Reserve Funds

September 30, 2021 Published by London and Area Chapter - By Jennifer Dickenson

Q&A: Site Inspections and their Budget Effects

From the September 2021 issue of the CCI London CCI Review

As many Corporations are approaching the end of maintenance season and the beginning of budget season, we asked some engineers what Boards should be looking for (and what they look at for you). They certainly have seen some odd things on their inspections!

1. Do you complete Reserve Fund Study site inspections with Board members? Who else, if any, do you invite?

•RW: No, except when I need a Board Member or Manager to provide access, such as to roofs or service areas. To inspect properly, I need to concentrate, and another person is a distraction. I am happy to talk briefly with individual owners on the way round, and often do, both to explain what I am doing, and to listen. I am always happy to talk with Board Members, but not to accompany the inspection. I usually ask for issues of concern ahead of inspection, and seek clarification or extra input after inspection.

•DP: Sometimes, most of the Boards do not show much interest in completing the site inspection/review with us unless there is a some really pressing issue(s) with one or more common elements that need immediate attention. Especially if that/those repair(s) is/are costly. They usually do their walk arounds with the property managers once a year and that is enough for them and the property managers as well.

•CW: When performing Reserve Fund Studies, we are welcoming to all who wish to attend. Typically, the property manager and one or two Board members are present.

2. What’s the most prevalent maintenance issue you see on your walk arounds in the London and surrounding area?

•RW: Water and the damaging effects of water. In particular, inadequate eaves troughs, downspouts, & extensions, and site drainage issues. My work is mostly with townhouse condos, and water control and management is frequently problematic, especially in heavy rain. Poor water management damages other elements and water can find its way through any cracks and joints.

•DP: Maintenance issues vary from corporation to corporation, depending on the type of the building(s) and the site. Some have roofing issues (especially ones with mansard roofs), some have building envelope and elevator issues (high rise buildings), the annual cost of landscaping & tree maintenance is an issue with older corporations with mature settings and larger lots, leveling of pre-cast pavers on driveways in some corporations, pre-cast steps, etc. So, it really varies from one to another; however, there is no shortage of them and some corporations have multiple issues.

•CW: We often find a range of maintenance issues; however, in older condos we often see decking and fencing being pushed further than they should be and past the point at which they should be addressed.

3.What is the oddest thing you have seen while completing a site inspection? (for levity)

•RW: An uninvited tree growing on a high-rise roof. A random seed had found a sufficient patch of dirt in the ballast. Holes in the asphalt driveways of only one block of townhouse units. The owners claim to have seen rats poking their noses out. No rats were reported inside any units.

•DP: I cannot point out single oddest thing I have seen but, older corporations tend to have different types of construction compared with the newer townhouses or buildings. Materials in these older buildings appear stronger and more durable but, on the other hand the constructions practices and likely Code requirement and design are quite different than the newer construction.

•CW: Several items stand out as being unusual. Smelling my way in a townhouse unit to a dozen rotten raw eggs stored in a dresser after the grandchildren decorated them was memorable. Smelling (again!) my way to the decomposing body of a skunk in a window well was also representative of my engineering degree.

4. What should Board members consider, as they enter budget season, as they review their site inspection/reserve fund study notes?

•RW: Most important, a specific Reserve Fund budget should be prepared. This entails a review of the RFS, and an up-to-date assessment by the Board & Property Manager, and some real thinking about reserve fund issues. The RFS is a guide not a blueprint. This seems to me to be a no-brainer, but in my experience, few condos prepare one. In my opinion, the Condition Assessment portion of a Reserve Fund Study with an inspection is one of the most important sources of information. It should give not only a snapshot of immediate issues, but also an indication of the areas to keep an eye on. Do not defer needed work - it may cost you more, and may diminish the market value of the units. Management by special assessment is a sign of failure.

•DP: They should look at the entire RFS since each RFS has a scholastic look at all common elements for the design horizon of 30 years. Sometimes, Boards are too concentrated on only some common elements in a very short time span (3 to 5 years) rather than the entire picture. Sometimes they do not follow the pathway the RFS provides and tend to do what they prefer. Issues with inflation and preventive maintenance are occasionally ignored as well, especially since these corporations are not-for-profit entities that are limited where they can invest their money. Interest rates these days are low while the inflation is on the rise so, it appears it is better to replace the common element sooner rather than later.

•CW: Board members should consider ensuring that any items which are not slated for major repairs or replacement for many years are reviewed annually for minor repairs which should be done if possible as an operating expense and which will help prolong the overall life of the component.

Jennifer Dickenson, BSc (Hons), RCM is a condominium manager with Dickenson Condo Management. She was first elected to the CCI Board of Directors in 2016, currently serves as Vice-Present and the chapter’s National Representative. Jennifer is involved in all aspects of the chapter and shares her expertise.