Mistakes to Avoid in your Transition Study
The transfer of ownership, control, and responsibility from the developers to the community association is crucial after a common interest development has been completed.
When this transition occurs, the association’s board should hire the services of a professional engineer to perform a transition study to facilitate a successful transfer.
A transition study encompasses the review of as-built drawings compared to what has actually been constructed to confirm that common elements of the building were constructed as per the design drawings and obligations were met. Additionally, the engineer will inspect and evaluate the present condition of the property’s common elements to determine if there are flaws stemming from poor craftmanship or design deficiencies are present. It also involves estimating possible repair or replacement costs to address these issues. In general, the inspection process includes the building envelope, interior common areas including common mechanical systems, structure, life safety, as well as an inspection of a representative sample of interior units to determine if there are systemic defects.
In New Jersey, key stakeholders must abide by the regulations stipulated in the Planned Real Estate Development Full Disclosure Act (PREDFDA) and New Jersey Condominium Act to ensure a proper transition phase. The transition period enables stakeholders the ability to effectively and efficiently transfer the developed property to the community association.
In order to have a comprehensive and effective process there are some key mistakes that should be avoided for a properly executed transition study in New Jersey:
Failing to Coordinate with Key Stakeholders
The lack of involvement of key stakeholders in a transition study can present significant challenges and may result in the need to hire an attorney specializing in this type of litigation to resolve issues.
Litigations have discouraged townhouse, apartment, and condominium construction projects, as cited by the Foundation for Community Association Research. The organization also mentioned that multi-family housing has the most risk when it comes to claims.
Developers should be able to resolve issues before the transition period to avoid possible confrontation from the association. It is also ideal that they coordinate with experts throughout the construction of a development.
Moreover, a NJ transition study should also include involvement from the homeowners which can include an interior inspection of their unit and to answer a survey concerning issues with their unit. Without the residents’ input, problems regarding their unit interiors will remain unaddressed and might worsen over time. It is important to have this information in order to determine if there are systematic defects in the building.
Not Creating a Thorough Inspection Checklist
It is sound practice for stakeholders to create a list of all common elements for the property, which will be transferred to the control of the Association. Doing so expedites the process and establishes an organized workflow to avoid any confusion or discrepancies.
A detailed inspection checklist also creates accountability. Underlying defects might be present that are not easily seen by the unaided eye. These unidentified or late identified flaws can lead to more severe problems, entailing safety risks, costlier expenses, and even legal charges.
If an accident happens because of poor construction or structural flaws, investigators and lawyers will want to see evidence that a professional assessed all areas or amenities in the property. It holds the person responsible for ensuring everything is in good working order.
Hiring Underqualified Staff
Engineers have varying levels of knowledge, skills, experience, and credentials. While most engineers work with their clients’ best interests in mind, some might not share the same work ethic. Failing to screen individual engineers or engineering firms thoroughly can cause various problems in the transition study.
Underqualified individuals might miss underlying defects and cosmetic coverups during the inspection. As a result, the developers or the association might shoulder more expensive repair and replacement costs in the future. They might also face sanctions for non-compliance with relevant building codes and regulations.
Furthermore, the insight of undertrained individuals might not be as extensive as that of a well-experienced professional engineer, which can affect the decision-making of developers and the community association.
Ordering the Transition Study Too Late
The transition study is only needed during the transfer phase. Ideally, it should be performed towards the completion of the construction while the developer is still on site and involved so they are able to address and correct the deficiencies discovered in a timely manner.
Delays in the process can hinder negotiations between the developer and the association, causing the association to shoulder expenses that should have been the developer’s responsibility.
In addition, failure to conduct a timely transition study might also entail financial mismanagement risks. It can reflect irresponsible fiscal management on the association’s part, discouraging homeowners and giving them the impression that their investment is not managed properly.
Relevance of a Properly Conducted Transition Study
A properly executed transition study serves as a factual basis for negotiations between the developers and the association. It establishes that construction-related issues are resolved quickly to preserve the building’s integrity.
A transition study may also be performed in conjunction with a reserve study, allowing community associations to budget reserve funds for covering repair and replacement costs of shared amenities. It enables associations to avoid special assessments and fulfill their fiduciary duties.
Expertise in structural, mechanical, and building envelope are keys to a successful transition study in NJ. Therefore, stakeholders or the Association should take care to hire the right engineer to do the job.
Lockatong Engineering offers transition study services to help community associations determine that the developer has successfully met all obligations and expectations concerning the project. Our comprehensive transition study covers:
- Review of all engineering and architectural drawings and the public offering statements.
- Visit the appropriate municipal offices to review public documents and resolutions concerning the development.
- On-site visual assessments to determine if any areas have not been built in general conformance with the design documents or acceptable work quality.
- Preparation of a questionnaire distributed to all residents to report concerns regarding their unit’s interior and help identify common issues (this option requires board approval).
- Inspection of the private spaces’ interior as allowed by the HOA and the residents.
- Creation of a Narrative Report of Transition, detailing deficiencies and the possible cause(s), recommendations for corrective action, and references to performance standards if applicable.
- Creation of a Transition Defect Budget for Correction, providing the association with an estimate of the costs for correction and the amount that association obligations could potentially exceed normal reserve funding.
At the conclusion of the transition study, the Association will decide how they want to proceed with the Stakeholder.
Accept the property as-is.
- Accept it with conditions.
- Decline to accept responsibility for maintaining the property until all work is completed.
Contact us today to learn more about our New Jersey transition study and other services.
