, a board should apply maintenance (maintain), apply preventive mainte- nance (protect), and increase or improve in value, quality, desirability, or attractiveness (enhance). Why is maintenance an essential element of a board’s mission? If a board fails to maintain its communi- ty, it will quickly fall into disrepair and begin a downward spiral that is hard to reverse. The usual outcome is special assessments, board recalls, bank borrowing, and political upheaval leading to more chaos. Look no further than news reports on significant special assessments community associations are imposing for deferred maintenance and the struggles the owners are having to pay increased assessments. On the other hand, if maintenance is applied intelligently with a maintenance plan and a mainte- nance program accompanied by a properly prepared and funded reserve study, the community will enjoy desirable common areas and thrive at reasonable expense. There are three reasons or pillars of a well-maintained community all auguring for regularly applied maintenance: financial; environmental; and community stability. These cascade from one to the other in succession. Financial. According to a report by Jones Lang LaSalle1, you can achieve a 545% return on invest- ment by performing preventive maintenance. The exact savings are difficult to enumerate in all cases because they are largely unseen. But you can imagine that the wood-framed deck that has its surface coated on a regular basis with deck coating doesn’t have to have its wood joists or pickets replaced. Nor does the wood refuse need to be sent to the landfill. The savings when a deck doesn’t fail and injure its owners can be immeasurable; a few years ago, a deck collapse in Berkeley, Calif., killed seven college students. These are just the most visible examples of how regularly scheduled inspections coupled with regularly applied maintenance can save a community millions of dollars. Environmental. There are few things more important to society than lowering our carbon emis- sions. If every community association in the U.S. adopted maintenance, those emissions would be sizably reduced. One of the primary causes of environmental degradation is the premature replace- ment of building components such as wood, stucco, and concrete. A maintenance plan, maintenance program, and funding through a reserve study reduces premature failure of these components. That means there is less need for materials to be buried in a landfill. Community stability. A community preventive maintenance plan and maintenance program to implement the plan, and a regularly updated reserve study funded in conformance with its recommen- dations will save the community significant amounts of money. Those financial savings quickly translate into community stability and maximize property values. This also will reduce the probability of special assessments or borrowing to fund capital replacements or repairs. Boards can adopt a much more positive demeanor since they are maintaining their community by the book; they are doing everything they can do to maintain, protect, and enhance their community. There is also less management turn- over since there is less board turnover. 1. Jones Lang LaSalle, Determining the Economic Value of Preventive Maintenance, http://cdn.ifma.org/sfcdn/docs/default-source/ default-document-library/determining-the-economic-value-of-preventative-maintenance.pdf?sfvrsn=2 6 FOUNDATION.CAIONLINE.ORG  COMMUNITY ASSOCIATION MAINTENANCE DEFINITION AND TYPES OF MAINTENANCE Maintenance is the process of maintaining or preserving something, or the state of being maintained. Maintenance is often referenced in three ways: preventive maintenance; corrective maintenance; and deferred maintenance. Each approaches property preservation differently. These distinctions are very important to understand. Preventive maintenance. This is the art and science of proactively preserving buildings, equipment, and grounds from premature deterioration through a cyclical process of recurring inspections and key tasks. It is the method used to reduce component deterioration, resulting in no increases in costs, a reduction in the potential for accidents, and maximizing the useful life of the community asset. There are two tracks used to approach preventive maintenance methodology: Time based: You inspect and maintain components on a standardized schedule such as week- ly, monthly, quarterly, or annual basis. Usage cycle based: You inspect and maintain based on an asset’s usage or projected usage, such as through historical data, to determine when an asset will achieve a specified amount of usage. For community associations, common preventive maintenance examples include: Lubricating gate and door hardware or any other moving parts to prevent wear and tear. Cleaning drain lines, roof gutters, downspouts, roof decks, or anything else that flows to pre- vent blockages. Touch-up painting all exterior wood and metal surfaces or anything else that must be protect- ed from water and ultraviolet light damage. Checking ground-fault circuit interrupter (GFCI) breakers or any other life-safety components for proper function. Inspecting and adjusting lighting, irrigation, or any other controls as needed to improve per- formance or efficiency. Routine cleaning of buildings and landscaping of community grounds. Applying waterproof sealants to decks and balconies. Predictive, prescriptive, and seasonal maintenance are three subtypes of preventive maintenance that have unique features: Predictive maintenance is a strategy that utilizes technology, data analysis, or sensor devices to predict when an asset will need to be maintained or repaired. This is a strategy wherein common area components will be consistently monitored through sensors that provide warn- ing signs when failure is about to occur and when maintenance should be done; or it seeks to leverage current and previous data to determine when preventive maintenance should occur. FOUNDATION.CAIONLINE.ORG 7 COMMUNITY ASSOCIATION MAINTENANCE Prescriptive maintenance is a process of prescribing a date of anticipated component failure. This strategy is the most modern form of preventive maintenance as it utilizes machine learning and takes predictive maintenance one step further. Maintenance is prescribed before expect- ed failure. Prescriptive maintenance also provides information that can be used to maximize operational efficiency. Seasonal maintenance is based upon the time of year. For example, part of your fall seasonal maintenance plan would be to clean all roof gutters, downspouts, and flat-roofs, and mastic all roof penetrations. This subset of preventive maintenance helps highlight those components that need extra attention prior to specific weather conditions or seasons throughout the year and should not be a stand-alone approach to preventive maintenance. Corrective maintenance. This is the repairing of common area components that have prematurely deteriorated due to a lack of preventive maintenance and are no longer operating to their intended purpose. It also minimizes or stops progressive deterioration. Examples of corrective maintenance would include: Replacing sidewalks buckled or lifted by tree roots. Replacing missing asphalt shingles or roof tiles. Adjusting the grade around buildings to eliminate ponding water at foundations. Removing graffiti. Repairing broken water lines. Replacing smoke and carbon monoxide sensors. Repairing mechanical equipment (boilers, supply, and exhaust fans, etc.). Repairing structural elements to minimize progressive deterioration as well as potential safety issues. Repairing immediately due to emergency situations such as a hurricane, tornado, flood, or a car hitting a structural column. Deferred maintenance. This is the act of postponing needed preventive and corrective maintenance. This approach will lead to premature failure of building components and can potentially create serious safety and health issues. Deferring maintenance is much more expensive than applying corrective or preventive maintenance; deferred repairs can quickly turn into safety hazards or expensive building component replacements. 