One Structural Problem with Two Projects to Manage

On almost every HOA reconstruction project we encounter the same types of challenges to one degree or another, and these challenges would be no different for a seismic upgrade project.  First is the “political” aspect of a project, which entails explaining to the homeowners the necessity for the project in such a way that they will understand and approve.   Under the best of circumstances, if not managed effectively and efficiently, a project can quickly “go south” making the task of the Board obtaining approval of the membership that much more difficult.  Even a small number of disgruntled or dissenting homeowners voicing opposition to a proposed project can sometimes begin to turn public opinion.  Whether this opposition is due to these folks not wanting to spend the money or not seeing the value or necessity of a project, or if they’re simply contrarians, their concerns need to be addressed in a timely manner before a majority of the membership is unduly influenced.  That’s where strong project management and leadership become critical to the ultimate success of a project.   A competent construction manager would implement a system for educating homeowners by holding town hall meetings, sending newsletters and emails and through updates on an accessible website to bring the membership “on board” with the project.   Helping the Board explain the project in such a way so as to allay any misgivings members may have will aid in obtaining the consent and approval of the members.

The second aspect of a project – the actual construction – although no less important is in some ways easier for the Board than the first since it is less emotional.  This task is also made easier if the Board has utilized qualified third party expertise in facilitating homeowners’ understanding of the project as outlined above.  A well-qualified construction manager will assist the Board with all phases of the construction process, from initially defining the scope of the work, to obtaining bids from pre-qualified contractors and preparing contracts, to overseeing the construction and the invoicing process, through project close out.

Because of the potential liability of a structural retrofit project HOA Boards would be well advised to rely on the expertise of an experienced and qualified construction manager.  The Board can then have peace of mind knowing that they have a knowledgeable advocate on their side for all construction related issues and experienced management to assure them that the work is being completed properly.   Earthquake retrofitting projects are no different than other reconstruction projects in that they need strong, knowledgeable and experienced leadership from a construction manager to see them through to successful completion.

One Structural Problem

 

Is That Balcony a Death Trap?

Okay, maybe that is a little extreme, but people have a reasonable expectation when they walk up a set of stairs or out onto a balcony that there is no risk involved.   And of course that’s how we should feel, but after reading headlines like “2 Killed, 29 Hurt When Malibu Balcony Falls”, or “6 Dead, 7 Hurt in Berkeley Balcony Collapse” maybe we should think again.   According to the U.S. Consumer Product Safety Commission’s National Electronic Injury Surveillance System it is estimated that over a five year period 224,740 people were injured due to deck, porch or stairs accidents and of those 33,000 were “serious” injuries including head trauma, concussions, major fractures, and paralysis.  

The North American Deck and Railing Association estimated half of the 40 million residential decks and 10 million commercial decks in the United States are more than 25 years old.  Since most decks or balconies are continually exposed to the elements the actual expected life span is likely to be 10-15 years, depending on the materials and methods used and assuming that there is proper maintenance along the way.  As these statistics demonstrate, this should be a serious issue for property owners or anyone involved in property management, considering the potential liability.

As a construction management consultant we frequently encounter decks, balconies and stairs in homeowner associations that require substantial repairs and structural replacement, generally due to a lack of routine maintenance.  On several occasions the balconies were such a hazard that Building & Safety actually issued “red tag“ correction notices until a plan was put in place to make the repairs.  On one project which was less than 10 years old homeowners had actually stepped through the cantilevered decks, which were 20 to 30 feet out over a hillside.  This occurred  because the original improper installation allowed water to become trapped within the structure.   In this case, and likely the Berkeley collapse (see photos), the damage that is occurred to the structural members which are covered up may not be readily evident by a quick visual inspection.  That is where a trained and knowledgeable expert may be required to make a thorough inspection of the balcony and all of the waterproof connections.   Poor construction methods as well as lack of maintenance can lead to severe wood decay, which can occur in just a few years.

Another issue we see is dangerous stair conditions, either because they have started to rot and are not structurally sound or because they don’t meet the code requirements for the height or the width of the treads and risers and as a result are a tripping hazard.  Stair handrails and balcony railings which have become loose due to dry rot and/or lack of proper attachment are another common safety concern.

