Posts from CAI Advocacy Blog for 11/03/2021
From: CAI Government Affairs (governmentcaionline.org)
Date: Wed, 3 Nov 2021 12:37:07 -0700 (PDT)
Follow up study on the collapse in Florida:

Key sentence:  One effect of insufficient reserve funds is the lack of funds to 
address structural issues but for most experts lack of maintenance is the 
larger problem. 

*****The greater issue with deferred maintenance is that it only grows in 
scope—and cost—the longer it is deferred, resulting in 30 times the cost to 
repair versus keeping up with routine maintenance, according to Stanford’s 
report.*****

A summary of the public policy positions are detailed below. The full 
Condominium Safety Public Policy Report: Reserve Studies and Funding, 
Maintenance, and Structural Integrity is available:

https://goo-gl.me/oEYVB

Sharon

CAI Releases Public Policy Recommendations to Improve Condominium Safety
By Dawn Bauman, CAE on Nov 3, 2021

Following the tragic partial collapse of Champlain Tower South in Surfside, 
Fla., in late June, CAI convened three specialized task forces to explore 
changes to laws and best practices for the community association housing model 
that could help other communities prevent a similar event and to provide 
solutions for legislators addressing building safety in their districts.

More than 600 people participated in this three-month process to identify clear 
recommendations through conversations, surveys, research, and interviews. CAI 
brought together reserve analysts, attorneys, insurance and risk management 
professionals, developers, engineers, architects, community association 
managers, and homeowner leaders to provide their expertise. Outreach also was 
made to experts in a wide range of disciplines and from numerous organizations 
to help inform these recommendations.

An important consideration in this process was meeting the demands of multiple 
stakeholders, including: state legislators seeking to introduce legislation in 
2022; congressional representatives considering immediate solutions for their 
constituents; federal housing finance agencies aiming to mitigate their risks; 
private insurers; and homeowners and residents in condominiums and housing 
cooperatives expecting to feel safe in their homes.

The public policy recommendations are in the areas of reserve studies and 
funding; building maintenance; and structural integrity. CAI believes these 
recommendations should be considered for adoption into state law to support the 
existing statutory framework for the development, governance, and management of 
community associations.

A summary of the public policy positions are detailed below. The full 
Condominium Safety Public Policy Report: Reserve Studies and Funding, 
Maintenance, and Structural Integrity is available now.

https://goo-gl.me/oEYVB

Reserve Studies and Reserve Funding

According to the Foundation for Community Association Research’s Breaking Point 
report, 80% of community association managers, board members, and service 
providers surveyed felt it was critical that their association have adequate 
reserves in the event of a major infrastructure failure or construction need.

Although not intended to evaluate existing building conditions or to specify 
corrective repairs, reserve studies are a planning tool to assist with 
budgeting for replacement or substantial repairs based on a component’s 
remaining useful life. It’s unclear if updated standards in this area would’ve 
prevented the collapse of Champlain Tower South, but it’s important to educate 
legislators and other stakeholders about the purpose and importance of reserve 
studies and reserve funding plans.

CAI recommends statutorily mandating reserve studies and funding for all 
community associations. The recommendation in the full report provides details 
to help communities prepare for and a timeframe to practically transition to 
these new requirements to avoid financial strain on homeowners and the 
association. The Foundation’s Best Practices Report: Reserve Studies and 
Reserve Managementprovides excellent procedures pertaining to reserve planning 
and funding for homeowner leaders and community managers to put into practice 
immediately.

Building Maintenance and Structural Integrity

Nearly half (40%) of those surveyed in the Foundation’s Breaking Point report 
considered deteriorating infrastructure as a top-ranked concern, while 70% 
indicated that maintaining property values was of primary importance.

As a building ages, the cumulative cost of operating and maintaining facilities 
significantly impacts the overall budget, not just the maintenance budget, 
notes a recent report from Stanford University titled Guidelines for Life Cycle 
Cost Analysis. *****The greater issue with deferred maintenance is that it only 
grows in scope—and cost—the longer it is deferred, resulting in 30 times the 
cost to repair versus keeping up with routine maintenance, according to 
Stanford’s report.*****

CAI recommends additional requirements by developers during the development 
process and prior to transition to the homeowners. CAI worked closely with 
developers on these recommendations. Structural integrity is addressed through 
statutorily mandated building inspections starting when the building is 10 
years old, another inspection at 20 years, and every five years thereafter. 
Inspections are based on the American Society of Civil Engineers’ (ASCE) 
published protocol for building inspections (ANSI).

Local building inspectors play a key role in the execution of structural 
integrity public policy. Those with the authority to provide a certificate of 
occupancy and otherwise condemn a building have the authority and obligation to 
inspect a building’s structural integrity.

These policy recommendations provide support to community association elected 
boards and urge them to follow the advice of professionals, especially in 
circumstances that are related to life, health, and safety. They also must be 
supported by strong best practices for community association leaders, 
particularly condominium and cooperative board members.

CAI continues to develop additional guidance and best practices for condominium 
and housing cooperative boards, their managers, building inspectors, 
developers, accountants, reserve analysts, and other stakeholders. Model 
statutory language supported by the policy recommendations outlined in the 
report will be released later this month.

The post CAI Releases Public Policy Recommendations to Improve Condominium 
Safety appeared first on CAI Advocacy Blog.


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