8 FOUNDATION.CAIONLINE.ORG  COMMUNITY ASSOCIATION MAINTENANCE COMMUNITY MAINTENANCE PLANS A maintenance plan is often referred to as a maintenance schedule. They are not the same thing. A maintenance plan has a schedule, but it is much more. A schedule is “a plan or procedure, usually written, for a proposed objective, especially with ref- erence to the sequence of and time allotted for each item or operation necessary to its completion; a timetable.” A “plan” is “a method of acting, doing, proceeding, making, etc., developed in advance; a specific project or definite purpose.” The maintenance plan is a schedule of property-related inspec- tions. But it also assumes that the inspections are recurring and that action in the form of repairs and preventive maintenance is the result. A maintenance plan to oversee and ensure the maintenance of a community association is essen- tial for its correct operation. The board’s mission is to maintain, protect, and enhance the community, especially the common areas. That mission is quite difficult to achieve without a maintenance plan and program in place. Community associations typically include three types of areas: separate interest; common area; and exclusive use common area. Condominiums, especially mid-rise and high-rise buildings, differ from planned unit developments and master associations in that they have common walls and common ownership of a large magnitude of building and common area components. These associations are designed to have common construction features such as central mechanical, electrical, plumbing, and fire suppression systems as well as decks, patios, trash chutes, swimming pools, spas, etc. Residents are using these common areas at all times of the day and night resulting in very high usage; and the areas are often abused. With the reliance of so many residents, there is a need for extra precautions due to health and life safety. Taken together, life safety, health concerns, and the general overall wear and tear on building components create a significant need that these buildings be well maintained and clean. This results in a much higher need for maintenance planning and programming. “Before anything else, preparation is the key to success.” — Alexander Graham Bell FOUNDATION.CAIONLINE.ORG 9 COMMUNITY ASSOCIATION MAINTENANCE Maintenance plans are so vital that several states have mandated maintenance plans for con- dominiums, including California (CALGreen Section 4.410), Oregon (ORS 94.595-4), and Minnesota (515B.3-106). What do California, Minnesota, and Oregon legislators know that other states don’t? The statutes presume that without the “minimum” guidance of a maintenance plan, the board is naturally hesitant to spend money on maintenance. Legislators likewise recognize that without a plan that identifies what common area components to inspect, when to inspect them, and how to put a pre- ventive maintenance program in place, the common areas will quickly deteriorate, leading to extremely expensive building and common area component replacement. These states understand the importance of maintenance and how vital these tools are for the success of community associations in their state. “By failing to prepare, you are preparing to fail.” — Ben Franklin What is a maintenance plan? Simply put, a maintenance plan outlines each common area compo- nent the association is responsible for maintaining and provides a schedule to inspect each compo- nent at least once per year. There are different types of maintenance plans ranging from a simple spreadsheet listing the com- mon areas that require periodic inspections, all the way to a comprehensive preventive maintenance manual. Let’s first examine the simple plan, which is a plan that anyone can prepare with little effort. Simple Plan: Spreadsheet and Schedule To prepare your own maintenance plan, first check your governing documents (covenants, conditions, and restrictions, or CC&Rs) for a maintenance matrix listing the common areas, separate interest areas, and the exclusive use common areas of your community. If a maintenance matrix was created for your community, it is usually found in the association plan or the CC&Rs. Then, review the reserve study and add those major components to your list. Identify which building components are manufactured products that have their own operating manual or care and maintenance instructions. Extract the maintenance recommendations from those manuals. Also, make sure that you note what warranties those components carry and make sure the maintenance is done to honor those warranty dates. Create a spreadsheet from your completed list. Walk the community to make sure you’re not missing anything. Then, talk to your community manager, your landscape and building maintenance contractors, and your reserve analyst. Ask them how often each common area component should be inspected; is it once a year, month, or quarter? Identify which components may require preventive maintenance and list what that entails and then list what month that maintenance should be performed. Next, hire a general contractor or inspector who is licensed and insured with both general lia- bility (without a homeowners association exclusion), and errors and omission insurance, since they will be acting as a consultant. Task that contractor with completing the inspections and require that they provide the board with a sign-off sheet as to which inspections were performed and the results of the inspection. The sign-off sheet should disclose whether any building component failures or deferred-maintenance issues were found, and if so, what is required to make corrections. 10 FOUNDATION.CAIONLINE.ORG  COMMUNITY ASSOCIATION MAINTENANCE The community manager, if you have one, then needs to have any preventive maintenance or corrective maintenance performed. After each inspection cycle, make changes to the schedule of inspections and required work, as appropriate. “Always plan ahead. It wasn’t raining when Noah built the Ark.” ­— Richard Cushing Comprehensive Plan: The Preventive Maintenance Manual The most comprehensive maintenance plan is generally included within a community association pre- ventive maintenance manual. Few boards are familiar with preventive maintenance manuals. They are commonly used in California, Minnesota, and Oregon (see statutes above). The manual includes a main- tenance plan that is specific to each community and contains inspection checklists and maintenance information. A comprehensive manual should include the following: Photos and maintenance information for structures, landscape, hardscape, and amenities. Biweekly, monthly, quarterly, semiannual, and annual inspection schedules. Site plans. Maintenance exhibits. Care and maintenance information for manufactured products. The manual provides information on the common area building components and other common areas, even those often not listed in the reserve study, such as retaining walls, drainage swales, struc- tural concrete, waterproofing, sewer laterals, concrete and paver flatwork, specific stormwater devices, and other long-lived building components. Mid-rise and high-rise buildings are usually provided with “operations manuals” for their mechan- ical equipment. The maintenance manual preparer will include the key inspection routines from these operation manuals in the preventive maintenance manual. Then, when an inspection identifies a com- ponent requiring maintenance or if an inspection or maintenance protocol is due, the correct mechan- ical, electrical, or plumbing vendor is called in to service the equipment. Mid- and high-rise manuals are more complex because they include inspection and maintenance information for the regular building components and common areas, but also specialty mechanical equipment and systems such as: Heating, ventilation, and air conditioning system (HVAC). Water supply and treatment system. Fire suppression system. Emergency power system (backup generators, invertors). Garage carbon monoxide sensor system. Common domestic hot water system. Elevators. Stormwater and sewage pumps and alarms. Automatic vehicle and pedestrian gates. Access control systems. FOUNDATION.CAIONLINE.ORG 11 COMMUNITY ASSOCIATION MAINTENANCE Just like the manual in your car, the preven- tive maintenance manual is only a plan and will CASE STUDY: not ensure the community performs important inspections and maintenance. It’s simply a tool Master Association that provides the information needed to make in San Diego good decisions regarding maintenance. You will need to implement the maintenance manu- The master association is in coastal California, al through a maintenance program. situated just above an estuary about 1 mile from the beach. Ocean breezes bathe the com- “The time to repair the roof is munity in moist salt air. The developer of the master association, with 19 subassociations when the sun is shining.” built by merchant builders, never gave the ­— John F. Kennedy management company a maintenance manual for its common areas. Seven years after the Why Does a Community Need a Preventive first homeowners moved into the commu- Maintenance Manual? nity, the master association commissioned Ensuring protection of health and safety, an inspection of its 9 miles of metal fencing increasing financial savings, reducing risk, and that surrounded the golf course and separat- preserving the lifestyle of the community are ed the subassociations from the golf course. just a few very important reasons to follow a Not surprisingly, that moist salt air combined maintenance plan. with the constant recycled irrigation water coming off the golf course settled on the The goal of your plan is to ensure that fencing, which literally