Understand REAC Inspector's Responsibilities to Ensure Efficient Inspection
HUD's Real Estate Assessment Center (REAC) conducts approximately 20,000 physical inspections of sites each year to ensure that residents are living in assisted housing units that are “decent, safe, sanitary, and in good repair.” During an investigation, REAC inspectors will look at specific areas of the site for any health or safety hazards. Problems that are uncovered can cost you points on your inspection score. If enough points are deducted, there could be serious repercussions for your site. These include possible administrative enforcement, increased scrutiny, suspension, and debarment from HUD programs.
To help the inspections go smoothly on the day of the scheduled appointment, you should know what's required of you and your staff on that day and have an understanding of the responsibilities of the REAC inspector. “Unfortunately, most owners and managing agents don't know what the responsibilities of the REAC inspector are,” says Kay McIlmoil, a REAC inspection expert and recent author of The REAC Book. To further exacerbate the confusion, some REAC inspectors don't explain how they're going to be conducting the inspection or explain the responsibilities of the clients during the inspection, she notes.
With the help of McIlmoil, we'll review the responsibilities of the parties involved. We'll also explain under which circumstances inspectors and owners have a right to call REAC to report a problem or to remedy a situation.
Before the Inspection Begins
On the day of the inspection, the site manager, maintenance supervisor, and another maintenance person, if available, should be on hand for the REAC inspection. Also, depending upon the owner, managing agent, or local housing authority policy, the regional manager, asset manager, or owner may also be available at the time of the inspection.
However, McIlmoil notes that if there are too many people in attendance, it may be difficult for the inspector to perform his or her job. The number of people inside a unit with the inspector should be no more than three, unless a quality assurance inspector is also in attendance, she says.
The REAC inspector also should inform the site representatives of the following before the inspection begins:
The purpose of the inspection;
The entity for which he or she is conducting the inspection—that is, the REAC contractor, mortgage servicer, or mortgage company;
How he or she will conduct the inspection;
That the inspector must be accompanied by a site representative at all times;
How vacant units are verified or inspected;
That the inspector is helping HUD conduct a survey of accessibility for physically challenged individuals;
That the site representative must open entry, bedroom, or bathroom doors that are closed;
That the site representative must test smoke detectors, auxiliary lighting, and exit signs that are higher than 8 feet above ground level;
That the site representative must have keys to all doors that are locked, including mechanical rooms, storage rooms, commercial spaces, and units;
That the site representative must move furniture, breakables, and other personal items that are blocking access to doors, windows, and mechanical rooms;
That the site representative must turn on and off stove burners and ovens;
That the property representatives, during the inspection, are only allowed to install a light bulb, light the pilot on a gas stove, plug in a bath fan, and reset a circuit breaker;
That the inspector will call out severity levels of violation and any health and safety deficiencies;
How the exigent health and safety deficiencies are recorded and reported; and
That the owner, managing agent, or PHA has the right to appeal.
Although HUD inspection protocol requires inspectors to call out deficiencies (what HUD calls violations) and the level of their severity, if the inspector doesn't explicitly explain that he or she will do so, gently remind the inspector to do so before the inspection begins. This way, as discussed in the next section, you'll be able to make a note and have a clear record of the location and the severity of each deficiency so you can describe errors more accurately in your appeal.
During the REAC Inspection
The REAC inspector may inspect the site, building exteriors, building systems, common areas, and units in any order that she chooses. The site representative must provide the REAC inspector with access to any inspectable building, common area, sample unit, room, or closet. And according to McIlmoil, if he doesn't provide access, then the inspector must select an alternate sample unit.
It's important to note that during the inspection, the site representative has the right to ask for an explanation of a deficiency and to see the UPCS definition of a deficiency. It's not uncommon for REAC inspectors to make errors during an inspection. For example, an inspector might cite you for a deficiency that didn't actually exist. Or you might be cited for a condition that isn't in fact a deficiency, such as missing door locks on bathroom doors, or that isn't a deficiency under your local code, such as window guards. HUD gives you the right to appeal scores you think are unfair.
But to support your claim, HUD requires you to include physical evidence to show that the inspector shouldn't have deducted points for the condition. “This is why it is critical that the property representative record good notes and take pictures of serious deficiencies during the inspection, not only for documentation purposes, but also to successfully appeal any deficiencies that the site representative deems to be inaccurate, unjustifiable, or egregious,” says McIlmoil.
Inspector Responsibilities, Calling TAC
REAC inspectors are to perform inspections in accordance with the Final Dictionary of Deficiency Definitions (PASS), the REAC Compilation Bulletin, and various Inspector Notices issued by HUD. After receipt of the information from the site manager and input of required information into the inspector's computer or Data Collection Device (DCD), the inspector, along with a site staff member, must visually verify and count all buildings. If there's a discrepancy between the number of buildings and/or units that have been downloaded to the inspector's DCD and the verified number of buildings and units, the inspector must call the Technical Assistance Center (TAC) for approval to proceed with the inspection.
Another reason an inspector may place a call to TAC is to report bedbugs. As a result of Inspector Notice No. 2010-01 issued in September 2010, inspectors must call the TAC and report any buildings and unit numbers with bedbugs that have not been treated or are currently being treated. The TAC must then give the inspector permission to proceed with the inspection.
