Aging Infrastructure – Knowing What’s at Stake

Concrete Spalling

In a recent educational webinar with Husch Blackwell’s Daniel Miske and Reserve Advisors’ Andrew Stoutenburg we discussed aging infrastructure and knowing what’s at stake in your community. Aging infrastructure, if it has not been properly maintained, can cause large-scale issues for Boards and their communities. Over 60 percent of attendees had structural concerns about their community, and 24 percent have not had a reserve study done or their study is over 3 years old. 

Too often with aging buildings, maintaining aesthetic elements becomes more important than maintaining building integrity. Understanding your aging infrastructure’s ins and outs, board liability, insurance, and practical steps for your board or association to take are all part of the world of building and community management. This becomes an increasingly heightened necessity in aging communities. What ties all of these elements of responsibility together in a simplified package? Reserve studies.

Reserve studies are non-destructive, non-invasive reviews of the condition of your property. Including an analysis of each community component such as roofing, retaining walls, siding, parking garages, and common areas, reserve studies help boards and associations plan for sound financial futures. From a funding analysis to the disclosure of structural issues, these studies assess a property’s condition, provide an opinion of the remaining useful life of property components, and lay out a monetary repair/replacement plan spanning 30 years. 

If your building is older, there may be a higher chance that structural deficiencies will be found in the discovery phase. This is especially true if the building has been deteriorating due to a lack of action. If structural issues are noted during the study, you’ll want to get a second opinion from an expert specific to that component, where destructive testing may be needed to determine the exact cause and scope of the damage. 

What should your community do to plan for the future? Make any necessary repairs or replacements, and utilize the study’s financial plan to assist in paying for these projects as they come due. 

With old and new buildings alike, the board serves as a fiduciary to their association and may be liable if nothing is done about structural problems. Liability generally arises from one of four things:

  • Willful failure to deal fairly with the association
  • Violation of criminal law
  • Derivation of an improper personal benefit
  • Willful misconduct 

When it comes to aging buildings, it’s best to get a reserve study done. Being safe is better than being sorry! If the study identifies structural issues, hire the appropriate engineers or other experts. Follow your reserve study’s budgeting recommendations to ensure your reserves are adequately funded, and follow up on your reserve study periodically. Catastrophic failure is the most dangerous result of ignoring aging infrastructure, along with increased costs that could have been avoided had the issue been fixed when it was first noticed. After all, you can’t say you relied on expert advice if you don’t address a problem the study brings to light.

For more questions, contact Andrew Stoutenburg | Phone: 512-906-0745 | Email: andrew@reserveadvisors.com