disintegrated in whole inspections and subsequent maintenance or 8-foot metal sections. Landscaping, which repairs are completed. This results in maximiz- had grown through the metal fencing, also ing the life of each of your building compo- caused disintegration of the fence. Moisture nents and common areas and may result in a was trapped against the metal, emitting pure reduction of reserve funding, thereby stalling oxygen that led to quicker degradation. assessment increases. Ultimately, the master association ended up A maintenance plan, like a savings account, spending hundreds of thousands of dollars can yield savings each month. Over the long to replace the 8-foot sections of fencing. It term, the savings can become substantial. So, painted the entire fence with an epoxy mastic if you are a board member or community man- polyurethane paint that was much better at ager, look carefully at your reserve study to get protecting the metal from the moist salty air an idea of the cost of replacement funding. and the golf course irrigation. A simple one- Your maintenance plan, when used in conjunc- page plan recommending an annual inspec- tion with your reserve study, should help you tion of the fence would have saved the master extend the time necessary to collect the funds association hundreds of thousands of dollars. needed for the replacement of all those com- ponents. Financial Savings: Increase Property Values One of the most important reasons to have a plan is to save money. Saving money leads to community stability, which is defined as greater homeowner involvement and a reduction in board turnover. It’s a domino effect. It is certain that the absence of a maintenance manual will reduce the useful life of building components and common areas. 12 FOUNDATION.CAIONLINE.ORG  COMMUNITY ASSOCIATION MAINTENANCE Have a maintenance manual in place so that you can identify problems quickly and then make the repairs. That is the real beauty of a maintenance manual: The inspections identify problems to be fixed before they turn into a disaster. “A man who does not plan long ahead will find trouble at his door.” ­— Confucius Healthy Environment Water intrusion is the enemy of buildings. Water can cause fires by causing electrical shorts. It can cause structural problems when wood is compromised by rot. Wet wood is much more prone to termite dam- age as termites prefer to eat it over dry wood. Water intrusion and the resulting dampness also are adverse to human health. Damp or moldy buildings increase the chances of respiratory problems like asthma and bronchitis as well as hay fever, sneezing, stuffy nose, sore throat, wheezing, breathing difficulty, or cough. Mold can affect people differently. How much a person is affected depends on how sensitive they are and on how much they are exposed. The critical warning signs of water intrusion are visible mold, water damage, damp materials, soft wood on horizontal surfaces, or the smell of mold. Dampness and organic material cause mold to grow. So, if you can mitigate the dampness, you can control the mold. The dampness that is necessary for indoor mold to grow can come from either inside or outside a building. Some indoor water intrusion sources include leaking or burst water pipes (under sinks or inside walls); not enough venting to the outside by open windows or exhaust fans in places where water is used or moisture is produced (for example, bathrooms, laundry areas, kitchens, and water heaters); and condensation on cold surfaces including windows. Some outdoor water intrusion sources include leaky roofs, poorly sealed windows, or from flood- ing. Outdoor surfaces that slope and drain water toward a building, including from a downspout (neg- ative slope toward the building), also can lead to water intrusion. Safety and Risk Reduction: Reducing Accidents and Insurance Premiums A maintenance manual and program are critical tools for reducing accidents in communities. Walking the community on a regular basis and looking at each common area component will disclose what needs to be fixed prior to it becoming a liability. There are potential accidents waiting to happen to residents and guests. Such accidents could include raised concrete sidewalks due to tree roots, broken light posts with exposed electrical wiring, broken pool gates allowing unmonitored access to children, and tot lots/playgrounds not in compliance with current safety standards. The reduction of accidents alone is reason enough to have a maintenance plan and program. Condominiums have garnered a litigious reputation. Each year, new laws are promulgated across the country that address yet another problem or issue pertaining to attached communities. Construction defect litigation is big business with many attorneys specializing in costly lawsuits against community builders. A maintenance plan and program can help reduce construction defect litigation by making sure building components are well maintained and not mistaken for defects or warranty FOUNDATION.CAIONLINE.ORG 13 COMMUNITY ASSOCIATION MAINTENANCE items. A lack of maintenance is often seen by boards as the reason to start construction defect litiga- tion even though the board is responsible to perform the maintenance in the first place. “Good fortune is what happens when opportunity meets with planning.” — Thomas Edison Preserving and Enhancing Lifestyle Proactive inspections and repairs not only save money but also assist the community in avoiding reg- ularly raising assessments and special assessments. A well-maintained community is appreciated by its members and results in higher values from real estate and insurance appraisers who must report on the common area conditions. This leads to less board member recalls, more people willing to serve on the board, and less community management turnover. Ultimately, the consequential savings result in community stability and harmony. A community that has a maintenance manual implemented through a maintenance program not only enhances its balance sheet, maintains real estate values, safety, and health but also the spirit of the homeowner members. When a parent takes their toddler to the playground, and the equipment is painted without sharp edges and has been properly cleaned and fall protection is in place, they are happy. The elderly couple who take evening walks through the common area park and aren’t challenged by sidewalk trip hazards or graffiti-stained common area landscape elements are happy. During the summer when children are using the common area pool and amenities, they neither suffer from the effects of mold in a dingy, dimly lit bathroom or get hurt by upended concrete or damaged pool coping. Families are proud of their community and happy to bring their friends over to enjoy the common area amenities with them. Reducing Carbon Emissions Few things are as important to society as lowering our carbon emissions. If every community association in the country were to adopt preventive maintenance through a maintenance plan and program, that footprint would be substantially reduced. One of the primary causes of environmental degradation is the premature replacement of building components such as wood, stucco, and concrete. With a main- tenance plan, there is much less, if any, premature failure of these components. Consider concrete, one of the largest emitters of greenhouse gasses on the planet. When concrete or stucco (which is a cement-based product) is not replaced and sent to the landfill due to a lack of maintenance, the benefits are twofold. First, the concrete doesn’t have to be trucked to the landfill at great cost in labor, fuel, and landfill space. Second, new concrete doesn’t have to be produced, elim- inating the harm that’s caused through its extremely high heat production methodology. Do All Communities Need a Maintenance Manual? The answer is a resounding yes. But the more common area that a community has, the greater the need. A planned unit development (PUD), also known as a single-family community, may only need a simple plan if it has few common area amenities. However, if it has a pool, park, entry gate, fences and, especially, a recreation facility, then it needs a more robust plan. A condominium, mid-rise or high-rise, or a master association absolutely require a maintenance manual and program. 