Checklist for a Proper and Effective Transition Study

 

gray wooden house

Homeowner associations (HOAs) are on the rise in the US for the past recent years.

A 2020 research that 8,000 new HOAs are formed each year, further increasing the 351,000 total of HOAs operating across the country.  All in all, over 100 million people are occupying the 40 million housing units that are subject to HOAs.

Therefore, it’s likely that for many homebuyers to encounter a HOA property while house-hunting. For the HOA board of directors, the property must be maintained well to keep the residents safe, happy, and secure and attract new residents to the community.

To achieve such a feat, the HOA needs to ensure that the property and the shared amenities that come with it are in good condition, most importantly before the developer transfers the control to the homeowners. As such, conducting a transition study is necessary. A transition study is a useful tool that reveals construction defects. When the developer refuses to address and solve those issues, the transition report can serve as evidence during a fair settlement and litigation.

The following are the several factors that HOAs must meet to ensure a proper and effective transition study.

Establish Full Coordination with Key Stakeholders

Ensuring full cooperation between the HOA members, professional consultants, and the developer or community association is the first key to a successful transition study. If all the critical stakeholders in the study can communicate clearly, forged claims can be avoided, and the need to hire a lawyer to explain things can be avoided.

A transition study also requires the full participation of the residents for it to be effective. For instance, a transition study concerning the turnover of a condominium and all its shared amenities will require some of the residents to provide consent to have their home’s interior inspected. Furthermore, they may also need to answer a questionnaire for any concerns regarding the unit interiors.

Create a Detailed Inspection Checklist

The association’s managing directors should list all areas and amenities of the association’s property and define the items to check in the area. This can help ensure that all property elements are inspected and help streamline the inspection process as well.

Some developers only offer essential shared amenities like parking lots and parks, but many provide more than enough, including swimming pools, off-road bike paths, gyms, jogging paths, play areas for kids, etc. Regardless of how lavish the amenities are, they should all be listed to ensure that those facilities are reasonably well built.

In a typical condominium or townhouse community style, at a minimum, the following must be inspected by a professional as part of the transition study:

  • Site grading and drainage
  • Stormwater system and components
  • Concrete slabs on grade, i.e., sidewalks, patios, and dumpster pad
  • Pavements, i.e., roadways and parking areas
  • Exterior roof elements
  • Foundations
  • Decks and balconies
  • Landscaping of the common areas
  • Lighting
  • Retaining walls
  • Waterproofing and exterior finish materials
  • Fences, decorative structures
  • Interior inspections
  • Recreation facilities

Perform a Reserve Study

In conjunction with a transition study, it is also advisable for HOA to perform a reserve study. In some states, HOAs are required to include reserve funds in their budget to avoid special assessments. A reserve study will also help the association determine the useful life and cost of replacement of major shared items such as driveways, HVAC systems, and roofing systems. The replacement cost of each asset is divided by its useful life which provides the HOA the money they should allocate to the reserve fund on an annual basis.

Hire a Qualified Expert

Last but not least, a successful transition study can only be done through a detailed and thorough on-site inspection conducted by a professional engineer. A professional engineer has the expertise and provides an impartial opinion of how construction defects can be repaired and how much those repairs will cost.

More importantly, they also know whether the association should accept the development and the common property elements as is or wait until the developer has rectified all the construction defects.

Lockatong Engineering offers a transition study to enable community associations to thoroughly understand how successfully the developer has met all project obligations and expectations. Our comprehensive transition study covers:

  • Review of all engineering and architectural drawings and the public offering statement.
  • Review of public documents and resolutions concerning the development by visiting the appropriate municipal offices.
  • Perform on-site visual inspection to spot any places that aren’t designed in general accordance with the design documents or with appropriate workmanship.
  • Inspect interiors of five percent of the units to identify systemic defects in private spaces that the developer should fix before transferring ownership.
  • Create a Narrative Report of Transition based on the site inspection and reviews. This details each deficiency and its possible cause(s), recommends corrective action, and references any performance standard if applicable.
  • Create a Transition Defect Budget for Correction that provides the association with an estimate of the costs for correction and the amount that association obligations could exceed concerning normal reserve funding.
  • An option, which requires board approval: Prepare a questionnaire that is distributed to all residents so they can report concerns regarding their own unit’s interior and help identify common issues.
  • Accept the property as-is.
  • Accept it with conditions.
  • Decline to accept responsibility for maintaining the property until all work is completed.

With the expertise, knowledge, and professional objectivity that our experienced engineers bring to every project, homeowner associations and property developers can be assured that their transition study covers all the necessary details. As a result, HOAs and the developer can understand every issue thoroughly – and act upon those if necessary. Lockatong Engineering also assists and helps associations during the negotiation phase as a follow-up to the transition study.

Contact us today to learn more about our New Jersey Transition Study services.