Milestone inspections and reserve studies: what they mean for condo owners

A milestone inspection is a structural inspection by a licensed engineer or architect. It applies to condominium and cooperative buildings that are three habitable stories or more in height.

The first inspection is due by December 31 of the year the building reaches 30 years of age, counted from its certificate of occupancy, and then every 10 years after that. Where local conditions call for it, such as proximity to salt water, the local building department may set the first inspection at 25 years instead.

The inspection has two phases. Phase one is a visual examination. If it finds no signs of substantial structural deterioration, that is the end of it. If it does, phase two looks more closely at the areas of concern and recommends repairs.

When the association receives the official notice that an inspection is required, it lets unit owners know within 14 days, including the date the inspection is due.

A structural integrity reserve study, often called a SIRS, looks at the components that matter most to the building's safety: the roof, the structure including load-bearing walls, fireproofing and fire protection systems, plumbing, electrical systems, waterproofing and exterior painting, and windows and exterior doors. For each one it estimates the remaining useful life and the cost of replacement.

Condominium buildings of three or more habitable stories complete one at least every 10 years. The association's budget then funds reserves for those components based on the study's findings, rather than by an annual vote on whether to fund them.

In many buildings, assessments have risen as reserves are funded on this basis, and some buildings have levied special assessments for repairs the inspections identified. That is a real cost, and it is the cost of a building that stays safe, insurable, and possible to finance and sell.

Buyers, lenders, and insurers now ask about these reports. A building with its inspection complete and its reserves funded is in a stronger position on all three fronts, which protects the value of every unit in it.

The engineer or architect gives the association a report with a summary of its findings and recommendations. If you would like to understand your own building's situation, the manager or the board can tell you where it stands.