14 FOUNDATION.CAIONLINE.ORG  COMMUNITY ASSOCIATION MAINTENANCE The familiar quandary with common areas lies in the fact that most developers throughout the country do not provide their new communities with a maintenance manual, simple maintenance plan, or program at turnover. Without a list of common area components and without any indication from the developer when to inspect them and how to maintain them, these common areas are simply for- gotten and left to chance; some problems often aren’t noticed until they fail. Having a maintenance plan in place can prevent that loss. How Do You Implement Your Maintenance Manual? You implement your maintenance manual (or simple maintenance plan) through a common area mainte- nance program. There are two types of common area maintenance programs. One program is designed for mid-rise and high-rise buildings which have abundant mechanical, electrical, and plumbing systems, and a high level of complexity. At these communities, your building engineer will oversee the commu- nity’s maintenance plan. The program for all other communities, including single-family home commu- nities, master associations, and horizontal condominiums, is driven by your maintenance contractor. Here, without mechanical systems, the focus is on common areas built primarily of wood, concrete, and other building materials. FOUNDATION.CAIONLINE.ORG 15 COMMUNITY ASSOCIATION MAINTENANCE BUILDING MAINTENANCE PROGRAMS Your community’s building maintenance program is the vehicle by which the information outlined in your maintenance plan or maintenance manual is implemented. At the heart of your building maintenance program, you have a skilled maintenance technician who performs corrective and preventive maintenance on a regularly scheduled basis—one day per month, per week, or full-time, based on the size and maintenance needs of your community. Your maintenance program requires a maintenance manager who implements your maintenance plan and coordinates all the maintenance requirements (see "The Maintenance Manager," p. 17). He or she advises the board and community manager when certain inspections and repairs are needed, per the maintenance plan. Based on the size, type, and nature of the community, there are usually some combination of these programs. Your building maintenance program is the hub at the center of the maintenance wheel, effectively overseeing and coordinating the implementation of these programs. It provides all the other programs a structure for information to be shared, coordinated, and acted upon. For example, if your pest control company encounters extensive termite damage, it will provide a report to the community manager. The manager will then pass the report to the maintenance manager who will add that issue to the community’s wood replacement needs. If your janitorial company finds the gate to the pool is broken, that information is given to the community manager to contact the maintenance manager or technician directly to immediately repair the gate. The job of a community manager is very difficult due to its broad scope. He or she assists the board in overseeing the financials, navigating the legal challenges of the community, monitoring the landscaping, and attending and assisting the board at meetings. They field calls daily from home- owners about pools, pets, parking, and many other things. But in addition to everything else, the community manager must oversee the maintenance of the community. Having a building maintenance program with a maintenance manager is the best way to manage the largest assets of the community: the buildings, grounds, and common areas. The maintenance manager critically assists the community manager and is a liaison and facilitator between the technician(s) working in the field. 16 FOUNDATION.CAIONLINE.ORG  COMMUNITY ASSOCIATION MAINTENANCE The Maintenance Manager The individual in this job assists the community manager and the board on the various specialty maintenance programs such as: Landscaping Pool and fountain Boiler Janitorial Heating, ventilating, Elevator Lighting and air conditioning Fire and life safety Roofing Plumbing and jetting Pest control Stormwater drainage Board of Directors Community Manager M ai Landscaping Janitorial l ua nt en an an eM ce anc Pla Building te n Fire and Maintenance n Lighting life safety Main Program Elevator Roofing Maintenance Maintenance Manager Technician Mai Boiler Pest control n te n la n eP an c c eM an Facilitates Stormwater Pool and n an te drainage fountain u n al ai M Heating, Plumbing ventilating, and jetting and air conditioning FOUNDATION.CAIONLINE.ORG 17 COMMUNITY ASSOCIATION MAINTENANCE 3 Keys to a Successful Building Maintenance Program The first step in creating a successful building maintenance program is having a maintenance plan or manual and performing the accompanying inspections. The second is to make the repairs or cor- rective maintenance discovered during the inspections or those that are reported by other vendors and homeowners. Third: Perform preventive maintenance in addition to these repairs so that over time there are fewer building components breaking down, thus resulting in less costly repairs. 1. Inspections: Inspections are the first key ingredient. By completing the inspections outlined in your maintenance plan or maintenance manual, you are ensuring awareness of asset condi- tions as well as identifying any maintenance needs. 2. Corrective maintenance: This maintenance corrects any problems that have been identified during the inspections or by residents. Corrective maintenance is simply the repair of common areas that have been damaged by use, age, or function. 3. Preventive maintenance: This is the act of preserving buildings, equipment, and grounds through a process of recurring tasks such as lubricating gates or anything else that moves; cleaning drain lines or anything else that flows; touch-up painting on all exterior wood and metal surfaces or anything else that must be protected from water and ultraviolet damage; checking ground fault circuit interrupter (GFCI) breakers or any other life-safety compo- nents, etc. Why Communities Need a Building Maintenance Program Without an active and ongoing building maintenance program to proactively address the maintenance needs of the community, safety issues will likely develop. Additionally, the financial savings can be immense. Your buildings and grounds are the community’s largest asset. Having a dedicated maintenance team working each day, week, or month, proactively maintaining components, completing corrective maintenance, and remedying any other issues that may occur while they are on-site will result in huge financial savings. However, it can sometimes be difficult to quantify the savings because you can’t put a cost on something until it’s broken or fully deteriorated. One measure of the savings is through the community’s insurance costs. A well-maintained com- munity substantially reduces insurance premiums because there is less accident risk. Insurance compa- nies will outline these risks for associations and should counsel the community manager and board that a building maintenance program is an important tool for reducing risks and lowering premiums. The other way to quantify financial savings is by reducing the need to replace common area components as frequently, thus lowering the necessary reserve funds for replacement. As an example, consider a 30-year roof that is valued at $9 million. The annualized cost is $300,000 per year ($9 million divided by 30). Therefore, if roof maintenance is performed every year to extend the life of the roof by just five years, the annualized cost of the roof is reduced by roughly $43,000 per year. On the other hand, if no maintenance is performed on the roof, and it fails after 25 years, the new annualized cost of the roof jumps to $360,000 ($60,000 more per year)—a huge financial burden that could have been avoided. 18 FOUNDATION.CAIONLINE.ORG  COMMUNITY ASSOCIATION MAINTENANCE Not only can the useful life of your components be extended through effective maintenance, but the utility of some building components can be extended indefinitely. As an example, consider the Disneyland method of preventive maintenance on its over 50-year-old, very expensive, wrought iron fencing along Main Street. Because touch-up paint is added almost every night, Disney will most probably never need to replace the fence. In that example, the year-over-year impact on reserve funds would be $0. If a community takes the same approach, inspecting and touching up ornamental iron fencing regularly, then the reserve analyst has a re-set expectation that the fence won’t have to be replaced for another 30 or more years. Like the Main Street fence at Disneyland, many building components within communities can last forever if properly maintained. As a result, budgeting for reserves can be lowered as failure becomes less prevalent. The old saying “pay me now or pay me more later” can be turned on its head and become “maintenance today equals savings tomorrow.” Why Building Maintenance Programs Aren’t Widespread Some boards fall into the “penny-wise and pound-foolish” trap, thinking that it is their job to “save money.” They are reluctant to raise assessment levels to pay for the always-increasing cost of ongoing corrective and preventive maintenance or even make repairs because the financial backlash may result in unhappy neighbors. The common mistake that some boards make is to believe that buildings and common areas don’t require a building maintenance program. They