The Three Pillars of Building Safety

The Three Pillars of Building Safety: Maintenance, Inspections, and Reserve Studies

By Gary Porter, FMP, RS, RRC, CPA                                                                                                               April 2022

Building safety is one of the most crucial aspects of property management, construction, and long-term infrastructure sustainability. Ensuring that a building is safe requires a concerted effort that spans beyond just adhering to building codes at the time of construction. Over the years, safety standards evolve, wear and tear occurs, and unforeseen environmental factors may affect a building's integrity. To safeguard the health and safety of building occupants, ensure compliance with legal and insurance requirements, and protect the property's value, the three primary pillars of building safety—maintenance, inspections, and reserve studies—must be thoroughly addressed and integrated into a facility's management practices.

The collapse of the Champlain Towers South Condominium in June 2021 was a defining moment that changed the condominium industry. The prevailing thought was that such an event could happen in other countries, but not here – but it did happen, and 98 people died. As stated in my related article "The Prime Directive," the community association industry has never placed the emphasis on maintenance that it deserves.

In the aftermath of Champlain Towers, the Florida legislature created statutes requiring inspections, mandating reserve studies, and mandating funding of reserve studies (the Structural Integrity Reserve Study - SIRS). While helpful, I consider all of these to be knee-jerk reactions that focus on the symptoms rather than the cause. In 2021, mine was the only voice saying that inspections don't stop buildings from falling down, reserve studies don't stop buildings from falling down, and maintenance is the ONLY thing that stops buildings from falling down. If the Florida legislature really wanted to prevent another building collapse, they should have mandated that condominiums adopt a formal maintenance plan prepared by a credentialed facilities management expert. THAT addresses the cause, not the symptom.

Pillar 1: Maintenance – Ensuring the Longevity of Building Systems

Maintenance refers to the ongoing process of keeping a building's systems, structures, and components in good working order. Preventive and corrective maintenance strategies are designed to prolong the life of these systems and prevent the need for more expensive repairs. Maintenance helps ensure that the building remains safe, comfortable, and functional, while also mitigating potential risks to occupants.

Preventive Maintenance

Preventive maintenance is the proactive approach to maintaining the building's systems and infrastructure. This type of maintenance is done on a regular schedule to avoid system failures, enhance efficiency, and reduce the overall cost of repairs.

For example:

• HVAC Systems: Regular cleaning and servicing of heating, ventilation, and air conditioning (HVAC) systems prevent breakdowns and improve air quality. Replacing filters and inspecting ducts help avoid potential fire hazards and maintain energy efficiency.
• Plumbing: Checking for leaks, clearing drains, and inspecting pipes can prevent water damage, mold growth, and flooding.
• Elevators: Regular inspection and lubrication of elevator mechanisms ensure that these high-traffic systems remain operational, which is essential for occupant safety, especially in high-rise buildings.

Preventive maintenance should be tailored to the specific needs of each building. Establishing a routine maintenance schedule based on manufacturer recommendations, environmental conditions, and the age of the building systems helps reduce the likelihood of equipment failure.

Corrective Maintenance

Corrective maintenance is performed when a building system or component fails unexpectedly. Though preventive maintenance can reduce the likelihood of such failures, it's not always possible to predict every issue. Corrective maintenance addresses these failures quickly and efficiently, restoring the functionality of the building's systems and ensuring the safety of the occupants.

For instance, if an electrical circuit fails or a roof starts leaking, corrective maintenance is required to fix the immediate problem. While reactive maintenance can sometimes be more costly than preventive actions, it is necessary for addressing unexpected issues.

Key Aspects of Effective Maintenance

To achieve effective maintenance, building owners and managers must implement strategies that include:

• Staff Training: Ensure that maintenance personnel are properly trained in all building systems.
• Equipment and Materials: Use high-quality materials and reliable equipment for repairs and upgrades.
• Record Keeping: Maintain detailed records of all maintenance activities, including repairs, inspections, and replacements, for future reference.

Pillar 2: Inspections – Identifying and Addressing Safety Hazards

Regular inspections are a vital component of building safety. Inspections allow property managers to identify potential hazards or code violations before they become serious threats. These checks are usually performed by qualified professionals who understand the intricacies of building codes, safety standards, and regulatory requirements.

Types of Inspections

There are several types of inspections that every building must undergo, depending on its size, age, and function. These include:

• Structural Inspections: These inspections focus on the integrity of the building's foundation, walls, and roof. Over time, structural components may experience stress due to shifting soil, extreme weather conditions, or other environmental factors. A structural engineer typically conducts these inspections.
• Fire Safety Inspections: These inspections assess fire alarms, sprinklers, fire exits, and fire escapes, ensuring that fire suppression systems are in working order and that escape routes are clear and accessible.
• Electrical Inspections: An electrician or electrical engineer evaluates the wiring, outlets, circuit breakers, and other electrical components to ensure they comply with safety codes and standards.
• Elevator Inspections: Elevators, escalators, and lifts are subjected to routine inspections to verify their safety. A failure in an elevator could have catastrophic consequences, making regular inspections vital.

