Reserve Funds and Reserve Fund Studies

May, 10 2023 Published by Toronto and Area Chapter - By Guest Contributor

Reserve Fund Study Report Card - Failure of Pipe Linings

From the Spring 2023 issue of CCI Toronto Condovoice Magazine.

Beware Of Financial Blockage

Site Description
The corporation consists of a high-rise residential condominium with over 150 residential units, constructed in the early 1980s.

Reserve Fund Assumptions
In about 2012, the corporation was experiencing issues with pinhole leaks in their domestic hot water systems. So, at that time, the board opted to line the pipes with an epoxy lining, in lieu of fully replacing the pipes. Subsequent reserve fund studies assumed that the lining would provide 20 or more years of service.

When the 2023 reserve fund study was prepared, the reserve fund study provider interviewed management and the corporation’s plumber. The manager reported some complaints related to inadequate water pressure and flow. The plumber reported small chunks of lining material being noted in the strainers. As a result, the reserve fund study provider recommended budgeting for full replacement of the hot water piping in the near term.

The Reality
The current board objected to this significant near-term cost, so the reserve fund study provider recommended that test cuts be completed to evaluate the condition of the lining. Several test cuts were completed and confirmed that the lining had debonded from the walls of the pipe. In two locations the pipe was almost completely blocked with accumulated lining material.

Until recently, pipe lining has been seen as an appropriate alternative to replacement of domestic water pipes because it was much less expensive, less intrusive compared to traditional pipe replacement, and many pipe lining installers offered a long warranty.

Unfortunately, many buildings have recently discovered that the linings have failed. As a result, many buildings are now faced with the unexpected and urgent need to replace their domestic hot water piping. Adding to the problem is the fact that most of the installing contractors are no longer in business.

Lessons Learned for Reserve Fund Planners
If you are aware that a condo has lined their domestic hot water risers, you should interview management and the corporation’s plumber to find out if there are any issues related to the lining. If issues are reported, test cuts may be advisable, and pipe replacement should be advanced. The findings of the test cuts will assist in making a recommendation related to the timing of domestic hot water riser replacement.

Takeaways for Board of Directors and Property Managers
If the condo has lined pipes, make sure you are watching for signs of failing lining. A strainer should be installed upstream of the recirculation pump to permit monitoring and catch loose lining debris. There is no way to repair a failed lining other than replacing the pipes.

If you are aware of debris in your system or pressure issues, be sure to notify your reserve fund provider so they can budget appropriately.

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