operate on the “fix-it-when-it-breaks” method, which is flawed and extremely costly. That method results in damaged or unsafe building components remain- ing in place and getting worse every day until they break altogether. At that point, the fix is much more expensive than before—sometimes by a factor of 10. Every common area component requires preventive maintenance—some more often than others. Even concrete requires periodic maintenance. The difficulty lies in the fact that deterioration occurs gradually over longer periods of time and is not always visible to residents, board members, or com- munity managers. It takes a trained eye by a maintenance general contractor, architect, or structural engineer to know what common area components require more attention. And that is why it is so important to have a building maintenance program in place: To ensure professionals are frequently monitoring and inspecting common area components. What Are the Specific Benefits of a Building Maintenance Program? Homeowner benefits. One of the benefits homeowners enjoy from well-maintained common areas is increased property values. Every time a home sale escrow takes place, an appraiser visits the communi- ty and reviews the overall condition of the common areas, the reserve study numbers, and the amount of deferred maintenance on common area assets. An example of this occurred in San Diego. Two separate homeowners associations were built by the same builder side by side. The homes in both communities were identical, and exterior building maintenance was the association’s responsibility. Home prices in the area averaged $400,000 at the time. One community implemented the manual provided by the builder and an accompanying build- ing maintenance program. The other did not. FOUNDATION.CAIONLINE.ORG 19 COMMUNITY ASSOCIATION MAINTENANCE After 10 years, homes in the well-maintained community were selling for up to $150,000 more than the other because of actual and perceived problems with building exteriors and common areas. The association that failed to implement their manual saw the success of its neighbors and started the expensive process of corrective and remedial maintenance. Eventually, its property values equalized. But in the process, the second community expend- ed all its reserve funds and needed an additional special assessment to catch up. Now, it too has a manual, maintenance program, and reserve study. Community benefits There are six major benefits the Community manager benefits. They benefit by community enjoys by implementing knowing they have the tools that support the most a building maintenance program: professional job possible. Having a maintenance plan or manual in hand, a manager has the tools 1. Safety and risk reduction. to guide the board to implement its plan through Reducing accidents and insurance a building maintenance program. These tools save premiums. the manager time. Preventive maintenance reduces 2. Healthy environment. failures, reducing the need to request and follow up 3. Financial savings. Increasing on repair and replacement bids. These tools also property values and community eliminate many late-night emergency phone calls harmony. and emails because effective maintenance is being 4. Preserving and enhancing performed on a consistent basis. lifestyle. 5. Reducing carbon footprint. What Community Types Require 6. Reduction of lawsuits—not only a Maintenance Program from less accidents but also from Any community with common areas should have a some types of construction defect building maintenance program. The frequency and litigation that are precipitated by needs of the building maintenance program depend the lack of maintenance. on the amount of common area components main- tained by the association. For instance, in a planned unit development, there is typically less common area, sometimes only consisting of landscaping, streets, entry gates, and perimeter fencing. However, even this small amount of common area needs to be inspected and will have corrective and preventive maintenance needs. Next on the scale in complexity and scope is an attached condominium community which often has a much greater magnitude of common area. In addition to the landscaping, streets, entry gates, and perimeter fencing, there also is common area roofing, siding, plumbing system, exterior lighting and electrical system, sewer system, pool area, clubhouse, and mini parks, among other things. With this scale of common area, it is very easy to forget or overlook the maintenance of components. High-Rise Buildings Require Two Levels of Maintenance Programming In addition to your standard maintenance program outlined above, mid-rise, and high-rise commu- nities require a second, more comprehensive level of maintenance for their mechanical systems and equipment. It helps to look at a high-rise building more like a large self-contained ship than a typical residential condominium community. Like a ship, there are sophisticated systems for water supply and 20 FOUNDATION.CAIONLINE.ORG  COMMUNITY ASSOCIATION MAINTENANCE treatment, air conditioning systems, fire suppression systems including backup generators to power the security and alarm systems, carbon monoxide handling systems in the garage areas, and many more. Each piece of mechanical equipment comes with an operations manual provided by the equip- ment manufacturer. Among other things, it outlines when inspections and maintenance should take place. In a larger high-rise building or a mixed-use building that contains residential and commercial units, there could often be 15 or more mechanical, electrical, and plumbing (MEP) systems with accom- panying operating manuals. That’s why it’s critical to have one comprehensive preventive maintenance manual that provides the overarching schedule of required inspections and maintenance. By having a maintenance manual, your building engineer, maintenance committee, reserve analyst, community manager, and board can all easily see the inspection and maintenance schedule, not only for the mechanical equipment but for all the common areas of the high-rise community. The Duty to Maintain, Protect, and Enhance the Community Just as your real-estate agent and attorney have a fiduciary duty to work in your best interests, so too does a board. There is a fiduciary duty to the community, and the board is held to a higher level of trust. This is a duty to act for their members’ benefit while subordinating their own interests. It is among the highest standards of duty implied by law. Board members have a “duty of loyalty” and a “duty of care,” which could be imposed by statute or the association’s governing documents. Boards must be careful in performing these duties. They must always attend board meetings, review reports, ask questions, and rely on professionals such as attorneys, accountants, reserve ana- lysts, and other consultants. If board members perform accordingly and follow the duties of loyalty and care, their decisions will be protected by the “business judgment rule,” limiting their liability. Ultimately, board members must be reasonable and use common sense. Under their duties of loyalty and care, a board must seek to maintain, protect, and enhance their communities. There is no better way to achieve this mission than through implementing a maintenance plan and program. FOUNDATION.CAIONLINE.ORG 21 COMMUNITY ASSOCIATION MAINTENANCE INSPECTIONS FIRST Why inspections? The tragic collapse of Champlain Towers South in Surfside, Fla., awakened the world to the importance of inspections and the dangers created by deferred maintenance. Aging infrastructure associated with a lack of inspections and preventive maintenance isn’t just a high-rise problem. There are thousands of condominium communities throughout the U.S. facing challenges similar to Champlain Towers South. 