Do you know what defects will cost you the most points during a Real Estate Assessment Center (REAC) inspection? Do you know which expensive alterations are a waste of money? Do you know how to spend your REAC prep money wisely?
To win at the REAC game, public housing professionals must not only prioritize repairs to get the most bang for their buck—but also be pros at understanding how inspectors think, says REAC expert Hank Vanderbeek in his webinar, “REAC 101 Inspection Training: Avoid Noncompliance Penalties.” Inspectors have been known to make mistakes that sink your property with an unfair failing score. That’s why, when it comes to preparing for a REAC inspection, knowledge is power.
Don’t Expect a Level Playing Field
Problem: In past years, HUD has documented REAC policy clarifications and changes in various, separate documents. And all these disparate materials sometimes contradict each other, causing confusion—not just for your but for inspectors too, according to The Inspection Group. Happily, the latest REAC Compilation Bulletin 4.0, Version 3 looks like it’s aimed at solving this problem. In the Compilation Bulletin, you can find HUD’s detailed instructions to REAC inspectors on what to inspect, how to inspect items, and how to rank deficiencies.
Problem: Although you can access the Compilation Bulletin, inspectors still rely heavily on the RAPID 4.0 software, which contains the decision trees and definitions for citing deficiencies – and you don’t have access to that software.
What’s more: Also, the Non-Industry Standard Repairs (NIS) policy remains vague and allows inspectors to cite defects for any repair that the inspector thinks “doesn’t look right,” The Inspection Group warned.
Unfortunately, the NIS policy has caused inspectors in some cases to enter false data into the inspection report to override the decision trees, as well as caused REAC scores to drop across the board in both multifamily and public housing.
Strategy: Tackle the Items with the Most Points
So what’s a housing provider to do in the face of confusion and unfairness? The smart strategy is one that prioritizes preparation that packs the most punch.
Important: There’s a big difference between the most common deficiency items and the ones that will cost you the most points, according to an Aprio Wealth Management, LLC blog posting by Thomas Carr. The U.S. Department of Housing and Urban Development (HUD) has previously provided lists of the top 25 most-cited deficiencies in public housing and in multifamily housing.
Although you should certainly study these lists to make sure you aren’t making common mistakes, you should be far more strategic when devoting your limited time and resources to select inspection areas, Carr noted.
The most heavily-weighted inspection areas and items that will cost you the most points, according to Carr, include:
- Site
- Broken/missing fences (especially perimeter) and overgrown vegetation on fences;
- Cracks and tripping hazards on sidewalks and pavement;
- Storm drains that are blocked or partially blocked;
- Retaining wall damage;
- Sharp objects; and
- Damage to playgrounds.
- Building Exterior
- Damage or holes to exterior door;
- Cracks in foundation;
- Holes in wall; and
- Flat roof damage.
- Building Systems
- Sprinkler damage or not performing as needed;
- Elevator not working; and
- Any electrical issues.
- Units & Common Spaces
- Electrical issues;
- Clogged slow drains;
- Blocked egress;
- Mold; and
- Infestation.
Work Smarter, Not Harder
Don’t overlook: Among the various REAC deficiencies, exigent health and safety (EH&S) hazards will have the most urgency. Certain EH&S violations will require immediate repair, with HUD typically demanding repair or remediation within three business days, according to a factsheet by Leading Age. Inspectors must notify you of any EH&S violations before leaving the property following the on-site inspection.
Key takeaway: A thorough knowledge of the REAC rules and how inspectors think about difficult-to-apply defects are the most effective weapons to protect against an unfair REAC score, Vanderbeek says. Avoid losing points unnecessarily and spending money on repairs or alterations that you don’t have to by wisely prioritizing repairs and addressing those high-point defects before the inspector arrives at your property.