The good news is that structural failure of decks and balconies is 100 percent preventable.   However, there are steps that must be taken to assure this is true. (For the purpose of this article we will assume that the structure was properly designed and met all building codes at the time it was constructed.)  Knowing that all structures have a defined life expectancy but do require periodic maintenance, let’s look at what the proper course of action should be when managing a property that includes decks, balconies or exterior stairs.

Some simple questions will help decide whether further investigation should be performed:

  • How old is the property? – This will provide some knowledge as to the life cycle of the structures and the building codes under which they were likely constructed. As a general rule of thumb, barring construction defect issues, the expectation would be that the newer the structure the better condition it should be in.  Age, gravity and exposure have an effect on structures much the same as they do with the human body.
  • Does the association have a reserve fund for maintaining these structures and is it adequately funded? – This is an indication of whether the association has a proper understanding of the importance of maintenance of these structures.
  • Do the association’s records indicate that these structures have been maintained on a timely basis? – This will show whether the proper maintenance has actually been performed as recommended.

Based on the answers to the above questions what are the next steps that should be taken?  Below is a quick and simple checklist of 10 items to consider when inspecting decks, balconies and stairs:

  • Should a construction consultant or licensed contractor be included in the inspection, or is the property manager comfortable with this task? The answer to this question may depend on the construction knowledge of the property manager and their willingness to take on that liability, responsibility, and the age and general condition of the structures.
  • Are the railings well attached and sturdy or are they weak and showing signs of deterioration at the deck connections?
  • Are the railings adequately safe for small children, pets and adults alike? Do they meet the current code requirements for rail height and baluster spacing?
  • Does the deck surface seem rigid and solid or is it soft and spongy in areas?
  • If the decks or stairs have a waterproof coating is it in good condition or has it deteriorated – does it show signs of splitting, peeling, cracking or chipping? Are there cracks in the surface or is there any other deterioration that could be allowing water into the structure below? Is it keeping the water out of the structure below?
  • If the deck is not a solid waterproofed structure and is open for water to pass through it, is the decking material in good condition, showing no signs of sagging, dry-rot, termites, etc.
  • Are the waterproofing connections around the perimeter of the deck in good and watertight condition? This would include the deck–to-wall transition, the thresholds at any door openings, and any post–to-deck connections.
  • How is the structure supported – is it an integral part of the building or is it self-supported? Is the structural support being kept dry or is it exposed to the elements? If self-supported, how does the structure under the deck look?  Are there any signs of deterioration or termite damage at either the support-to-deck attachments or at the foundation-to-support attachments?
  • Are the structural supports buried in the soil? The vertical support rising up from the concrete foundation should not be in contact with the surrounding soil.
  • Are the foundations solid or have they been undermined by erosion or pests?

In general it is recommended that decks, balconies and stairs be thoroughly inspected at least annually, property maintenance be performed as needed, and the inspection and maintenance expenses should be part of the association’s annual budget.  Needless to say, those costs are minimal compared to the expense and potential liability involved in structural failure of these components.

Properly maintained, your decks, balconies and stairs will be safe and sound for everyone to use and enjoy for years to come.

Dennis Brooks can be reached at DennisBrooks@dbuild.com

Is-That-Balcony.pdf

 

Tough Choices, Good Decisions

 

The Board of Directors debates – but “The Process” is even more important!

The Board knows they are facing a project that can’t be put off any longer.  The time has come to get it done! Past boards may have put it off because of a lack of funds, or because some were terrified by the thought of going to the homeowners, or they were just overwhelmed at the thought of dealing with the mess of a construction project . . .

 

Tough Choices Article

Fact or Fiction

Over the last 30 plus years we have heard many HOA boards of directors and even some community managers state reasons why they decided not to involve a construction manager (CM) in their project. Although many of these reasons may seem appropriate on their face, oftentimes they indicate a lack of understanding of what exactly a construction manager does and the value they bring to a project.  Let’s look at some of these stated “justifications” as to why a board or community manager may think a CM is not necessary for their project.

