Picture this: It’s springtime, and my management company has just taken over management of a beautiful beachfront community. They’ve assigned this six-year-old property to me. While walking the property to familiarize myself with the grounds, I noted the pool looking over the private beach, a natural gathering spot for socializing and observing the sunrises and sunsets. I’m enthused with the prospect of managing this stunning property. Back in the office the phone rings, and an owner from this elite beachfront property reports that they have termites swarming — on the third floor. I put them in touch with the exterminating company under contract for this service.
Over the next several days, I received other calls about termite swarmers from owners on the second and third floors of the same building. I advised the board of directors that a destructive investigation was warranted to determine the degree of moisture penetration of the siding. I informed them that termites require moisture to survive, and that termites on the third floor of a building are a legitimate cause for concern. The board approved an investigation.
When the Exterior Insulation and Finishing System (EIFS) siding was removed, it was found that the termites had tunneled to the third floor through the foam backing, which was water-saturated. The blue tarp of shame now covered the exposed areas. For association managers, the blue tarp meant one thing: phone calls. From owners, asking what are you doing about this? From real estate agents, asking how extensive the problem is, when will it be fixed, will there be a special assessment? And from a concerned board asking me for advice on taking that next step.
At this point I recommended to the board that a comprehensive moisture survey be taken by an architectural/engineering services firm of all buildings in the community, since they all had the EIFS siding. The survey confirmed the worst, that all buildings were extensively affected with moisture penetration. As a result, several board members suggested a lawsuit against the developer of the property. I discovered that a prior board had signed an agreement with the developer that, in return for some prior work on the siding, no further legal action could be taken against the developer.
Board members then proposed that a request for bids be made to contractors for removing the EIFS and installing a different type of siding. One board member recommended a company doing similar work in the local area. This is where managers need to resist the various pulls and tugs. I instead recommended that an architectural/engineering services firm (hereafter referred to as XYZ Engineering.) offer the board several siding options so the board can make the basic decisions on materials that will ultimately become a Request for Proposals (RFP) with specific bid specifications. I explained to the board that, depending on the type of siding selected, different maintenance requirements will result and that now is the time to plan for the long-term future.
My first management objective was to control call volume during the project, and so I began sending regular mailings to owners/residents on the status of the project. At a public meeting, XYZ Engineering explained the pros and cons of different siding options. The board then selected the siding. I also recommended that all the windows be replaced at the same time, in order to avoid warranty debates going forward due to possible moisture penetration at the window area due to high winds experienced at the beach and the quality of the original windows. The board agreed with me that it was a prudent measure.
With those decisions having been made, XYZ Engineering wrote the bid specifications and submitted them, along with the RFP packet. I then recommended that a lawyer review all aspects of the RFP. In discussions with the attorney, certain qualifications were placed on bidding contractors relating to insurance and payment and performance bonds, as well as regular inspections of the work by XYZ Engineering prior to each progress payment.
It was then that I learned that the local company whose bid was sought by the board had gone out of business in the middle of a project. That’s why managers must strongly urge the board to use our expertise in finalizing the scope of work, and on qualifying the contractor when dealing with a large project and a significant special assessment. There are no “do overs.”
Bids were received and the board reviewed the proposal with XYZ Engineering. The board was ready to make a decision, and a meeting with all parties (board, manager, lawyer, engineer) reviewed all aspects of the project. It was during this meeting that the various costs were factored in to arrive at the total cost for the project. A contingency for unforeseen conditions was added in to the cost estimate in order to avoid the prospect of a second assessment should something unexpected be found in the course of demolition or should collecting the assessment prove to be a potential delay to the project.
With these controls and estimates in place, the special assessment letter was sent to all owners: $27,500.00 per owner (this association did not require approval of the owners for the board to impose a special assessment). The project went well, and there was even a $5,000.00 refund to owners at the end.
Jumping ahead: It’s springtime, two years have passed since that first termite call, and I am once again walking the well-landscaped grounds, confident that from that first termite call, all decisions were planned and thought out by the board and its professional consultants and executed properly. I was proud to have been part of that team of experts, and recognize that my skills and knowledge helped this community through a difficult time, avoiding potentially costly pitfalls. The community looks great. I know, based on the time of year that I may return to my office to listen to messages about termite swarmers, but I also know that the blue tarp of shame will not be hung from this property again!
Daniel C. McAteer, CMCA®, PCAM®
Virginia Beach, VA