30-Year Structural Inspections Too Late Structural inspections are vital for the long-term health of any building. But by age 30, water intrusion may have already caused extensive damage to covered or difficult-to-inspect structural com- ponents. No building should wait 30 years for a structural inspection. To be sure, no building should ever wait more than one year before beginning inspections designed to protect the building from water and ultraviolet light damage. Buildings near saltwater have additional challenges because of the cor- rosive nature of salt-laden air. Building surfaces are protected by paint, stain, waterproof membranes, caulks, and sealants. These materials degrade over time and must be replaced. The key is to monitor and maintain them from the very beginning of building occupancy through inspections and preventive maintenance. In theory, structural components could last forever if they are not affected by the dam- aging effects of water, salt air, and sunlight. During the first few years of a new building, builder and manufacturer warranties are in place. But, how well trained is the board and community manager in determining what is a maintenance require- ment and what is a warranty issue? This challenging question is often left to the builder’s customer service representative who may be skilled in providing corrective maintenance but usually has little or no experience in preventive maintenance. TYPES OF INSPECTIONS 1. NONSTRUCTURAL INSPECTIONS Fire and Life-Safety Inspections These inspections are important to ensure the safety and code compliance of your community. They are typically conducted once a year to examine the safety systems and safety devices and ensure all safety requirements are met. Emergency power (generators and Fire curtains automatic operation batteries) Fire sprinkler systems and fire stopping Fire door automatic closing Fire extinguishers 22 FOUNDATION.CAIONLINE.ORG  COMMUNITY ASSOCIATION MAINTENANCE Fire pumps Carbon monoxide sensors Fire alarm control panels Water flow sensors Fire and smoke sensors General Maintenance Inspections (Nonstructural) These inspections are typically conducted by the building engineer or corresponding specialty vendor. They are designed to check the current condition of each of the building components. They will identify and report any areas needing maintenance, allowing the board to properly plan, budget, and address those issues. Waterproof envelope inspections (includ- Security inspections (including access ing roofing and deck coatings) controls and voltage of components) Trash chute doors and pistons Garage gates and motors Surface condition inspections Mechanical, Electrical, and Plumbing (MEP) Component Inspections These inspections are important to ensure the mechanical, electrical, and plumbing components and infrastructure are operating efficiently and should be conducted at least once per year. Domestic and closed loop boilers Pumps for plumbing and heating, ventila- (plumbing) tion, and air conditioning systems Pipes (domestic water (copper); waste/ Cooling towers and chillers storm/vent (cast iron); shut-off valves) Supply and exhaust fans Fire sprinkler system pipes and heads Specialty Inspections Specific state-mandated inspections In California, SB 326 went into effect in January 2020. A structural engineer or architect is required to visually inspect exterior elevated elements and load-bearing components 6 feet above ground, including: balconies, decks, patios, and elevated walkways. The inspection must be done on a regular basis, and the results must be added to the reserve study. STRUCTURAL INSPECTIONS A structural inspection of a building relates to the structural components of the building which, if com- promised, can result in either localized or global structural deterioration and ultimately failure. There are two types of structural components. The first are components that are structural in nature but are not relied upon to support the building. An example would be either concrete balco- nies or wood decks. The second is the primary load-bearing system that provides the support of the building and transfers the loads into the ground. Typical examples are the columns and beams. FOUNDATION.CAIONLINE.ORG 23 COMMUNITY ASSOCIATION MAINTENANCE The inspection of the structure of a building is generally based on industry standards such as the one published by the American Society of Civil Engineers (ASCE), the Guideline for Structural Condition Assessment of Existing Buildings 2, and Guideline for Condition Assessment of Existing Buildings 3. This type of inspection is conducted under the direction of a licensed engineer with special exper- tise in existing buildings and is typically conducted in a two-step process. In step one, known as a preliminary evaluation, visual observations are performed on all accessible structural elements to evaluate their condition as well as the overall building for potential underlying conditions indicative of structure problems that cannot be seen. Two examples would be moisture or settlement. The second step, known as a detailed evaluation, is performed in any localized areas identified in the preliminary evaluation where concerns are identified. The detailed evaluation may include tasks such as invasive testing to review structural components that cannot be seen or material testing of structural components coupled with design calculations to determine structural adequacy. In some cases, the detailed evaluation may include temporary shoring of a building in areas of severe deterio- ration as additional investigations are performed. In all cases, the evaluation reports should be retained for future use as structural deterioration is a progressive condition that should be evaluated based on the most recent inspections. As for frequency of these inspections, the reports include a recommended inspection frequency based on the observed conditions with a general guideline being a maximum of every 10 years for buildings up to 20 years of age and every five years for buildings older than 20 years. BUILDING ENVELOPE INSPECTIONS As discussed, moisture infiltration is a common cause of underlying damage to a building structure as well as other underlying components. The portions of a building that prevent this from occurring are the exterior walls (facades) and the roof. The combination of these is known as the building envelope. The inspection of a building envelope is generally based on industry standards such as the Guideline for Condition Assessment of the Building Envelope published by ASCE. While a critical concern of this type of inspection relates to the condition of the facade that becomes detached and falls due to aging, sources of potential moisture infiltration also should be identified and corrected. 2. ASCE Standard SEI/ASCE 11-99 3. ASCE Standard ASCE/SEI 30-14 24 FOUNDATION.CAIONLINE.ORG  COMMUNITY ASSOCIATION MAINTENANCE ROLES AND RESPONSIBILITIES: MAINTENANCE FOR DEVELOPING COMMUNITY ASSOCIATIONS What Is a Developing Community Association? For the purposes of this chapter, a “developing community association” is defined as a community that has had its first settlement or sale (conveyance to a homeowner) but not its last. In addition, some (but not necessarily all) of its common and limited common areas have been substantially completed. A community association is no longer “developing” once all the homes have been settled and sold, and all the common and limited common areas are substantially completed. Developing community associations most likely have new or nearly new common and limited common areas. It is human nature to assess the need for maintenance based on the appearance of a particular component. Naturally, it does not occur to many professionals that maintenance may be necessary when everything appears to be reasonably new. This underscores the need for profession- als who specialize in both long- and short-term maintenance planning at the very earliest stages of a community association’s life. Special Needs for New Components New components often have specific needs in the early stages of their lives, especially the first year. For example, in the Northeastern United States, developers spend tremendous amounts of money every year replacing “new” concrete that was damaged by the application of sodium-based chemicals from snow removal operations. New concrete is especially susceptible to damage from these chemicals. In the Northeast, concrete should go through four seasons of curing before any such chemicals are applied, and even then, their application will likely cause damage. Interior surfaces of pools and spas are another good example. Most pools are finished with a plaster material that is very high in calcium. It takes a few months for this material to cure, and during that time, the pool’s water chemistry must be very carefully monitored. If “calcium hardness” levels are not maintained during this crucial period, the surface will likely fail prematurely. When the surface fails, the debate begins over who is at fault. Engaging with professionals in the business of advising as to “break-in” maintenance protocols for new components is a critical step in the planning of a new community. Transitioning Amenities to Homeowner Use and Control Sometime before the board turns over to homeowner control, most if not all of the association’s ameni- ties will be constructed. Those amenities should be used by residents and maintained by the association as soon as they are substantially complete. Because the developer usually controls the board at that time, there is often conflict after the homeowner board is seated. The big question is whether the ame- nities were ever properly completed. To complicate things even further, the purported completion may have been several years ago. This question gives rise to the need for a process by which responsibility for the amenities is transferred to the association. FOUNDATION.CAIONLINE.ORG 25 COMMUNITY ASSOCIATION MAINTENANCE One such process involves the