All communities deal with limited funds and often a long list of projects as they develop their annual budgets. The reality is that some projects must be delayed due to limited resources or the higher priority of other projects. However, the cost of such deferred maintenance is often unknown or not well accounted for, thus the decision-making process can be somewhat flawed. It can be a hard choice to make repairs this year and easier to let them slide until sometime later. This often results in playing catch-up on a growing project list.
Often engineers are asked to prioritize a list of projects as a third party. It is typically recommended that life safety hazards or projects with the potential to damage personal property are given the highest priority. Secondly, the most deficient items are ranked as medium level priorities, and then those that are not expected to become a serious problem for several years are given the lowest priority. Occasionally, communities have this prioritization skewed. The list should not prioritize aesthetic items like new mailboxes or flowers when there are major structural, mechanical, or electrical issues to address.
Keep in mind that it is more cost effective to perform as much work as possible, now, than to defer repairs until later. Research has shown that every $1 of deferred repairs results in $4 of repairs, later. Other research indicates that deferred maintenance can cost 15 times more than the repair. The longer a repair is delayed, the more expensive and extensive the project will be.
Postponing the work can have serious cost implications. I have seen a parking garage repair project with a 30% increase in the original cost related to additional concrete repair quantities, when the project was delayed by just two years. Deferred repairs to HVAC and electrical equipment often results in replacement of the equipment, which vastly exceeds the cost of the repairs.
Rarely does postponement result in lower prices. Being in a financial position to take advantage of price reductions in the early part of the pandemic, when many projects were being shut down/postponed and work was in short supply, proved to be sound planning. Procrastination through the pandemic has reaped huge budget implications as the cost of many raw materials have skyrocketed related to COVID-19. Plywood that historically cost $12 a sheet now costs over $70. Anything that is metal, like nails, screws, and bolts, also costs much more. The shortage of needed materials does not just exist in construction, as computer chips are limited. Thus, technology and construction related projects and upgrades are now more expensive with long delivery times. It is unknown if or when these dramatic cost increases and/or limited supply will return to “normal.”
Disruption to the community is often overlooked as a cost of deferred maintenance. Most repair projects are noisy and require that the residents be inconvenienced by shutting down HVAC systems, restricting parking, taking an elevator out of service, closing a balcony, etc.
Some communities that deferred projects during the pandemic are considering doubling up on the projects in the coming year to make up for a season of inactivity. This approach will likely result in seemingly continuous repairs/upheaval to the building and double the duration of the aggravation. With more people working from home, this will almost certainly push the patience of the association to the brink.
Long-term deferred maintenance of numerous projects or the lack of performing repairs, in general, will often result in emergency repairs due to failures or local government citations. Emergency repairs are much more costly than planned repairs and must be performed immediately. Even well-maintained properties can have an emergency project, but they are usually few and far between.
The more quickly that a repair is performed will result in reduced costs in the long-term. The other benefit of this approach is that the long list of projects will be reduced to a much less overwhelming size. Taking this information into consideration should aid in making budget decisions and planning in an informed, proactive way.
By Christopher W. Carlson, P.E., SECB
Chris is certified in the practice of structural engineering, has over 30-years of engineering experience, and is a recognized expert in the industry. He specializes in the evaluation and rehabilitation of defects in commercial and residential buildings, retaining walls, and parking garages.