Capital Reserves Needed for Costly Repairs as Building Issues Arise Early

At newer-generation buildings, construction issues are cropping up sooner than they should be.

Stephen Varone, President,
RAND Engineering & Architecture

Robert Krupp, Project Engineer,
RAND Engineering & Architecture

Often in middle age, say between 40 and 50 years, a building will develop parapet roof leaks. But increasingly, more recent constructions are suffering from serious — and potentially dangerous — problems much earlier than might be expected. That was the case at one Gen Z condominium built some 20 years ago after a facade inspection revealed vertical cracks in the parapet wall and in the openings between the masonry. “It wasn’t just atypical for the age of the building,” says Varone. “The building was actually flagged as unsafe.”

To determine the cause of the leaks, probes were conducted in some of the walls. This building had cavity walls, which have a space between the external face of the facade and the interior, finished side and require proper waterproofing so that the masonry isn’t porous. At this condominium, “it wasn’t done in a way that was comprehensive, as if someone didn’t truly understand the way water flowed,” Krupp says. 

Unfortunately, such defects are not uncommon in newer-generation buildings. “They aren’t necessarily built the way that they were designed on paper due to lack of proper oversight during the process,” Varone explains. “Or something can be code compliant while not considering the relatively short life span of products like caulking and certain coatings.” Too often, he adds, developers are not thinking long term, knowing that as an LLC, their liability for any problems ends after a few years. Instead, developers often focus on preventing leaks and other problems from cropping up only until the units are sold and it becomes someone else’s problem. “While existing buildings undergo rigorous periodic inspections to check for deterioration, the inspection and oversight process required for new construction is, frankly, less rigorous than it should be,” Varone says. “There are special inspection requirements for many specific components, like for masonry ties, but a lack of mandated general oversight by the design team. There’s no requirement that the architect that designed the building be there 40 hours a week or even 10 or 20 hours a week to ensure that nothing falls through the cracks.” 

At the condominium in question, both the waterproofing materials and installation fell short of the mark. “When we were initially brought in, we had been alerted to a number of leaks throughout the building. They were almost systemic, and no one could really make any rhyme or reason for it,” Krupp explains. “We’d find an opening or a crack at, say, the eighth floor, but someone would be experiencing a leak at the sixth floor.” The probes eventually revealed that cheap waterproofing materials had been used, applied only behind the brick without a filler to help bridge the gaps, and were actually missing on some of the floors.

The condo, however, could not afford removing and replacing the parapets on the entire building. So instead of addressing all the leaks, the board opted for prioritized, incremental repairs. “We’re attacking the most chronic and disruptive leaks — the ones that cause problems every single time there’s precipitation,” Varone says. “That way, we just have less severe leaks at fewer locations. It’s gone from a critical problem to more of a nuisance that will just have to be attacked over time.” 

The takeaway? Whether you’re in a new building or an old one, if you find a problem, it doesn’t have to be fixed all at once. “If money were no object, yes, we would do everything immediately at all times,” Varone says. But that’s not often the case, which means boards have to balance ideal, immediate repair scenarios with financial and practical realities. “You also have to plan them in as responsible a manner as you can for upcoming FISP cycles,” he adds. “At minimum, you need to get to a place where nothing is going to become unsafe between this report and the next report.”

To do that, boards need to have a long-term schedule for repairs and maintenance, including a capital reserve analysis to ensure funds are available for the future. That includes factoring in soft costs, including scaffolding, permitting, special inspections and site safety, which can be enormous. “It’s all about planning, and making a best-case scenario in light of the problems you’re facing and minimizing the remaining ones,” Varone says. “That’s how to achieve success with a real-world approach.”