“Our project is too small to require the services of a CM.” – Certainly not every small project requires the services of a CM.  How small is too small and should size of the project be the determining factor?   It’s true that it may not be appropriate to hire a CM for a small project that is not very technical in nature.  On the other hand, a small project which is very technical, such as changing out a boiler or upgrading an elevator,  may very well benefit from consultation with a CM.   The old adage “it’s what you don’t know that can hurt you” comes to mind here.  Sometimes a seemingly simple project can mushroom into a costly, major ordeal as the result of unforeseen factors such as building department requirements, new codes or regulations, selection of the wrong materials, etc.   It never hurts to take the time for a consultation with a construction manager to determine what issues might become a problem as the project progresses.

“Our Community Manager can handle the CM responsibilities.” – The community manager may be very good at what they do and have years of experience but there are numerous considerations if an association decides to have the community manager take on the role of CM.  Likewise, the community manager should think long and hard about their liability and exposure, as well as that of their management company, by acting as a CM.  A community manager cannot be expected to have the expertise required to oversee a large or complex construction project, not to mention that they likely don’t have the time necessary to make site inspections, review the endless communications between homeowners, contractors and other professionals on the project and deal with the minutiae of the day to day project activities.

A quality CM will have a background in general contracting, architecture or engineering, and hold the associated licenses and should always have professional liability (E&O) insurance. They would also have the knowledge and experience to put together a complete bid package to ensure that all the bids are complete and comparable.  We all know of cases where the community manager or board asks a contractor for a proposal and then uses that proposal as a “Scope of Work” document in order to obtain additional bids.  The reality is that if the board or community manager is not familiar enough with the proposed work and needs to ask a contractor for a scope of work document, they will not likely obtain consistent bids.  Are the materials specified in sufficient detail that all the bidders will be bidding exactly the same materials?  Are they the right materials for this project?  Is there any definition as to method of installation? Typically a contractor’s proposal, if not based on an independent scope of work, is very general in nature.  That scenario gives the bidding contractors flexibility to change materials or methods without violating their proposal, which is a huge advantage to the contractor, but probably won’t match the quality desired and expected by the association.  If that proposal is used as the scope to obtain other proposals they are likely not going to end up equal.  Although this gives the appearance of obtaining the necessary number of bids it is very likely that these bids are not really comparable one to another.  This also opens up the board and community manager to criticism and potential liability.  Hiring a CM to prepare a proper scope of work and establish a proper bid form and procedure to handle any contractor questions so that all bids are based on the same materials and installation methods will assure consistency in the bids and the basis for a quality contract with the selected contractor.

“Our General Contractor will handle the responsibilities of a CM.” – One of the most important functions of a CM is to provide the HOA with an unbiased professional opinion concerning the contractor’s work and responsibilities.   If the contractor is going to be providing these CM services there is a built-in conflict of interest.  Ideally the CM would be brought on board before the contract is prepared and issued to the general contractor, as there are many nuances to a construction contract that if mishandled can lead to cost overruns and schedule delays.  The CM will also review the contractor’s insurance, monthly invoicing and lien releases to verify that they are appropriate and correctly completed.  And the CM will verify the validity and cost of any change orders and the impact on the construction schedule.  Who would the HOA turn to if they are unsure about the information provided by the contractor?  It is best to avoid these conflicts of interest whenever possible.

A CM may also suggest value engineering alternatives – methods and materials that may save the association thousands of dollars. How far down the road might the project be when it is discovered that there may have been a better way?  A good CM would also notice an improper technique or material application on site and help correct it before it is repeated over and over again, possibly creating the next construction defect litigation case.

“Construction projects always cost more than expected.” – It is true that many times there is not adequate planning or understanding of a project before construction starts and most often this leads to unexpected costs.   If the person or persons responsible for pulling the project budget together do not have a great deal of experience and knowledge associated with the various aspects of the project, costs can and do quickly spiral out of control.  The budget is made up of more than just the contractor’s bid.  Typically it would include the cost of permits, possibly an architect or engineer, a hygienist and/or abatement contractor, financing costs and of course the all-important owner contingency.   The contingency amount is determined based on the experience of the person putting the budget together.  Is this is a wood siding, balcony railing, dry rot and replacement project, or is this a repiping project?  The contingence for different types of projects is very different for many reasons which we won’t go into in this article.  However, an experienced CM should know how to advise the association when it comes to completing a proper and well defined budget with an appropriate contingency.  No board or community manager ever wants to go back and face the “political cost” of a budget shortfall and additional assessment.  Projects do not have to cost more than expected if the proper expectations are established during the bidding, budgeting and contract writing process.