association contracting with a professional engineer or architect to inspect the completed facilities right when they are opened. The inspection would be memorialized by a form called a “certificate of substantial completion.” The form is very simple (usually one page) and is essentially a statement made by a licensed, qualified person indicating that they have reviewed the plans, and they certify that the amenity is “substantially complete.” Ideally, the certificate would be accompanied by a punch list of everything the inspector found “wrong,” such as deviations from the plans, incomplete items, or construction defects. The deficiencies should be corrected (or explained), and the corrections or explanations should be noted. The punch list, certificate, and record of any corrections or explanations should be maintained in the association’s records as evidence that the amenity was properly completed and when that happened. These documents are extremely helpful years later when, understandably, none of the current management team has any recollection. Selecting Board Members It is normal for homeowners to want representation on the board, even if that representation is in a “minority” role. Representation means that the homeowner is an actual voting member of the board, not an advisor. Developers should seriously consider appointing homeowner representatives to the board early, especially in states that do not require election meetings before 50% of the units are conveyed. If you believe an early appointment is warranted, consider a mock election meeting, which would be conducted exactly as future election meetings. Homeowners would select someone from the mem- bership to serve on the board, following which, the developer will appoint that individual. Developers often resist this process. However, having a dissenting party on the board who represents the interests of homeowners is vital to truly gain the perspective of the homeowners, and they will place much more faith in the value of the appointment if they are permitted to choose the individual. Developers should be cautious not to handpick homeowner board members who may appear to have been appointed to serve their needs. Setting Up Committees Early in the life of most community associations, there is commonly only one standing committee, which is the architectural control or architectural review committee. Often, homeowners express an interest in other things, such as the association’s finances, facilities, social programming, etc. Effective committees are created based on need. In other words, if there aren’t any homeowners with an interest in social programming, it may not make sense to set up that committee. All associations should have a clear charter that is adopted by the board. The charter should delineate exactly what the committee will do, limit the number of members serving on the committee, dictate how members are appointed to the committee and how they can be removed, etc. Without a charter, among other things, the mem- bers of the committee may not have coverage under the association’s directors’ and officers’ liability insurance or workers compensation insurance. When establishing committees, the board also should decide whether the committee is set up for a limited purpose (e.g., paint color selection committee) or a standing committee (e.g., finance committee). The board also should appoint a board member to act as a liaison to report to the board at meetings. 26 FOUNDATION.CAIONLINE.ORG  COMMUNITY ASSOCIATION MAINTENANCE Maintenance vs. Construction Defects Community associations are well advised to engage with third-party engineering firms to evaluate the association’s physical plant following transition of the board to homeowner control.4 A transition engi- neer will evaluate whether the community is constructed in general conformance with the plans and good workmanship. A construction defect is present when a component is not built in general conformance with the plans or if it has been constructed with poor workmanship resulting in additional maintenance being required or failure to perform its intended use. It is easy to label the premature deterioration of any component in a developing community association as a construction defect, especially in a community with a very long development period. By way of example: The expected useful life of the surface of an asphalt tennis court is commonly about 10 years. If the association performs a transition engineering study when the court is 9 years old, chances are the engineer will note that the surface of the court is deteriorating due to a lack of preventive maintenance and in need of resurfacing. A reputable engineer will also note that the court is nearing the end of its useful life. If the study were performed at 3 years and the same deterioration is noted, the court would have realized just under one third of its useful life. The engineer would cer- tainly note that and would hopefully opine as to what specifically caused the premature deterioration. It is possible that a lack of preventive maintenance contributed to the premature failure, and equally possible that construction defects are present. Warranties for Developing Communities It is critical that community association managers understand the actual warranties for specific compo- nents owned by their association. Like auto manufacturers, most builders/developers offer some sort of short-term warranty that covers virtually everything in terms of function and perhaps even fit and finish. The duration is often one year from closing, or in the case of common areas, one year from substantial completion or in-service date. Additionally, there is often a warranty for major structural components. This warranty is commonly dictated by state statute and is often in the neighborhood of 10 years in duration (from substantial completion). For major mechanical components (such as air handlers and water heaters), warranties are gen- erally offered by the manufacturer. The duration of these warranties varies greatly. This is why it is important to obtain documentation for these components when the home or building is delivered. Building materials such as roof shingles and siding generally have longer-term warranties such as 25 or even 50 years. Like mechanical components, these warranties are offered by their manufacturers. Warranties can range from material product only warranties to labor and material product warranties. Managers should note that warranties for mechanical components and building materials almost never cover installation costs—only the cost of the component material itself. It is important to obtain doc- umentation from the manufacturer about material warranties when the home or building is delivered. The Care and Feeding of Expectations Overselling your own personal abilities can be very dangerous. Whether accurate or not, both devel- oper and homeowner board members often see their managing agent as an expert in all facility related matters. Let that statement be a wake-up call if you are unaware of this phenomenon. Obviously, some community managers have a higher level of experience and expertise than others. The proper man- 4. Best Practices Report: Transition From Developer Control, https://foundation.caionline.org/wp-content/uploads/2017/06/bptransition.pdf FOUNDATION.CAIONLINE.ORG 27 COMMUNITY ASSOCIATION MAINTENANCE agement of expectations is of paramount importance from the managing agent’s perspective. While you may not be the facilities expert, you should be a good resource for your clients. While you may not have specific knowledge of certain systems, you have the knowledge of and ability to recommend appropriate professionals. It is very common for managers to assume that developer board members do not need their advice or the advice of any outside professionals. Like managers, many developer board members have no actual expertise in the systems and components the association is responsible for. They will certainly rely on the community manager for that, so the management of their expectations is critical. Start with a Plan Every great operation starts with a plan. Community managers have the resources through the com- munity association industry to be the “quarterback” in creating this plan for developing communities. There are hundreds of professionals in the industry who focus on drafting critical components like maintenance manuals, preliminary reserve studies, etc. Managers should assume that clients do not know these professionals exist. If clients believe the manager will give them the same work product for “free,” they will of course relay that as an expectation. Carefully managing that expectation is critical to a manager’s success, and ultimately, the success of community associations. 