Virginia and New Castle, Delaware Condo Safety Legislative Recommendations Published; Reintroducing Federal Condo Safety Financing
In 2022, Virginia passed SB 740, which required the Department of Professional and Occupation Regulation (DPOR) to study the adequacy of current laws addressing standards for structural integrity and for maintaining reserves to repair, replace, or restore capital components in common interest communities.
Coincidentally, the New Castle County Council (NCCC) in Delaware adopted Resolution No. 22-185, which established a task force to review and consider issues relating to condominiums and other common interest community buildings and structures. Members of CAI’s Government and Public Affairs team and several CAI members were appointed to both study committees.
Both Virginia and New Castle County Council have now published reports, which include many similar recommendations from CAI’s Condominium Safety Public Policy Report. Following the partial collapse of Champlain Towers South in late June 2021, CAI convened three specialized task forces to explore changes to laws and best practices that could help communities prevent a similar event and provide solutions for legislators addressing building safety. CAI published public policy recommendations for reserve studies and funding, building maintenance, and structural integrity. CAI believes these recommendations can support existing statutory framework for the development, governance, and management of community associations. Policy specifics may be found at www.condosafety.com.
Virginia’s report is titled “Department of Professional and Occupational Regulation Study of the Adequacy of Current Laws Addressing Standards for Structural Integrity and for Maintaining Reserves to Repair, Replace, or Restore Capital Components in Common Interest Communities pursuant to Senate Bill 740 (2022).” The New Castle County Council report is titled, “New Castle County Council Common Interest Community Task Force Recommendations.”
Please review the chart below to see which of CAI’s reserve study and funding and building maintenance and structural integrity public policy recommendations or similar and relevant references were included in each report:
|CAI’s Condo Safety Public Policy Recommendation
|New Castle County, Delaware
|Reserve Study and Funding
|Require reserve studies to be prepared with the National Reserve Study Standards.
|The CIC Board should update the Guidelines for the Development of
Reserve Studies for Capital Components (adopted September 5, 2019) to include recommendations and best practices for inspections of common property. These Guidelines reference the National Reserve Study Standards.
|A reserve study must be prepared in conformance with the most current edition of the Reserve Study Standards of the Community Associations Institute or other equivalent recognized
|Mandate reserve studies (Level IV Preliminary, Community Not Yet Constructed) pre/during construction and (Level I Full) at the time of transition/turnover from developer control to homeowner control. Reserve study with disclosures to be included with Purchase and Sale agreements.
|The Commonwealth of Virginia should require that independent, appropriately qualified entities perform reserve studies for CICs within two years of the issuance of the first occupancy permission (Certificate of Occupancy or equivalent), and every five years thereafter.
|The initial reserve study included within the disclosure documents must be based on full occupancy and completion of all common area components.
The reserve study prepared by the declarant is to be accompanied by a letter of adequacy prepared by an independent individual who holds a reserve specialist designation from the Community Associations Institute or another recognized qualification standard or an
independently licensed architect or engineer.
|Mandate reserve studies (Level I Full; Level II Update with Site Visit Review) that support community associations; including condominiums, housing cooperatives, and planned communities with major shared components for the member’s unit or dwelling or significant infrastructure/site improvements (i.e., roads, street lighting, accessory buildings, etc.) o Significant infrastructure or major shared components are to be defined as associations whose aggregate replacement costs exceed $10,000.
|The Commonwealth of Virginia should require the scope of reserve studies to include all the capital components of CICs. The definition of capital components should be refined to align with industry standards.
|The reserve study must include the ongoing cost and frequency of updating the study as well as the cost and frequency of both structural and facade inspections if required.
|Mandate reserve studies (Level II Updates with Site Visit Review) on a periodic basis.
|*Virginia state law already mandates reserves every 5 years.
|The reserve study must be updated during declarant control: Annually, when changes are made to the common elements; every 3 years; and at completion of construction to reflect the as-built conditions as well as the actual construction time frame to reflect when
construction for each common area component was completed.
The reserve study shall be updated after declarant control a maximum of every 5 years or as specified in the most recently prepared study.
|Mandate reserve funding for community associations; including condominiums, housing cooperatives, and planned communities with major shared components in buildings containing dwellings. Include practical legislative process for community associations to comply with funding requirements. Note: funding is based on the reserve study funding plan. Communities should be allowed an opportunity to slowly catch up to reserve funding upon passage of legislation. o Significant infrastructure or major shared components are to be defined as associations whose aggregate replacement costs exceed $10,000.
|Reserve contributions shall be adjusted in conjunction with budget development and review, to reflect changes in reserve funding resulting from expenditure of reserve funds or changes reflected in updated reserve studies.