A CM offering good, sound advice, helping the HOA avoid costly mistakes, establishing a well thought out budget with an appropriate contingency, using a quality contract can easily save an association more than their fees for the project. Conversely, decisions concerning the use of improper or poor quality materials or installation can cost the association huge sums of money in the form of shortened life expectancy of a product, damage to building interiors from improperly installed waterproofing materials, the selection of the wrong materials altogether, or even the extreme costs and frustration of defect litigation which will involve many experts and attorneys and take months if not years to resolve.

There are many other areas where a quality CM can save the association money by helping to prioritizing repairs, accounting for life/safety, water intrusion and aesthetic issues, so that the repair budget is spent wisely. Assisting in obtaining the required membership votes for project approval by holding town hall meetings with PowerPoint presentations to help inform the members of the need for and cost benefit of the project.  Lastly, a qualified CM will have contacts in the finance world and would be able to assist the association in obtaining a loan to accomplish the work, if that need exists.

Hiring a professional and qualified CM is actually the most prudent and in many cases the least expensive alternative, all the while providing the HOA with the peace of mind that they have independent, professional representation to assist them with their project.~

Dennis Brooks is the president and founder of Design Build Associates, a construction management consulting firm specializing in HOA reconstruction projects with offices in Westlake Village and Irvine.  He can be reached at DennisBrooks@dbuild.com

 

Why Construction Management?

We have found that many associations are not fully aware of the duties and responsibilities of a construction manager, and are therefore hesitant to hire one, because they feel that they are just adding an additional layer of cost to the project.

Regardless of what caused the problem that you’re facing, i.e., construction defects, a catastrophic event, or just deferred maintenance, the solutions are not always as simple as they might appear. There are many complex issues that must be considered and dealt with properly in any construction project of this nature for the project to be successful.

Who will handle the following issues?

  • Design, engineering and budget requirements
  • Analyze the feasibility of materials, methods and other construction factors relating to cost
  • Coordinate contract documents, drawings, specifications and schedules
  • Qualify and coordinate contractors, either general or specialty contractors
  • Hold a pre-bid conference and/or explain the project to the contractors
  • Receive and analyze the bids for correctness and adherence to the specifications
  • Secure the construction contract and schedule
  • Coordinate the contractors’ activities to meet the association’s needs
  • Review the work in progress to verify compliance with contract specifications, schedules and invoice requests
  • Review change orders for accuracy and reasonableness
  • Maintain cost accounting records
  • Make sure lien releases are the proper release and correctly filled out
  • Provide interpretations and resolutions to issues that arise
  • Verify certificates of insurance for each contractor
  • Review and identify problems with a contractors license
  • Review and approve product samples, shop drawings, or other submittals
  • Conduct final inspection of the project and develop a “punch list”
  • Verify the receipt of all guarantees, affidavits, releases and manuals

This list could go on and on.  The point of this is that someone must first know that these items (and many others like them) need attention and then must have the expertise to make sure that every item is properly addressed.  Any one of these issues that is ignored or left to chance creates a potential for a much larger problem.

Your association would never consider defending itself in an accident liability case, and yet a disastrous construction project could easily cost you the same in damages. In either case you must have expert representation!

And, don’t think that the contractor that you hire is the one to do this for you. He has a profit motive while your motive is to accomplish the highest quality job at the least expensive price. The conflict between these motives is one that must always be kept in check by a knowledgeable advocate of the owner.  In my experience most homeowner association boards are made up of intelligent, well meaning individuals.

However, these same individuals are generally not experienced at the business of managing a construction project, nor are they generally knowledgeable as to the laws and practices of the industry. Rarely do they have any experience when it comes to judging the construction materials, methods and techniques used by various construction trades.  These same concerns would apply to your management company.  Although some management companies are somewhat familiar with the process involved, many are not.  Most management companies work hard to handle their daily tasks for the association and are not experienced construction managers.  Once a management company handles a large reconstruction project for an association they quickly understand that this is a very specialized process that takes a great deal of time.  It is a process that they are generally not equipped for and the typical management fees in no way cover the added work and responsibility of dealing with all the project issues.

