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When a property fails a REAC Inspection, the property owners and managers often take it personally. It can feel like a gut punch, and often the initial response is defensive. A defensive response is entirely normal; it’s even human. However, this response often gets property owner in trouble. So, the question is: what should you do when you receive a failing REAC score?

From our experience, the following steps are the best steps to success:

    • Step 1: Accept the Findings
    • Step 2: Review Options for Appeal
    • Step 3: Plan a Survey and Response
    • Step 4: Perform Repairs/Prepare for Future

Accept the REAC Findings

Even if you disagree with the REAC inspection results, the best thing to do is accept the findings and prepare to move forward. In many cases, property owners and managers can find themselves stuck in a mode where they want to resolve their differences with the inspection or the inspector.

The best first step is acknowledging the findings, letting any perceived unfairness go, and committing to taking a stance that you will make changes to prevent future issues. In more cases than we can count, grievances with the failing inspection created a veil of distortion, which prevented resolving the failed score effectively.

Review Options for Appeal

Every inspection should be reviewed for an appeal, as there may be discrepancies with HUD’s rules and requirements, resulting in a score adjustment. However, remember, a REAC appeal is not a vehicle to complain about the inspection itself or the inspector. It is simply a forum to point out discrepancies and provide independent verification to justify your request. In many cases, a REAC appeal can increase the score above 60 and resolve the notice of default. However, even if your appeal is successful, a low REAC score should become a moment of self-reflection, producing new procedures that better address everyday compliance.

We offer a review of REAC Inspections to help you understand what may or may not be appealable.

Plan a Survey and Response

Even if you are going to file an appeal, you should immediately start your full survey of the property, including all areas and units – not just the findings cited by the REAC Inspector. It is also best to use an independent team to conduct the survey, and if possible, someone with experience not just with REAC but with failed inspection resolution. Most importantly, the team that will be responsible for the repairs should not conduct the inspection.nnThe survey should not only include every part of the property – it should be an extremely critical look at every square inch of the property. At US Housing Consultants, we pride ourselves on never letting any deficiency go unobserved – under every rock, in every dark space, and normally unused space, we look for and find hitherto unknown problems.

This is your moment to get it right because if you don’t and future inspections result in failing scores, it becomes increasingly difficult for a managing agent or owner. As the owner had to sign a verification that the property no longer had any deficiencies, a failing score often results in an owner’s abilities or honesty being challenged.nnIf your property survey results in a list of deficiencies that cannot be fixed in the timeframe cited on the Notice of Default (this is typically 60 days), the best course of action is to request additional time and provide a comprehensive plan and timeline for your repairs. When the owner signs the “Owner’s Certification of Completion of Repairs“, the owner should feel confident in saying that “the project is in compliance with the physical condition standards of 24 C.F.R. § 5.703″. 

Completing the Repairs, Resolving the Notice of Default

Of course, the last step is doing the work and ensuring that the work is completed professionally. This means use the right materials and do the work in a workmanlike manner. Property owners need to make sure there are no shortcuts or bandaids; these practices don’t just not help – they make the situation worse.

Most importantly, as you go throughout this process, remember that you certainly are not alone. Every day we meet new clients who had previously unblemished records and find themselves responding to what was previously unthinkable. Everyone can fail, from the small property owners to national companies with large portfolios.

From what we’ve seen, one of the most important ingredients to success is a positive attitude. So, keep your head up, your mind focused, and you’ll get through it and hopefully find a brighter future on the other side.

Scott Precourt is the Managing Partner and Founder of US Housing Consultants.