The Engineer's Report Is Not the Second Coming of the Ten Commandments

The board hired an engineer, who reported that the building needed $500,000 worth of repairs, including a new roof, to eliminate the leaks. The board decided to go ahead with the work, breaking it up into two phases and leveling an assessment. The unit-owners who were not affected by the leaks – about two-thirds of the building – were outraged.

Did the board blunder by following the engineer’s recommendations?

“There are some engineers and managing agents who will automatically give you a report with the Cadillac recommendations,” says Ron Gold, a partner in the law firm Kagan Lubic Lepper Finkelstein & Gold. “It’s very important when you retain an engineer that you inform the engineer of your limitations, financial and otherwise. You want to hire an engineer who’s practical. The second thing is it’s important to discuss the engineer’s findings before the report is issued so there are no surprises. And as far as releasing it to the unit owners, sooner or later that’s bound to happen.”

And remember, your board is not obliged to follow an engineer’s recommendations.

“You can get an engineer’s report and treat it as a planning tool for the purposes of giving you some ideas,” Gold says. “It’s not something that commits you to do anything.”

The managing agent can be helpful when trying to decide which of the engineer’s recommendations to heed and which to ignore.

“Boards and managing agents have to be a little aggressive when they get an engineer’s report,” says Michael Manzi, a partner in the law firm Balber Pickard Maldonado & Van Der Tuin. “They have to look at it carefully and discuss alternatives that aren’t presented in the report. It doesn’t hurt to have a conference with the engineer and go through the report and question everything.”

Bottom line: an engineer’s report is not the second coming of the Ten Commandments; it’s a tool that can help your board deal with an existing problem or make long-term plans for future problems.

“My advice to boards, once they get the engineer’s report, is that in order to make long-term plans they have to have some idea of their financial obligations in the coming years,” says Gold. “Then you can go back to your team – your engineer, management company and accountant – and figure out if you’re going to add a certain amount each year to the reserve fund, or have an assessment, or maybe refinance your mortgage. Without an engineer’s report every five or 10 years, I don’t know how you can do planning or run a business.”