By Mike Koger, AIA, Esq
In the wake of the Champlain Towers condominium collapse in Surfside, Florida, many homeowners’ associations will address the same topic at their upcoming board meetings – how do we stop Surfside from happening to us? The reality, in the United States at least, is that we don’t pay much attention to the safety of the buildings where we live and work. We take for granted that they won’t come crashing down in the middle of the night. Aside from extreme events, like hurricanes, earthquakes, or terrorist attacks, buildings just do not collapse unexpectedly in the United States.1 After all, there is a thorough and robust regulatory process for designing and constructing buildings.
Yet, the Champlain Towers collapse may reveal some problems in the system. Existing buildings come with a host of maintenance and pair needs.2 These needs, by default, fall on property owners to contend with. And property owners who are inexperienced in dealing with such issues may be at a loss for how to get started, figure out funding, or push repair projects across the finish line. Added to this, when design professionals and contractors make mistakes in their work, property owners are left to navigate unfamiliar processes to pursue remedies, make insurance claims, and make sure corrective work gets done.
This collapse will certainly usher in a new era of owners looking closely at their existing buildings to maintain aging structures and understand their vulnerabilities. Also, governmental oversight of condominiums and their repair needs will almost certainly be stepped up in the months and years to come.3 The good news for homeowners’ associations is that there are resources to help evaluate existing buildings, assess their condition, and spot troubling issues well before they reach the point of catastrophic failure. Also, spotting problems early and addressing them holistically can save property owners from escalating costs down the road as repair needs become more significant, extensive, and urgent. While it is too early to know for certain what caused the Surfside collapse, it is possible that early identification of defects and deterioration could have led to solutions years ago that would have prevented the catastrophic collapse. Early action might also have alleviated the extreme repairs bills that placed the Champlain Towers homeowners’ association in such a financial quandary.4
So, what steps can a homeowners’ association take to be proactive about their existing buildings? Here are a few ideas to get started.
One of the first things a property owner can do is hire a structural engineer to conduct a structural assessment of their existing building. Structural assessments primarily come in two forms – those based on visual observations alone and those involving testing that might need to be done in a lab, require the removal of finishes or materials, or be conducted with specialized equipment (such as concrete sampling, x-rays, or ground penetrating radar.) Typically, owners will start with a structural assessment based on visual observation, then move to more involved testing if there is reason for concern. Structural assessments should always be done by a design professional who is properly licensed to perform such services. Typically, when the structural engineer has completed its assessment, it will report its findings back to the owner in the form of a written report. Structural assessment reports might include the following information:
As for how to hire a structural engineer to conduct a structural assessment, AIA Contract Documents offers document C103™–2015, Standard Form of Agreement Between Owner and Consultant that can be used for such an engagement. C103–2015 is a standard form agreement between an owner and consultant that contains terms and conditions, including those related to copyrights and licenses, claims and disputes, termination or suspension, and compensation. C103-2015 can be used to hire a wide range of consultants as it does not include a scope of services, which must be inserted or attached as an exhibit.
Structural failure is not the only concern owners should have when thinking about their existing buildings. Buildings come with a variety of maintenance needs, including the need to maintain the proper operation of mechanical and electrical equipment and the need to maintain non-structural interior and exterior components. While these maintenance needs might not have the same life-safety implications of a building’s structure, they can be costly. And those costs can experience a snowball effect if neglected long enough.
AIA Contract Documents also offers a way to contract for these services in the form of document B210-2017, Standard Form of Architect’s Services: Facility Support. B210-2017 can be used to hire an architect to assess the condition, performance, and operation of an existing facility or group of facilities. B210-2017 can also be used to hire an architect to perform space management or maintenance management services. B210 may be used in two ways:
1. Incorporated into the B102-2017, Owner/Architect Agreement as the architect’s sole scope of services, or
2. Attached to AIA Document G802™–2017, Amendment to the Professional Services Agreement, to create a modification to an existing owner/architect agreement. B210–2017 is a scope of services document only and should not be used as a stand-alone owner/architect agreement.
Here’s where things get tricky. Repairs and overdue maintenance can be expensive, and it’s always easier for homeowners’ associations and their membership to push these costs down the road.5 Yet, homeowners’ associations do have a few options when it comes to paying for needed repairs to common elements of a building. Funding options are generally described in a homeowners’ association’s bylaws or other governing documents, so be sure to review those closely (or hire an attorney to do so) to understand the specifics of how your association can pay for repairs.6 Also, be sure to review (or again, hire an attorney to review) any applicable property insurance policies to see if a claim could be made to cover needed repairs.
