Managing a Major Project in a Condo Association

All Boards and Management need to know how to manage a major project in a Condo Association.  All major systems will degrade over time and eventually will need to be repaired or replaced.  Examples include roofs, garages, facades, elevators, HVAC systems, fire alarms, etc.  For our purposes, a “major” project will be defined as one that is paid for out of reserves and is around 10% or more of the Association’s annual revenues.  These projects are also characterized by being technical in nature – they likely involve engineers and directly affect the safety and security of the building as a whole.  Of course, these are all baselines – a smaller project could still be complicated and fall into this category.  

This mini series will be dedicated to walking you through the process of a major project in a Condo Association and ensure that you’re positioned for successfully carrying one out.  Today’s article will focus on an overview of the full life cycle, and future articles will provide a deep dive into each individual step.  

This series will assume two things.  The first is that you’ve identified a system needs replacement – there are a number of ways this will happen, from the system outright failing (say, an HVAC system) to testing for deterioration (say, a concrete garage).  The second is that you have the money for the replacement in your reserves.  I’ll come back to those topics in the future, because both are worth discussing further.

Step 1: Hire an Engineering Consultant to Serve as the Condo Association’s Representative

Since this is a major project, it is going to exceed your Board and Management’s technical capabilities.  You may not have a structural engineer on your Board, for example, and even if you did, they’re a Board member, not the person doing the work.  Remember, the job of a Board is to set policy and make decisions based upon receiving qualified input – not micromanaging everything.  So let’s get you some qualified help for your project.  If you’ve already got a firm you trust and have worked with in the past, you can skip reading this step.  

No matter what the project, you’ll be able to find an engineer who can represent your Association.  Their cost will scale with the size of the project, so even for smaller projects, you can hire an engineer.  There are many things to look into when selecting a qualified engineer, but here’s a quick overview of what you want to do:

  • Get references, and speak to those references – ideally other entities/building owners who worked with them in the past.
  • Evaluate for their technical skills – have they managed similar projects of similar size and scope?
  • Evaluate their ability to communicate.  You’ll be working with them closely, and if they’re aloof or incapable of explaining things to a layperson, they may not be a good fit for a residential Condo project.  
  • Clearly lay out what you expect from them.  Will they need to make monthly reports to the Board?  Interact with Owners?  Work off-hours?  If not scoped, these all could end up being billed at an hourly rate.

Finally, I strongly recommend having your lawyer review the contract with your consultant prior to signing.  The consultant is going to have a lot of power and responsibility, so make sure the contract is legally sound and protects the Condo Association.  AIA standard contract documents are generally available (for a fee), and should be used whenever possible.

Step 2:  Design and Bid Phase

Now that you’ve got a consultant, they’ll work with you to design and scope the bids to repair/replace your system.  Depending on the project size and intrusiveness into your Owner’s quality of life, this phase can get quite complicated.  For example, you might phase the work slower to minimize disruption, or faster to save money.  Money will be a big factor in this step – you’ll need to decide what’s important to you and if you’re willing to pay for it.  Also consider indirect costs to the project – you may need to hire temporary workers for your building’s staff or, in rare cases, you may need to relocate Owners to hotels, etc.  A project is often more costly than just what you’re paying the engineering consultant and project performer (i.e., budget for contingency).  

To manage a major project in a condo association, you need a good design.
To manage a major project in a condo association, you need a good design.

Another important thing to consider is having the design that your engineering consultant carries out be peer-reviewed by another firm.  This is a process where another firm ensures the design is sound and meets the Condo Association’s needs.  This may not be needed for smaller projects, but it can be an important step when managing a major project in a Condo Association – it makes sure you’re getting the best value and that you’ll be getting you money’s worth by adding another layer of accountability – another “pair of eyes.”  

When the design phase is complete, you will move into the bid phase:

  • The request for proposal will go out and your consultant will collect and score bids for you from qualified project performers.
  • Review the bids with your consultant and narrow it down to the best 2-3 bids.  
  • Interview the top bidders and make a selection.
  • Negotiate the best price possible, have your lawyer review the contract, and sign it.  Make sure a lawyer reviews it!  

Now we move on to the fun part: letting your Owners know what’s coming.

Step 3:  Communicate with Owners

Now that you have a consultant and a project performer, it’s time to let your Owners know that a major project is imminent.  Although you’ve probably been talking about this in Board meetings for some time, chances are you have many uninformed Owners.  You will need to develop a communications plan to ensure your Owners are well-informed and to minimize disruptions to ensure.  Communication is particularly critical in projects that interrupt Owners’ daily routines – perhaps in your garage project, for example, you need to temporarily relocate parking.  My Communications 101 article has some good general tips, but you’ll also need to:

  • Prepare a packet of information for all Owners that explains the needs of the project.  Focus on outlining why the project is important (i.e., old roof means leaks, which are bad) and quantify the impacts wherever possible.  
  • Consider holding a “town hall” style meeting with your engineers and project performer present where you present and describe the work while allowing Owners to ask questions.  
  • Ensure that your Board and Management are ready for an increased volume of communication with Owners, and have a plan to answer them in a timely manner.

Now it’s time to begin the project itself.  

Step 4:  Project Execution

Execution is where the fun REALLY begins.  This could be very straightforward – perhaps it’s only a week’s worth of work so the impacts are comparatively minimal.  But many major rehabilitation efforts can last months or even years, which has a strong impact to quality of life.  Some things to keep in mind:

  • Be ready to monitor the field reports from your project performer and engineering consultant.  Your Management will have lead on this, but you also need to stay informed.
  • Expect the unexpected.  Your project performer may damage things unexpectedly. They may find new problems or unforeseen conditions. Who knows.  Be ready to make important decisions relatively quickly.
  • Expect Owners to be upset from any impacts to quality of life.  Some will complain just to complain (be polite and move on), others will demand free stuff like hotel rooms (deny in almost all cases unless legally obligated to do so), etc.  This will not be fun for you as a Board.  Make sure you’ve got a process to triage, prioritize and respond quickly.
  • Factor in the administrative impact of the project to your Management and other staff.  If applicable, include the support details in their duties and annual review.  Consider hiring part-time staff if necessary to support them.   
  • Keep tabs on your Management and staff’s morale.  They will be dealing with many more unhappy people than you will.  Consider everything from pizza parties to gift cards to even cash bonuses depending on the scope of the project.  

As bad as this all sounds, you will get through it.  Hold the line, be polite and compassionate, but also remember your fiduciary duties to the Association.  

Workers on swing stages are a common site during project execution.
Workers on swing stages are a common site during project execution.

Step 5:  Proper Closeout and Preventative Maintenance

You’ve survived a major project in a Condo Association!  Congratulations!  Now’s the time to start thinking about a preventative maintenance program.  You may already have one – perhaps that’s how you decided it was time to repair/replace the system – but if not, you should work with your engineering consultant to develop a plan for maintaining your newly rehabilitated system correctly.  This will maximize the useful life of the system and ensure your investment is well-maintained.  

Conclusion

Major projects in your Condo Association are no fun, but they are a part of living in a condo.  Proactive management, being thorough, hiring the right vendors, and communicating well will ensure that the projects are minimally disruptive and allow your Condo Association to rapidly return to normal.