Why Did My REAC Score Go Down So Much?
Over the last few months, our office has been busy answering phone calls from hundreds of property owners across the country – many of them with a similar question – why did my score go down so much? They say, "I did everything the same as last time, but this time, the score was awful." Some start by blaming (a) the process, (b) the inspector, (c) changes to the inspection code rules, and (occasionally) the White House.
Our staff of consultants try to help back these owners and managers off the ledge, and explain that the reason their score dropped is outside any of the standard concepts. We have to tell everyone that there is a good chance that your last inspection (the one that you based your knowledge of the process on) could have been sloppy or unprofessional, and the first step is to drop all preconceived notions and just see what needs to be fixed.
So - what is the answer? The answer is pretty simple: people need to receive training on understanding REAC and UPCS Inspection Codes. Obviously we are partial to our training, but you can take one of those other ones too. In any case, when you think about who is going to attend, remember - not just your maintenance staff, but also everyone up and down the line needs training. If an inspection were to go sideways, receive a sub 30 score, flagged your 2530, get your investors hopping mad – who would get involved? Make a list. Those people all need to receive training on REAC.
REAC isn't just about having a "good property"; it's about being "compliant", just as your tax return isn't just about "paying taxes" but about creating a return that meets the IRS's criteria.
The following are observations that we have made over the last ten year- these are descriptions of different types of personnel in the industry who contribute to reasons why a property receives a failing score and need training, as do their superiors – so they might recognize when these characteristics appear.
- The Detached Executive – Some executives will send the responsibility for physical compliance down the line, remaining detached from the process. When it comes time to draft an appeal to reverse a terribly failing score; the inevitable question is: "how did this happen, didn't I give it to [so and so]." The most effective executives are the ones who take the time to have a cursory understanding of the physical inspection requirements, so they can delegate and follow up – and ask all the right questions along the way.
- The Legislator – Some project staff have been known to take it upon themselves to decide that certain elements of the UPCS Inspection Code "don't apply to them", because "it shouldn't" or "I disagree with it". So, the next time you ask your property staff "is the property all set?" keep in mind, the "yes" you are getting could include items that were not addressed because they were determined by the project staff to not apply. (Don't laugh - this is more common than you think).
- The Instant Expert – We frequently hear "I have been through two inspections, so I'm all set." Even if that number was several hundred inspections, it's the wrong attitude. Like with everything in life – get a second opinion. Find a system that works, but don't be afraid of challenging it from time to time. Maybe you are "expert" at the process, but as an attorney might say, "a lawyer who represents him/herself, has a fool for a client."
Here's a story (factual, obscured into fiction to maintain privacy) that is on-point: a property owner received a 95a, 98a, and 90a over the first decade that REAC was in existence. Last year, they had an inspection in January 2013 and received a score of 55c. They immediately appealed, and used as the basis of their appeal that the inspector was biased and generally a second cousin to Stalin – sailors everywhere blushed at the language used to describe the inspector. The appeal was denied, and they were given the opportunity to get the property ready for a re-inspection, if the property passed the second inspection -- the failed score would be removed.
Since they believed that they had "done nothing wrong" on the first inspection, they did very little to prepare for the re-inspection apart from correcting a few of the big issues noted in that first failed inspection. The owner and the President of the management company asked the site staff if the property was ready; the site staff said they were, and no other steps were to be taken. The investors in the property at this point hired US Housing Consultants to go in and do an assessment of their readiness; we did an inspection, created a score following the REAC guidelines using InspectCheck, and the project scored a 22c with over 400 findings noted in our report.
The owners, managers, and everyone else objected to the findings, said that they (a) don't apply to their property because it was (1) a co-op, (2) more than 20 years old, (3) a tall building, (4) an elderly building, (5) because they had done well before. Finally, the site staff relented, and said that they'd fix everything, but when they said "fix", they meant only those items that "we believe applies to us". Stubborn, eh? They failed again with a 40c.
Don't laugh too much, this property was considered to be one of the best in the region. It has been called "the best managed property in the county for five year's running." The mayor of the city gave the owner a key to the city for turning around what had been a blighted area. On paper, they seemed like the perfect example of what every property should be; until you opened the door to the mechanical room.
Owners and executives need to be part of this process from beginning to end if they wish to mitigate the risk of failing a REAC inspection. Contact us for information on upcoming trainings, or for information on our private training packages, including onsite training, webinars, and group rates at our public events.
Feel free to contact us with any questions about this or any other compliance issues. You can search our website at www.us-hc.com for past issues of "The Score" or to look at our upcoming seminars.