Nonetheless, one common way for homeowners’ associations to pay for large maintenance and repair items is to simply increase regular monthly assessments to each unit and incorporate repair costs into the association’s budget. Naturally, this is a slow way to generate capital for needed repairs that can, as seen in the case of the Champlain Towers, rise into the millions of dollars. Yet, in many instances, homeowners’ associations will already have money set aside in a reserve fund for emergency expenses. If repairs are needed urgently, this reserve fund may be able to be used and replenished over time.
Another way to pay for costly repairs is through a special assessment. A special assessment is an extra fee a homeowners’ association may charge its members in addition to the regular monthly assessment. Special assessments are typically intended to pay for one-time, specific needs. Again, special assessments are regulated by the homeowners’ associations governing documents and typically must meet specified criteria in order to be charged. While special assessments are sometimes necessary, they can be highly unpopular amongst the homeowners’ association members. They can also prove difficult to collect, particularly for members on a fixed budget.
As an alternative to special assessments, homeowners’ associations also have the ability to take out loans to pay for expensive maintenance and repairs. Such loans are different from a traditional home mortgage in that the lending institution does not usually have a direct collateral interest in the property itself. Rather, in the case of a default, the lending institution is often given the right to collect homeowners’ association assessments directly from the homeowners themselves, effectively bypassing the association in the collection of assessments.
When it comes to maintenance and repairs, it’s not enough to just assess, plan, and budget. You need to follow through and implement repairs before they become too burdensome and expensive. By all available reporting, the Champlain Towers homeowners’ association had hired an engineer to do a structural assessment and they had taken steps to figure out financing. Still, they struggled to implement any of the needed repairs. When it is time to hire someone to implement repairs, there are plenty of good resources available in the AIA’s library of construction documents. Here are a few that could be used on a repair project.
While it is too early to definitively know the cause of the Champlain Towers South collapse, the early information about this incident highlights the need for inspections, maintenance, and repair of existing buildings. It also highlights the fact that the responsibility for those inspections, and the implementation of repairs or regular maintenance practices, will fall to property owners. AIA Contract Documents publishes standard form agreements that might be used as the starting point for engaging consultants to perform the inspections, then engaging design professionals and contractors to implement the repairs or to perform routine or periodic maintenance work. Of course, each project is unique, and while AIA Contract Documents templates provide an excellent starting point, competent legal counsel should be engaged to review and revise the documents to make sure that all the unique attributes of the project are considered and addressed.
AIA Contract Documents has provided this article for general informational purposes only. The information provided is not legal opinion or legal advice and does not create an attorney-client relationship of any kind. This article is also not intended to provide guidance as to how project parties should interpret their specific contracts or resolve contract disputes, as those decisions will need to be made in consultation with legal counsel, insurance counsel, and other professionals, and based upon a multitude of factors.
1. When buildings do collapse unexpectedly, it is a major outlier that attracts significant attention from the design and construction industry. Most architects, engineers, and contractors can list from memory the important structural collapses over the past 50 years – the 1981 walkway collapse at the Hyatt Regency in Kansas City, the 500-pound windows that fell out of the John Hancock Building in Boston in the 1970s, the Minneapolis bridge collapse in 2007, and the 2019 Hard Rock Hotel collapse in New Orleans to name a few.
2. As of this writing, the cause of the Champlain Towers South collapse is not known and will be investigated by the National Institute of Standards and Technology. However, an October 8, 2018 “Structural Field Survey Report” prepared by Morabito Consultants indicated that the Champlain Towers’ parking garage contained “signs of distress/fatigue”, and indicated that “abundant cracking and spalling of varying degrees was observed in the concrete columns, beams, and walls.” The report further recommended that “The Entrance/Pool deck concrete slabs that are showing distress be removed and replaced in their entirety.”
3. Haber, David B., “I Know All About Condo Living. After Surfside, Change Is Coming.” July 29, 2021.
4. The October 8, 2018 Structural Field Survey Report identified a “Total Summary of Remediation Probable Cost” of over $9.1 million dollars and multiple news outlets have reported that this cost had escalated to over $15 million dollars.
5. See Haber, David B, “Members of these boards are volunteers; some serve for only one or two years. They often find themselves between a rock and a hard place. If the board sets aside reserve funds for building repairs, they are often criticized and, in some cases, defamed and replaced by new board members opposed to raising maintenance fees or passing special assessments. The general attitude has often been, “Why pay today for what you can put off until tomorrow?”
6. See, for example, the North Carolina Planned Community Act, which grants homeowners’ associations the right to “Adopt and amend bylaws and rules and regulations”, “Adopt and amend budgets for revenues, expenditures, and reserves and collect assessments for common expenses from lot owners”, “Regulate the use, maintenance, repair, replacement, and modification of common element.”, and “Impose and receive any payments, fees, or charges for the use, rental, or operation of the common elements other than the limited common elements and for services provided to lot owners.” N.C. Gen. Stat. Ann. § 47F-3-102.