In my opinion, it is also very important that the construction manager not be contractually or in any other way related to the contractor.  There are contractors who will represent that they will handle both the duties of the construction manager as well as that of the contractor.  There are also construction managers that will want to contract directly with the contractor.  When either of these contractual conditions occur, there is great potential for a conflict of interest to arise.   It is therefore my further opinion that the construction manager should be directly contracted to the homeowners association as an agent for the association working on the association’s behalf.  Likewise the contractor should be hired directly by the association and paid directly by the association but managed by the construction manager.  This arrangement greatly reduces the exposure for any conflict of interest between the contractor and the construction manager.

A competent construction manager should have strong communication skills and should have experience dealing with a wide range of individuals who can impact the outcome of your project.  The following graphic demonstrates many of the relationships that a construction manager could have to deal with during the course of a project.

Why-CM-Images

If your association is currently contemplating major reconstruction of any kind, do yourself and your association a big favor and consider hiring a knowledgeable advocate to help you through the process.  In my experience a qualified and competent construction manager will provide an association with all that is necessary to achieve quality construction, a timely and well organized construction schedule, and cost savings.  All this while giving them the peace of mind that they have made and are making the right decisions every step along the way.

Written by Dennis E. Brooks and Published in the May/June 1999 CAI Channels of Communication magazine.

Communication, Collaboration and Cooperation

Good Communication Takes Leadership

By Dennis Brooks, Design Build Associates, Inc.

Good communication takes leadership. Does your homeowners association have a strong communication process so that you can keep the homeowners informed? During a reconstruction project it is especially critical to communicate well with the homeowners. Efficient and effectively managed projects focus almost as much on communication during a project as they do on the construction details themselves. Collaboration and cooperation occur through communication. It provides the shared understanding that enables everyone to work together toward a common goal.

Effective project communications need to be more than just a reaction to what is about to take place. It requires leadership and planning to accompany the project goals. As the saying goes “If you fail to plan, you plan to fail.” Establishing a plan to communicate your project to homeowners is no different.  It is essential. Making the plan up as you go may work for small projects, but any major project contemplated by your association needs careful and thoughtful planning.

A successful project always involves effective communication with the homeowners. Sometimes what is said is not what you thought was said, or at least what you thought you heard said isn’t what was meant; communications can be very confusing as times. Effective communication takes effort, and it takes time to work through the process. Who has time these days? We all seem to communicate more via e-mails, IM’s, texting and now even twitter.  But is anyone really listening? Or a better question is; does the receiver of the message understand the message? Is the information really getting through? Is it being understood in the way we intend it to be understood? If not, we need to work on the communication process.

This is not always as simple as it may seem.  As George Bernard Shaw stated – “The single biggest problem in communication is the illusion that it has taken place.”

The-communication-processHow many times in our dealings with people do we find that there are misunderstandings or confusion about a subject that we thought had been clearly communicated? Our goal should always be to minimize the confusion and frustration by making sure that the communication process is clear and concise. It needs to be accurate in order for it to accomplish the desired result.

Effective communication results when the sender or “source” of the information or “message” and the “receiver” of the message clearly understands the message.

When starting a major project there are many questions that need to be answered. What work is going to be included in the project? Can we handle this work on our own or do we need some expert assistance? How will we pay for these repairs? What if we can’t gain the support of the homeowners? This list of questions can go on and on, and each question is significant.  The response to those questions may have considerable ramifications as to the successful outcome of the completed project.  It is important to understand that there are numerous ways to accomplish the same goal. Collaboration with the Board is necessary to define the project’s goals and direction. The challenge then becomes to clearly communicate the goal and direction to the membership. Strong leadership is very important to this process. Usually, projects require a homeowner source of funding that mandates a vote of the membership. For the membership to vote affirmatively, it is essential that the project goals be clearly defined and understood. This is usually a very critical juncture in the process of moving a project from planning to actual construction. If communications breakdown it is likely that the project will not proceed. Consensus must be built; this will only happen when the communication process is clear, causing an accurate understanding, cooperation and trust. Due to the many legal, technical and financial issues that arise during these projects, it is imperative that the communication process builds this necessary trust and confidence between the source and the receiver.

