Reserve component failure modes – replace them on schedule or not?
Association Reserves Inc.
By Robert M. Nordlund, PE, RS
March 2011
When something fails, it fails, and you replace it. Right? Well…
sometimes, sometimes not. A leaking roof has clearly failed. But when
do you decide that the old (ugly) gold shag carpet and beaded doorway
in the clubhouse has “failed”? Should replacement of the pool heater be
handled differently from the boiler that provides hot water to the
entire association? And when the Reserve Study says there is zero life
left, do you go ahead and replace it, or do you wait?
In the field of Reserve Studies, there are five general categories of failure modes.
1) Regular
Components in this category are items like wood painting and asphalt
seal coating. These components require regular sealing or rejuvenation
or the association will face significant related repair or replacement
expenses. These projects are best to execute on schedule, per the
Reserve Study. You may be able to squeak a little more life out, but it
is often at the cost of higher repairs downstream.
2) Watch & Decide
Roofing and fencing are typical components in this category. The
gradual approach of failure may be apparent, but the actual failure
point may be delayed or accelerated due to weather or maintenance. For
these projects, you can often make a wise decision to wait another
year, if the asset is still intact.
3) Benign
Components in this category are non-critical components such as pool
heaters or clubhouse trash compactors. It is not a problem to simply
wait until the component fails, because it not a big deal for the
association to survive a few days, waiting for the replacement
component to be installed. So if the Reserve Study shows zero life,
wait.
4) Catastrophic
These are components whose function is essential to the association:
the central hot water system, entry gate systems, etc. Failure of any
of these components is always unwelcome, and it causes significant
expense or disruption in the association. Do these projects in advance
of failure, on your terms, on schedule, to minimize inconvenience to
the homeowners.
5) Obsolescence (technological or aesthetic)
These components have functional lives longer than they can be
described as “bringing value to the association”. The gold shag carpet
in the clubhouse, the old and dated appearance of the elevator
interior, and the old computer used by the on-site manager are three
good examples. While you can generally get away with deferring these
projects another year, you do so at your own detriment. These are
generally the low cost projects that yield a high impact (reward) to
your sense of well-being and style. So do them if at all possible, on
schedule.
In summary, understanding the different reasons why a component needs
replacing helps you make wise decisions about when to replace the
component. So be aware of the projects scheduled to occur this year,
and make wise decisions, not “penny-wise and pound-foolish” decisions.
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