The Commonwealth of Virginia should require community associations to
fund reserve contributions to levels recommended in then- current reserve studies.
|The minimum amount of reserve funding to establish “adequate reserve funds” is those monies specifically dedicated for repair or replacement of common elements and facilities that have reached the end of the established useful life, based on the most recent reserve study, without the need for special assessments or loans during a minimum of a 30-year cash flow projection or as defined within the Reserve Study Standards.
|Mandate disclosure; including summary of reserve fund financial condition, and funding plan, during annual budgeting (standardized disclosure).
|Mandate disclosure to new buyers of reserve study, including reserve study funding plan (standardized disclosure).
|Require reserve studies to be conducted by a reserve specialist, reserve professional, or other qualified professional, i.e., an engineer, an architect.
|Address funding for emergent life safety issue repairs by authorizing the association governing board to special assess or borrow funds without a vote of the membership
|The Commonwealth of Virginia should remove statutory language allowing owners to rescind special assessments for maintenance, replacements, repair, and
restoration and funding recommended reserves.
The Commonwealth of Virginia should authorize boards to have authority to borrow for maintenance, replacements, repair, and restoration of structural components and for funding recommended reserves.
|Prohibits owners from waiving/opting out of reserve funding requirements.
|The Commonwealth of Virginia should add a source of authority (statutory support) to enable CICs to fund reserve contributions to levels recommended in reserve studies.
|Cannot prohibit including structural and/or engineering inspections by appropriate professionals and the financial impact of said inspections in the reserve study and funding plan.
|Cannot restrict the borrowing from reserves for other purposes.
|Building Maintenance and Structural Integrity
|Provide for ongoing review of the major structural elements, owned, or maintained by the community association, of a multi-family residential building(s) of concrete, load bearing masonry, steel, or hybrid structural systems such as heavy timber including podium decks.
|The structural inspection requirements would be based on all buildings in which the
primary load bearing system (PLBS) is constructed of concrete, masonry, steel, or heavy timber, in addition to such buildings with structural slabs over unconditioned space.
The Primary load bearing system (“PLBS”) means the structural components
within a building comprised of columns, beams, and/or bracing that form a path by which external and internal forces applied to the building are delivered to the foundation.
|At turnover or before, developers must provide a complete set of the final approved architectural and engineering design drawings used for construction and obtain building permits as well as certificates of occupancy. In the event of changes in the structural components of the building, provide as-built drawings prepared by the initial design engineer, or where the initial design engineer is no longer available to provide the as-built drawings, then the drawings will be provided by a different design engineer, confirming structural adequacy. The drawings must reflect any subsequent changes to the structural components of the building. Perform ongoing inspections during construction to confirm general conformance to the plans and specifications. Inspections shall be conducted by a building official with sufficient expertise or a licensed third-party architect or engineer. A certificate of occupancy shall not be issued until the building inspector or third-party inspector confirms that the building was constructed in general conformance with the structural portions of the drawings, plans, and specifications.
|The Commonwealth of Virginia should require developers to provide record plans, including any change orders and significant field adjustments that require plan changes, to associations before or upon transition. Associations and management shall retain and maintain record building plans, including amendments and changes.
|Inspections are to be conducted under applicable industry standards for all buildings in this category and are to be conducted prior to issuance of a certificate of
occupancy and post issuance of the certificate of occupancy.
Pre-issuance of a certificate of occupancy: The inspector (a “design professional”
who is an engineer or architect with necessary qualifications) is to inspect and confirm that the primary load bearing system (“PLBS”) and/or the facade as-built is equivalent to the proposed design.
If a design professional determines that the PLBS and/or the facade is not in conformance with
the building plans, the applicant shall provide additional plans which show conformance with a
modification to the PLBS and/or facade.
The creation of or repair, renovation, alteration, or modification of the PLBS and/ or facade of a covered building required pursuant to any inspection shall be conducted by a design professional prior to issuance of a certificate of occupancy.
|At turnover or before, developers must provide a preventative maintenance manual to the association to be undertaken by the association over the life of the common area components including structural components. The developer shall deliver the maintenance manual to the association. The maintenance manual shall provide the maintenance schedule and timing for such maintenance, including periodic inspections of the structural components of the building. The developer shall include in the association budget or reserve study, as appropriate, the funds necessary to perform the scheduled maintenance.
|At turnover or before, developers must provide to prospective purchasers a summary of the future Building Inspection Requirements outlined below, together with the projected cost of same over time.
|Mandatory building inspections of the major structural elements owned or maintained by the community association for all multi-family buildings of concrete, load bearing masonry, steel, or hybrid structural systems such as heavy timber including podium decks.
|For new construction, the first inspection shall be conducted no later than five years after occupancy of the building.
