An in-unit inspection and maintenance program can bring tremendous benefits to community associations. A careful analysis of each situation is needed to determine if and how a program should be undertaken.
Condensation drain line back-ups can result in thousands of dollars in damage. Leaky valves left unattended may result in the need for mold remediation. Burst washer hoses and rusted out water heaters could easily result in a significant master policy claim. One faulty smoke detector can result in injury or, worse yet, loss of life.
Can associations prevent such things from happening? Of course not. But a systematic in-unit inspection and maintenance program can go a long way to avoid or mitigate them. This may be an opportunity to prevent damage and control expenses. In-unit programs can also contribute to energy conservation, quality of life, and value to association membership.
Why Not A “Risk Management Inspection Program?”
Many high rise buildings have a seasonal filter change program. Why stop there? Why not use this as an opportunity to address other conditions and provide value to the members? Take the opportunity to raise awareness of potentially problematic conditions and assist unit owners to fulfill their duty to maintain? The list should include everything from tub grout to smoke detectors.
4-Point Analysis
1. Risk Management Analysis – Property Configuration: What kind of community is it? Will conditions in one home create problems for other homes or the Association as a whole? This kind of program would not apply to single-family home HOAs. High rise condominiums and cooperatives would undoubtedly benefit. Mid-rise and garden communities might also benefit.
2. Risk Management Analysis – Component Exposure: What are the elements in units? What damage could those elements cause? What are the potential soft and hard costs of that damage?
3. Resources: Is there on-site staff? If so, what are their capabilities and time constraints? Are contracted services an option?
4. Legal Considerations: A careful reading of the governing documents is required gain clarity on the ownership and maintenance responsibility for unit components. What is the Association’s authority per its governing documents and prevailing law? What liability considerations exist? These factors will play a part in how a resolution establishing the program is worded. Review with Association Counsel.
Implementing the Program
1. Using the 4-Point Analysis, decide on the intensity of the program. The scope could be as simple as an inspection followed by a report of findings to owners. This could also be an opportunity to check the condition of balconies and for early evidence of water damage from exterior sources a resident may not have noticed. Or it could be more extensive to include the performance of maintenance tasks such as filter changes, toilet flapper replacement, smoke detector replacement, or water alarm sensors.
2. Document the program as a policy (legal assistance is strongly recommended), and include inspections list and procedures.
3. Communicate, communicate, communicate the plan and its implementation. Highlight the reasons for, and benefits of, the program. Please do NOT send the message that this as a rule that must be followed. That would blow the opportunity for a very positive message.
4. A plan for following up is vital. The Board should decide in advance how to handle non-compliance.
Bonus Points
Some Community Associations have mitigated risk by implementing a policy to clarify and define unit owner maintenance responsibilities. The Association may be able to require the use of components that control loss. A braided ice-maker line is far less likely to fail than a plastic one. Heavy duty clothes washer hoses are less likely to burst than standard hoses. The Association may be able to require proactive replacement of high-risk components based on age of the component, such as for water heaters. Once you’ve identified the components in units at your community, consult with Association Counsel to craft the resolution. There may be pushback from some owners. Here again, communicating from the perspective of benefit to the owners and highlighting the benefit to all makes all the difference.
Too Much Work?
It may seem like adopting a comprehensive in-unit risk management program is too much work. But think about this – what can happen if you don’t do it? How much administrative and maintenance staff time is sucked up when emergencies happen? What happens to master insurance premiums when the loss history is littered with water or other damage? How many unit owners or their tenants have an awareness of how the components of their units work or should be maintained? Thinking about these factors when conducting your 4-Point Analysis may help you to see this as an opportunity to benefit members, the Association, and staff. If so, it’s not an expense. It’s an investment.