Compliance with Regulations

Building inspections ensure compliance with local, state, and national safety regulations. These regulations often evolve in response to new research, technology, and safety concerns. Regular inspections help ensure that a building adheres to the most current standards, reducing the risk of penalties and ensuring that the building remains insurable and safe for occupants.

In addition to mandatory inspections, it's advisable to conduct periodic self-inspections. Building managers can walk through the property regularly, looking for signs of damage, wear, or safety hazards. These observations may help flag minor issues before they escalate into significant safety concerns.

Documentation and Follow-Up

After an inspection is conducted, a report should be generated to document the findings. The report will outline the issues identified and, in some cases, provide recommendations for corrective action. Promptly following up on these recommendations is essential to maintaining the safety and compliance of the building. Failure to address identified issues could lead to increased risks and potential legal liabilities.

Pillar 3: Reserve Studies – Planning for Future Maintenance and Repairs

Reserve studies are long-term financial planning tools that help building owners anticipate future major repairs and replacements (MRR). These studies are crucial for ensuring that a building has the necessary financial resources available when it's time to address aging systems or infrastructure.

What is a Reserve Study?

A reserve study is a comprehensive analysis that outlines the expected lifespan of major building components and systems, such as roofs, HVAC systems, elevators, and parking garages. The study helps forecast when these components will need repair or replacement, and it recommends how much money should be set aside in a reserve fund each year to cover those future costs.

Reserve studies consist of the following three processes:

1. On-Site Physical Analysis: This includes identifying and performing a detailed assessment of the building's systems and components. A professional will evaluate the condition of each element and estimate when it is likely to require replacement or major repair. The primary skill required for this process is facilities maintenance. While many reserve preparers are engineers, architects, or contractors, it is facilities maintenance knowledge that allows the reserve analyst to best evaluate condition.
2. Valuation and Pricing: Most reserve preparers consider pricing of components to be part of the financial analysis, but it is actually a completely separate process requiring valuation skills. Reserve preparers should be familiar with valuation principles, understand what cost elements are, and which cost elements are applicable to each component.
3. Financial Analysis: Based on the physical analysis, the financial analysis determines how much money needs to be contributed annually to the reserve fund to ensure sufficient funds are available when repairs or replacements are needed. The financial analysis consists of (a) financial calculations, (b) financial modeling, and (c) financial reporting.

Importance of Reserve Studies

Reserve studies are essential for several reasons:

• Budgeting: Without a reserve study, building owners may struggle to budget for future repairs, potentially leading to large, unexpected expenses. A well-funded reserve account ensures that sufficient funds are available when major repairs or replacements are needed.
• Property Value: A building with a well-maintained reserve fund is more attractive to potential buyers. A reserve study provides transparency about the building's long-term financial health, which can enhance the property's value and marketability.
• Compliance with Laws and Regulations: In some states, reserve studies are required by law, especially for condominiums, homeowner associations (HOAs), and multi-family properties. Failure to comply can result in fines or legal challenges.

Updating Reserve Studies

Buildings and systems change over time. As such, reserve studies should be updated regularly (usually every 3 to 5 years) to reflect any changes in the building's condition, as well as inflation or shifts in the costs of materials and labor. Regular updates ensure that the reserve fund remains adequate to cover future needs.

Integrating the Three Pillars

The three pillars—maintenance, inspections, and reserve studies—are interrelated. Effective maintenance reduces the likelihood of major failures, while regular inspections identify problems before they escalate. Reserve studies ensure that there are adequate financial resources to address both planned and unplanned repairs.

By integrating these three pillars into a comprehensive building safety program, property owners can ensure that their buildings remain safe, functional, and compliant with safety standards. The synergy between ongoing maintenance, diligent inspections, and proactive reserve planning creates a long-term safety net for the building, its occupants, and its financial health.

Planning Takeaways

Building safety requires a holistic approach that combines regular maintenance, thorough inspections, and forward-thinking reserve studies. This approach isn't just about meeting legal requirements—it's about protecting lives and property value.

Remember that maintenance is the cornerstone of building safety. While inspections and reserve studies are essential tools, they only identify and plan for issues. It's the implementation of proper maintenance that actually prevents catastrophic failures.

For property managers and board members, now is the time to assess your current maintenance programs, inspection schedules, and reserve studies. Are they integrated? Are they being taken seriously? Most importantly, is maintenance being properly funded and carried out?

Gary Porter is a reserve professional with expertise in maintenance, finance, and valuation. He holds CAI’s (experienced based) RS credential and the knowledge-based RRC (Registered reserve Consultant) credential issued by the Budgeting Professionals Credentialing Board.  He is a also CPA and has served as an expert witness on valuation matters more than 50 times, including court-appointed engagements. He also previously worked as a public adjuster handling earthquake claims.  Porter is the author of 7 books and more than 400 articles on financial aspects of community associations.  He has been published or quoted in The Wall Street Journal, Money Magazine, Kiplinger’s Personal Finance, The Practical Accountant, Common Ground, The Ledger quarterly, Timesharing Today, Hawaii Building Trades, and The Florida Community Association Journal.