|Initial Structural inspection where a certificate of occupancy was issued after the effective date of the new law: An initial structural inspection shall be undertaken by a design professional within 15 years of the effective date of the new law passed by County Council.
|For existing buildings more than 10 years old, the first inspection shall take place within 2 years of passage of new statutory requirements. (The purpose of the first inspection is to act as a baseline for future inspections as well as to identify issues of immediate concern. Each periodic inspector’s report shall recommend when the next inspection shall be conducted, which, shall not exceed every 10 years during the first 20 years after construction and every 5 years thereafter.)
|The Commonwealth of Virginia should require visual, non-invasive inspection of structural components by a registered design professional 30 years after
substantial completion and every 10 years thereafter. In coastal contexts, Virginia should require visual, non-invasive inspection of structural components by a registered design professional 25 years after substantial completion and every 10 years thereafter.
|Periodic inspections after the first inspection shall take place every 10-years for the first 20 years since construction and 5 years thereafter unless the prior inspection recommends sooner. (The purpose of the reinspection(s) will be to monitor progressive deterioration based on a comparison to the prior inspections and to identify issues of immediate concern as well as to establish a recommendation for the next inspection which, in any case shall not exceed 10 years for the first 20 years after construction and 5 years thereafter.)
The design professional will determine the time for the next structural inspection,
which shall not occur more than 10 years after the preceding inspection during the first 20 years following issuance of a CO, or more than 5 years after a preceding
inspection if the covered building is more than 20 years old.
If the design professional determines that unsafe and imminently dangerous conditions exist such
that the observable damage compromises the structural integrity of the PLBS, immediate action is required. When such conditions are discovered, remedial steps to avoid harm to people or
property shall be taken as required under New Castle County Code Section PM 109.
Structural Inspection Reports:
The design professional must issue a written report consistent with industry protocol describing the condition of the PLBS, including among other factors the need for
corrective maintenance or repairs for the PLBS. The report must provide additional information necessary to evaluate all concerns. Written reports issued by the design professional must be provided to the covered building owner(s) and shall be made available
to any resident of the covered building upon request and must be provided to the Code
official and the Department, and posted in a prominent location in the building, and recorded with the Office of the Recorder of Deeds.
|At any time, there is concern about the safety or stability of the building structure, an inspection should be conducted immediately.
|The Commonwealth of Virginia should require additional professional
inspection (including, but not limited to invasive testing, if indicated) if the required structural inspection indicates weakness that could compromise the integrity of the structure.
|Scope: The protocol for inspection can be found in the ASCE Standard SEI/ASCE 11-99 (latest edition) Guideline for Structural Condition Assessment of Existing Buildings or other industry standards. The initial Baseline inspection is identified as the Preliminary Assessment within this guide. If necessary, a Detailed Assessment as defined within this guide may be required.
|The inspections must be conducted by the following assuming they meet the minimum requirement of being a licensed engineer with appropriate qualifications.
· Local municipal building inspector if a licensed professional engineer, in good standing; or a
· Licensed engineer hired by the building inspector, the community association, or the building owner
|The Commonwealth of Virginia should require visual, non-invasive
inspection of structural components by a registered design professional 30 years after
substantial completion and every 10 years thereafter. In coastal contexts, Virginia should require visual, non-invasive inspection of structural components by a registered design
professional 25 years after substantial completion and every 10 years thereafter.
|Communication Requirements to Governmental Authorities: If a safety concern is identified in the inspection reports the inspector must notify the local governmental authorities in writing and record the date and receipt of notice.
|Funding of emergent life safety issue repairs: The governing board of a community association must have the power to impose a special assessment or borrow funds necessary to make immediate repairs without a vote of the membership. Notwithstanding the provisions of the community association governing documents, empower the association governing board to impose a special assessment or borrow funds without a vote of the membership to fund emergent life safety repairs
2023 Building Safety Month and Federal Condo Repair Financing Call to Action.! The International Code Council (ICC) has proclaimed May is 2023 Building Safety Month, an international campaign designed to raise awareness about building safety. This campaign reinforces the need for the adoption of modern, regularly updated building codes, and helps individuals, families and businesses understand what it takes to create safe and sustainable structures.
CAI asks you to advocate for building safety within your community by urging Congress to support condominium safety. Please urge Congress today to reintroduce H.R. 7532 – SAFER in Condos Act of 2022 and H.R.8304 – Rapid Financing for Critical Condo Repairs Act of 2022. With the advent of a new Congress, some form of these bills needs to be reintroduced. Both proposals will provide Federal Housing Administration low-interest loan programs to help homeowners and condominium and housing cooperative communities fund critical safety repairs. Click here: https://www.votervoice.net/CAI/Campaigns/104879/Respond