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Handbook of Rules Regarding REAC Inspections Updated (8/22/2014)

REAC Compilation Bulletin Updated (8/22/2014)

On August 12, 2014, HUD REAC notified active REAC Inspectors of a change to the HUD REAC Compilation Bulletin, the document that outlines the rules and methods for conducting REAC inspections, such as when certain areas of the property are and are-not inspected and other details about the “nuts and bolts” of conducting inspections.

The majority of the document puts in writing those practices that have been part of the accepted day-to-day for several years, such as how inspectors should handle commercial spaces in buildings without a HUD-insured mortgage. There are new sections dealing with mobile home parks and group homes, and dealing with model units and other areas previously unaddressed. These additions seem to be because of the increased number of properties participating in HUD mortgage programs that are outside the traditional HUD-subsidized programs.

The following is a shortlist of the changes in the REAC Compilation Bulletin that we think would be most interesting:

Commercial Spaces

There are two rules here: one is that spaces that are “commercial” on properties without a HUD-insured mortgage will not be inspected. This refers to areas such as rented office spaces, storefronts, and other commercial areas. The second rule here relates to when equipment for those commercial spaces is located in a part of the building where other building equipment is found, such as a basement that contains equipment for the building as a whole as well as the commercial space. In these events, if the inspector sees an issue with the equipment, they are to record as an “Other Hazard”, which is a non-scoring category.

Offline Components on a Property

Components that have been entirely removed from service should not be evaluated, assuming that some reasonable attempts have been made to remove the system from service. Examples of this include trash chutes that aren’t in use anymore; the doors would need to be welded shut or screwed shut to show that the system is permanently off-line. Other examples include an old boiler in a mechanical room that is no longer in use, the boiler would need to have pipes removed and some indication provided to show that the owner has clearly endeavored to permanently take the item out of service. If there is “any doubt” that the item can be brought back into active service at some point, then it should be inspected for deficiencies.

Model Units

Properties with model units that are used for marketing should be considered part of the building’s common areas and inspected if that building is selected as part of the property’s sample. If the manager states that the model unit is available for rent if requested by an applicant, then the unit should be considered “vacant”.

Exposed bare wires

Wires which are exposed are now defined as “non-insulated high voltage conductors, connectors, and terminals. Fully insulated and capped conductors in an open junction box are not a defect. [However, exposed bare wires in a junction box that expose uninsulated connections will be cited as exposed wires]”. Essentially this is saying if a junction box is missing a cover and there are no exposed bare-wires, then it should not be recorded as a defect. We recommend caution with this and the best practice remains to ensure that all junction boxes have secure covers at all times.

Emergency Call for Aide Systems

Call for Aid Systems will not be evaluated if all of the pull cords have been removed and all that remains are the light fixtures over the doors [or auto release door hardware].

Commercial or Leased Space

Commercial leased space is defined as an area of a building or separate building that is being rented to a specific third party business or organization and is not being used as a residential unit.

1. On all properties, with exception to Project-based Section 8 Multifamily Housing properties with no active loan. Commercial or leased space must be inspected and the deficiencies observed recorded in the appropriate Common Areas. Components and other equipment represented as being owned by the lessee need not be inspected for proper operation (e.g., ovens, freezers, shelves, etc.). All Health and Safety deficiencies on items owned by the lessee must be recorded under [Common Area], [Health and Safety], [appropriate floor level], [Hazards], [Any Other – This Does Pose a Risk of Bodily Injury]. If the property provides documentation from the local HUD Field Office that identifies specific leased commercial space as being exempt from the inspection, it will not be inspected. In the comments field on the Development (PHA)/Property (MFH) screen the inspector must reference the HUD documentation and include the effective date range for the exemption and the name of the HUD staff authorizing the exemption.

2. Project-based Section 8 Multifamily Housing properties with no active loan. Commercial leased space will not be inspected. All other non-residential spaces in a sample building must be inspected. Do not include a building in the profile if it only contains commercial leased spaces and there are no other areas of the building that the Section 8 residents would utilize.

C. HUD-insured Property

Any property that has an active HUD-insured mortgage. The inspector is required to inspect the sample units based on the total number of units and to inspect the Site, Building Exteriors, Systems, and Common Areas.

Inaccessible Areas of a Building (Such as Mail Rooms)

A. Common Areas General Information

1. The property representative must provide access to all building common areas. Inspectors are not required to move items to gain access to an inspectable area. For the purposes of the REAC inspection, all areas that are not residential units are considered common areas and must be inspected. Exceptions are:

a. Areas of a building that have been blocked off by the POA for any reason should be made accessible to the inspector such as rooms where the door has been covered with sheets of plywood using drywall screws. If the inspector is not provided access then the inspector must: 1) secure a REAC TAC reference number and 2) make an appropriate note in the Building Comments field located on the Building screen such as, “Doors covered with plywood. POA considers this area sealed off and has denied access.” Under certain circumstances, properties are permitted to take sections of a building off-line. Guidelines for taking sections of a building offline are listed in Part I: Buildings and Units, Sections F and G on pages 14, 15, and 16 of this document.

b. For any areas of the building that the POA is not authorized to enter, such as a mailroom in a high rise building or a cell phone equipment room, the inspector must provide a clear description of the room that could not be accessed in the Building Comments field located on the Building screen along with a comment, such as “POA states they are not authorized to enter mailroom located in the lobby.”

2. The property representative must provide the inspector with access to physically inspect for correct operation all inspectable items, such as doors, windows, and light switches. If the inspector is not provided access to inspectable items, the inspector is to record these items as defective.

3. Medical-related equipment found in nursing and group homes is not included in the UPCS software and must not be inspected.

4. It is not a UPCS inspection requirement for the property to provide smoke detectors in Common Areas. However, if there is a smoke detector in a Common Area it must be tested and it must function.

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