The inspector may also call the TAC in the event that there are unusual circumstances that include (but are not limited to):
If a site representative is more than an hour late for the inspection or doesn't appear for the inspection and/or if the office is closed and locked;
If the residents haven't been notified in writing of the inspection;
If the owner or managing agent refuses to provide the requested information;
If the inspector is more than an hour late to the inspection;
If the inspector, with permission of the property representative, wants to start an inspection earlier than the scheduled start date and time;
If a weather emergency arises while the inspector is on property, such as an ice storm, that requires rescheduling of the inspection;
If site representatives are entering sample units before the inspector inspects them, except in the case of an emergency;
If site representatives are interfering with the inspection;
If the site representatives don't accompany the inspector throughout the entire inspection;
If a physical danger exists, such as gun shots on the property;
If the inspector's DCD fails to operate and the inspection needs to be rescheduled;
If the site doesn't grant access either to an elevator equipment room that houses other items to be inspected or to an elevator equipment room that serves as a pass-through to the roof or other common areas;
If the inspector can't meet the required building or unit sample size after using all alternate buildings and units in the sample; and
For other good cause.
When Owners May Call TAC
“Most owners and managing agents don't know that they have a right to call REAC under certain circumstances, either during the inspection or after the inspection,” says McIlmoil. The owner or managing agent may call the TAC at 1-888-245-4860 if any of the following serious violations occur:
If the inspector solicits or attempts to sell any goods or services during the scheduling process or during the inspection;
If the inspector is carrying a firearm or other weapon while on the property;
If the inspector commits theft or intentional property damage;
If the inspector commits fraud, such as not inspecting all buildings and all units in the sample;
If the inspector is unprofessional, rude, or obnoxious;
If the inspector threatens or commits an act of violence;
If the inspector commits sexual or other harassment while on the property;
If the inspector uses any site office equipment, other than an electrical outlet;
If the inspector repairs any conditions found during inspections, or endorses, recommends, or otherwise advises the use of specific individual or business firms for such repair work; or
For other good cause.
EDITOR'S NOTE: McIlmoil's well-received book on REAC inspections for owners, managing agents, public housing authorities, mortgage servicers, and REAC contractors and inspectors can be found at www.thereacbook.com. It includes information from the REAC Compilation Bulletin Rev. 2.1 and the PHA Interim Rule.
Kay McIlmoil, CPM, NAHP-e: REAC, FEMA, and FHA Certified Inspector, IMC Inspections, 4111 Lakeview Pkwy., Locust Grove, VA 22508; (540) 846-7677; www.imcinspections.com.
Top 20 Site Maintenance Deficiencies
HUD's Real Estate Assessment Center has put together a list of the top 20 maintenance problems that, if they had been repaired prior to the physical inspection, could have made a significant difference in the site's overall inspection score. They are:
[ ] Water heater—the pressure relief valve discharge tube should extend to within 18 inches of the floor.
[ ] Misaligned chimney—the vent stacks on gas-operated water heaters or furnaces should be properly aligned.
[ ] Missing HVAC covers—there should be covers on all baseboard heaters.
[ ] Access to the electrical panel—access to the electrical panels shouldn't be blocked by furniture or other items not easily removed.
[ ] Missing covers—electrical panels should have interior covers (aside from the panel lid box itself) in place to prevent exposure from wire connections.
[ ] Open breaker/fuse ports—open breaker and fuse ports should be covered.
[ ] Damaged door seals—the factory-installed seals on exterior doors, such as building or unit doors, should be in place and undamaged.
[ ] Damaged door hardware—exterior door hardware must either lock or latch properly and fire doors must function as designed.
[ ] Security doors—security doors shouldn't have dual-side key locks.
[ ] Kitchen—stove burners must work properly.
[ ] Plumbing—pipes and faucets shouldn't be leaking, and areas around any leaks should be cleaned up and repaired.
[ ] Damaged sinks/showers—any hardware items should be repaired, diverters must be working, drains should have stoppers, and hot and cold water handles should be in place and working.
[ ] Clothes dryers—should be properly vented to the outside from units or laundry rooms.
[ ] Storm water sewers—shouldn't be clogged with trash or leaves.
[ ] Sanitary sewer with damaged covers—the caps located in the grass on the exterior of a building that were damaged by a lawn mower should be cleaned out and repaired.
[ ] Trash chutes—hardware should be in place and the chute door should close properly.
[ ] Trash receptacles—receptacles shouldn't be overflowing and should be adequate in size for the property.
[ ] Auxiliary lighting—the back-up lighting should work, even when the test light doesn't work.
[ ] Leaking domestic water—there should be no leaks in the domestic water supply, including the hose bibs located on the exterior of the building.
[ ] Outlet and switch plate covers—the covers shouldn't be cracked or broken.
“Exigent Health and Safety” deficiencies that may be found include:
- Propane, natural, or methane gas leaks
- Exposed wires or open electrical panels
- Water leaks on or near electrical equipment
- Blocked or unusable emergency or fire exits
- Blocked fire escapes or ladders
- Missing or misaligned chimney for gas-fired water heater or HVAC unit
- Window security bars preventing exit
- Expired fire extinguishers
- Inoperative or missing smoke detectors
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