By Bryan Farley, Association Reserves, CO LLC
When looking at the component list on the Reserve Study, the reader will need to understand that there are generally five ways a component can fail. Just because the Reserve Study indicates that a specific component needs to be replaced, does not mean that it has to be replaced. Rather, the Reserve Study is indicating that the component has reached the end of its useful life.
However, there are specific components that should never be deferred. This includes life safety equipment (elevators, fire control panels) as well as protection projects (painting, asphalt sealing).
When considering project timelines for your property, here is a guide that can help your board establish what projects should be prioritized.
Inconsequential
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- An inconsequential failure is when a component like a garage opener/operator fails. This type of failure can be fixed when it is non-operational or can be replaced fairly quickly. Other examples include fan belts, tiled carpet replacement, pool heater exchangers.
Re-Evaluate
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- A re-evaluation failure is when a component has reached the end of its life, but could probably be replaced in the next year or two. This could include the somewhat wobbly perimeter fence that surrounds the neighborhood. The board could fix the problem areas now, and re-evaluate the full replacement next year.
Obsolescence
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- An obsolescence failure is when a component has subjectively reached the end of its useful life but still serves its purpose. Examples include outdated furniture in a lobby or exercise equipment that still ‘works’ but is past its prime. In other words, the component can still be utilized but is now outdated.
Protection
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- A protection failure is when a maintenance project is deferred leading to larger problems. Examples include: failing to seal the asphalt, neglecting to paint the wood trim on the buildings, or not painting the metal fencing around the pool. If these components are deferred and not taken care of, the board will now need to prematurely replace these components or these components may not reach their expected lifespan. The cost difference between a replacement project can be as much as 10x-20x more than the protection project.
Catastrophic
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- A catastrophic failure is when the replacement of a life safety system is not anticipated which could then lead to potentially life-threatening situations. Examples include failure to plan ahead for the eventual modernization of the elevators (which could cause month-long repair delays, which is unfortunate for a 30-story building), boiler systems (hot water going out on Christmas!), or water intrusion due to a leaky roof.
This guides your project timing decisions… do it now or delay. Bottom line: Don’t delay Protection or Catastrophic projects!
Bryan Farley is the president of Association Reserves, CO LLC has since completed over 2000 Reserve Studies and earned the Community Associations Institute (CAI) designation of Reserve Specialist (RS #260). His experience includes all types of condominium and homeowners’ associations throughout the United States, ranging from international high-rises to historical monuments.