28 FOUNDATION.CAIONLINE.ORG  COMMUNITY ASSOCIATION MAINTENANCE COMMUNITY TRANSITION ISSUES AFFECTING MAINTENANCE Over the life of most communities, changes in board and committee members, a manager or a management company, maintenance supervisor, employees, and service providers can result in a lack of historical knowledge and the continuity of maintenance plans. This can negatively impact the effectiveness of maintenance, resulting in increased costs and a decrease in property values. Each of these changes affect the continuity of maintenance because there could be a failure to transfer knowledge from one party to its successor. The community association industry is unique in that it lacks the internal continuity that generally exists in commercial business operations. The owners of businesses normally develop “institutional memory” because of their long-term involvement. In contrast in the community association industry, it is difficult for associations to develop institutional memory because of continual change. This lack of continuity disrupts the transfer of knowledge from those who have gained knowledge to their successors. Lack of documentation and the failure to properly retain or turn over documenta- tion are the primary reasons for this knowledge transfer void. Further contributing to the documenta- tion issue is that accounting systems are geared toward the annual cycle. Accounting systems general- ly don’t retain multiyear data or information in a meaningful form to assist the long-term maintenance process. Creating a maintenance plan provides the guidelines but does not provide documentation of the program. It creates the plan and shows how the plan should be implemented but does not document if the planned maintenance procedures were actually performed. Maintenance documentation. Documentation of maintenance procedures and work performed represents the knowledge about the maintenance process that has accumulated over time. This doc- umentation can be passed from one person to another during any change in project oversight and represents the institutional knowledge that is lost in too many situations. The collection and transfer of maintenance procedures and work performed is a critical step that should not be overlooked. There are two methods documenting maintenance activities planned and completed: 1. Paper-based checklist. 2. A digital approach using computerized maintenance management system software. FOUNDATION.CAIONLINE.ORG 29 COMMUNITY ASSOCIATION MAINTENANCE The paper-based checklist approach is used by many because it is both simple and inexpensive. However, it can What to Include be cumbersome, inflexible, and difficult to store. Documentation of maintenance The software approach is more powerful and flexible as procedures should include: changes can be made on the fly but also is more expensive. Maintenance software is widely used outside the community Procedures performed association industry but has not gained any visibility within it. Date performed Maintenance software has existed for decades. While there Who performed the are still some versions available for individual computers, the procedures majority have moved into cloud-based versions. Notes or results of procedures Associations must consider the legal consequences of documenting or failing to document maintenance proce- dures performed. A question has been raised that if a main- tenance plan exists, but the association then fails to perform the maintenance procedures indicated, that it has created a liability for failure to perform the duties of a prudent businessperson. That is a question that the lawyers must answer, but there is a recent situation of board members being sued by homeowners for failing to perform certain maintenance procedures that had a direct, material, negative impact on property values and safety. 30 FOUNDATION.CAIONLINE.ORG  COMMUNITY ASSOCIATION MAINTENANCE RESERVE STUDIES AND MAINTENANCE: THE INTERSECTION A reserve study is a budget planning tool that identifies the components that a community association is responsible to maintain or replace.5 The preparation of a reserve study is based on the International Reserve Study Standards of the Community Associations Institute (CAI-RSSTD 12-22), which have a number of references to the need for maintenance. While a reserve study is not a maintenance plan, the replacement of various common area com- ponents that may be included within a maintenance plan may be included within the reserve study for funding. The selection of these components is described in detail within these standards. The importance of maintenance is included within these standards in the following ways: 1. The preparation of a preventive maintenance plan is not typically included within the scope of a reserve study. 2. The standards confirm that “in addition to the reserve study, in order to properly evaluate and budget for the ongoing care of the common area components as well as the structural safety of the community, a proactive preventive maintenance plan as well as ongoing periodic struc- tural inspections must be incorporated into the community’s long-term planning.” 3. The standards recommend that in addition to the reserve study, a community have a preven- tive maintenance schedule prepared as a supplementary report. 4. The standards include definitional information for preventive, deferred, and corrective mainte- nance along with the benefits (or detriment) of each. The standards require that the reserve study include disclosures in regard to whether the commu- nity has a preventive maintenance plan and that the establishment of the remaining useful lives of the components included within the study be adjusted to reflect the existence of this plan. The grid below is an attempt to graphically illustrate that reserves represent only one fourth of maintenance activities but a much more significant portion of maintenance dollars. Low cost assets/Components High cost assets/Components Operating Maintenance Operating Budget Operating Budget Activities $ $$$ Reserve Budget Major Repairs or Operating Budget Reserve Study Replacements Activities $$ $$$$$$$ 5. International Reserve Study Standards of Community Associations Institute FOUNDATION.CAIONLINE.ORG 31 COMMUNITY ASSOCIATION MAINTENANCE FINANCIAL IMPACT OF MAINTENANCE PLANS A maintenance program that implements the maintenance procedures of a professionally prepared maintenance plan will reduce life cycle costs. As you can see from the grid above, the issue that we face is trying to capture the total life cycle cost of the common elements. The way for any organization to begin to capture its cost of operations is to first start with clear and consistent data. One. The asset inventory is the first step in understanding and capturing cost data. In the community association industry, the reserve study is a good first step in identifying assets. However, as indicated in the grid above, identifying reserve assets may capture only half of the assets you need to identify. It is important that from a life cycle cost perspective that you also identify assets that are not included in the reserve study. If the association has a maintenance plan, it should identify the additional components that are not included in the reserve study, such as the structure of the building. This asset inventory is only the first step. Two. Now you have to identify and estimate costs associated with each of these assets. From a total cost of operation standpoint, you may consider costs such as energy, janitorial, and equipment rental of certain items. However, from a maintenance perspective, you simply need to identify the preventive maintenance activities and the major repair or replacement activities. This step is referred to as the measurement step because you were measuring the cost that you need to know for evaluating total life cycle costs. The measurement information you accumulate in this process is data, and that data is very valu- able to the association. Without that data, you are Cost Factors simply guessing. Accumulating this data also allows When analyzing preventive maintenance you to establish benchmarks to evaluate efficiency costs, a number of factors come into play, of maintaining versus replacing. A professionally including: prepared maintenance plan should help identify all the maintenance procedures that are necessary for Age each asset or group of assets. Identifying the cost Moisture of these procedures is what will help you measure Original construction defects your life cycle costs. Prior maintenance failures Wind damage The association may want to first evaluate Deferred maintenance whether any changes could or should be made that Excessive penetrations in roofing would affect current costs and allow for savings. or siding The association also may want to consider the loca- tion of the various assets as that can have an impact on life cycle costs. 32 FOUNDATION.CAIONLINE.ORG  COMMUNITY ASSOCIATION MAINTENANCE Three. Asking the right questions is the best way to determine the association’s carbon footprint, finan- cial, ma