Articles

Tips for Handling Major Replacement Projects

Sooner or later, every community association faces major replacement projects. That's why associations conduct reserve studies. When it's time to start a project, however, the method of collecting money is less important than how it is spent.

Most owners will invest in a large project and stand behind their board of directors if they see the value in the expense. But if a project's goals are vague, emotions can replace reason, and well-meaning dissidents can hinder progress. A Michigan association, for example, needed to replace a badly deteriorated cedar shake roof. By converting to a low maintenance manufactured roofing system and improving the insulation, the association could recover its investment in six to eight years, and then save up to $100,000 per year in energy and maintenance costs. But try asking owners for $2,000 each without these details and you've got mutiny.

Fortunately, logic usually prevails. In this case, the project was completed, but only after a year's delay due to infighting. To avoid this type of frustration, board members need to do their homework and market their ideas.

ENSURING GOOD RESULTS

Here are eight tips for ensuring a smooth replacement project:

1. Find a management team with construction experience. As a professional manager, I've found that a combination of management experience and construction knowledge is essential. If your manager lacks this knowledge and experience, consider forming a committee of members who do. If that's not possible, consider tip number two, below.

2. Hire a consultant. Qualified consultants usually help save time and money. Ideally, the manager will have enough project management knowledge to provide checks and balances. Otherwise, how do you know your consultant is giving you good counsel?

3. Use consistent specifications to ensure that all bids are submitted in a similar format. Your specs should meet or exceed local code requirements, and conform with criteria for contractor selection (such as necessary insurance and bonds). An experienced manager should be able to provide specifications and analyze contractors' recommendations.

4. Eliminate unqualified contractors before accepting their bids. Require contractors to have appropriate licenses, insurance, equipment, and manpower, and to meet other established criteria. You also may want to require a bid bond and a performance bond for the project.

5. Thoroughly investigate material options. Construction technologies change constantly. New products may have replaced the state-of-the-art materials you used five years ago. Investigate these materials--don't rely solely on the contractor's recommendation.

6. Require a reasonable warranty on workmanship and materials. Most contractors will guarantee work for 12 to 18 months. Ask for three or more years and the prospects will thin out. Avoid pro-rated warranties if possible--the effectiveness of the warranty becomes moot in the latter years.

7. Ask an attorney experienced in community association and contract law to review the contract. The attorney should represent only the association. Also, be wary of contractors that only use their own agreements. If they're skittish, chances are they've been sued--maybe for good reason.

8. Establish a tracking system to monitor progress, costs, and satisfaction. If these are unbalanced, the project can become unmanageable--and you'll wish you'd never started it.

Large-scale projects are not for the faint of heart. Committed board members and qualified experts, however, will help ensure good results.