Another important aspect of building collaboration and cooperation on a project such as this is to actually do what you tell the membership you will do. This not only applies to the many tasks required to get a project started, it also applies once the work has started. A well run project will have a job schedule, and with proper oversight, the schedule will be maintained. When the project schedule is maintained it demonstrates to the homeowners that there is accountability.

All communications are not necessarily pleasant ones.  Sometimes you will need to confront harsh reality.  At these times, it is best not to skirt around the issues but rather to be clear and direct (while always remaining respectful and professional).  It is better to address hard realities as they arise rather than hope that somehow they will go away; they never do.

One thing is certain; proper communication takes time and effort.  It is a process that should be continual. It is also important to note that communication is a two way street which includes both speaking and listening. Listening provides the necessary feedback to complete the communication process.  It helps to build trust and it assures the homeowners that all of their issues are being considered.

Stephen M.R. Covey makes an excellent point in his book The Speed of Trust that when trust is down, speed is down and costs go up.

                ↓Trust   =  ↓Speed   ↑Cost

When trust goes up, speed will also go up and costs will go down.

                ↑Trust   =  ↑Speed  ↓Cost

Examples of this are all around us in our society. When there are trusting relationships built, things happen at a much greater speed and with much greater efficiency. However, poor communication can lead to a lack of trust, causing work to slow down due to verification requirements and other strictures. In the end, this is always more costly than it would have been if there was an efficient communication process, which develops a trusting relationship and an expedient well orchestrated project.

Therefore, work to communicate in such a way that builds trust.

  • Be honest, tell the truth.
  • Let people know where you stand.
  • Use simple language.
  • Call things what they are.
  • Demonstrate integrity.
  • Don’t manipulate people or distort facts.
  • Don’t leave false impressions.

The “process” must be trustworthy – do what you say you will do.  Deliver results consistent with what you have communicated.

Tell them what they can expect, and then deliver what you told them. This is a good formula for a successful project.

It is also a good idea during this communication process to remember what Carl Buechner said concerning this topic; “They may forget what you said, but they will never forget how you made them feel.”

In summary, effective communications will build trust, collaboration and cooperation regardless of your project.  With these attributes working for you, your chances of completing a successful project will increase dramatically.

The Conundrum of Deferred Maintenance

Conudrum of Deferred MaintenanceThe term “deferred” means to put something off until a later time, while the word “maintenance” is defined as work that is done regularly to keep a building, or piece of equipment in good condition and working order.  This begs the question, how does someone put something off until a later time while doing it regularly?

At a recent homeowner association meeting where extensive deferred maintenance issues were being discussed, we had invited a local real estate appraiser to address the membership concerning several different renovation options (and therefore costs) associated with the much needed repairs.   In his opening remarks to the membership he bluntly stated, “The problem with homeowner associations is that the members have an ownership interest with an apartment mentality.”  At the time I thought that statement was pretty harsh, but looking back over the past 23 years of consulting for homeowner associations I believe he has a point.  Although I understand that this is quite a generalization, there are many aspects of his statement that ring true.

The Conundrum of Deferred Maintenance (Article printed in Channels of Communication, Third Quarter 2006)

Supporting Homeowners Associations from Conception to Completion

US Builders Review

US Builders ReviewIn 1983, Dennis Brooks got an opportunity of a lifetime. After completing his undergrad and masters program in construction and business management at Colorado State University, he went to work for a large commercial development firm. “The partners of this firm decided they had made their money and wanted to get out of construction,” recalls Dennis, president of Design Build Associates Inc. (DBA). “I was in a fortunate place because the president asked me if I’d like to take over the business. He offered me his contacts and told me he would support me through the first year as a partner.”

A New Niche

By 1987, Dennis was the sole owner of DBA, which started out as a successful retail and commercial developer, but around the same time, he realized a special niche market the company could support. “I noticed the need for a construction management and consulting firm in the Homeowners Association (HOA) market undergoing major rehab projects,” explains Dennis. “When we started out in the mid 1980s, no one was doing it in this area.”

US Builder Review by Molly Shaw

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