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Why Do Aquatherm Pipes Fail?

Domestic water supply applications of Polypropylene (PPR) have been commercialized largely under the Aquatherm trade name and manufactured in Germany.  After a period of reportedly reliable performance in Europe, Aquatherm began to market the product in Australia, Canada, the US, and elsewhere.  Recently a string failures started to appear; first in Australia and now increasingly in the US. 

After fire, water damage is the most expensive peril that a building owner may face.  Many of these are winding up in the courts in what looks like the three-way shoot out at the end of the Clint Eastwood movie, The Good, The Bad, and The Ugly.  The contractor is pointing at the manufacturer who in turn is pointing back at the owner/operator who is pointing alternately at the contractor and the manufacturer. 

For the record, I like PPR for many reasons, but there appears to be 3 main vulnerabilities with PPR: the manner in which it is clamped, the temperature of the water, and the water chemistry – specifically the presence of copper ions.  I call it the witches brew. If all three vulnerabilities are present, then the likelihood of failure is very high. If only one (or maybe two) of the vulnerabilities are present, the likelihood of failure seems substantially lower. 

The problem is that each of the litigating parties may be responsible for at least one of the vulnerable conditions. Therefore, it is tremendously difficult to assign a percentage of the blame on any single party especially where the absence of any one condition may result in no failure.

Aquatherm had claimed that standard pipe clamps could be used with loosely specified modifications.  In practice the pipes are sized in the Metric system and the clamps were sized in the Imperial measurement system.  Further, the materiel is soft so there was little feedback for the mechanics accustomed to using a torque wrench.  Often we’ll find the failed piece deformed inside the clamp.  Is the contractor to blame or Aquatherm?

In another case, Aquatherm specified strict temperature and pressure limitations.  In the real world, we found two boilers set up incorrectly causing occasional fluctuations beyond the temperature limits – normally not a problem with most other piping systems.

In another case, the boilers had CuNi (Copper/Nickel) heat exchangers that, if not correctly installed or maintained, may be a source of copper ionization.   How is the owner / HVAC contractor to know about these details?

One of the advantages of Aquatherm is that it can be run at a much faster flow speed than other pipes.  If you run water too fast in a system mixed with copper, the turbulence can erode the copper releasing ions to the water system, which can then attack the Aquatherm.  Most of the retrofits will have mixed systems in one form or another.  Whose responsibility is it to manage mixed systems?

I have been contacted by attorneys on both sides of more than one PPR lawsuit. Most lawyers are looking for a sharp knife to cut their client free from culpability.  When I share my thoughts on the topic, based on real-life experience, I’m rarely called back. The last thing they want to hear is that there is plenty of blame to go around. I believe that an inherent bias is baked-in, leading to closed settlements.  

So, Why DO Aquatherm Pipes Fail?

The answer is simple.  Information needs to flow to the industry without fear of repercussion so that owners and operators and installers can mitigate the risk.  Most piping materials seem to go through a period of failures until the industry can see how they actually perform over the long term. PolyButylene, CPVC, and PEX have all had their time in the hot-seat.  Polypropylene, in my opinion, holds great promise in some applications.  Few people want to talk about the details and court settlements are often sealed, so the public and the industry are uninformed. 

Instead of learning from mistakes, a new game plays out anew for every instance of failure.  This is counterproductive. What really needs to happen is that each of the parties need to fess up, mitigate the failures, and then share information with everyone else so that the problems can be ironed out as soon as possible and this innovative material can achieve its potential.

 

The Future of Real Estate Transactions – Engineering Inspections

According to Realtor.com, the average amount of time to close on a house is 50 days after listing. By contrast, houses sold by auction are instantaneous. In both cases, several weeks of preparation are required, but the closing process itself is drastically simplified by an Engineering Pre-listing Inspection (EPLI).

What if we could adapt the speed, fairness, and predictability of the Real Estate auction process to the scale and security of the conventional Real Estate market? This article will discuss how an EPLI can significantly increase the liquidity of 140 million of Americans’ most valuable asset while saving billion of dollars in wasted time and unnecessary labor.

 

We all know the drill.  

First, the homeowner decides to sell their property. After a bit of paint and a power wash, the property still has some deficiencies. But everyone wants a quick sale.  After all, a stale listing can lose appeal, and agents need to turn the property as quickly as possible –  not only for their commissions, but also for their reputation. In addition, the owners may need to transition between homes as quickly as possible without incurring double mortgage payments.  There is a lot on the line when timing a property sale.

With fingers crossed, the property goes on the market staged for a quick sale. The first offer comes quickly and is accepted – pending inspection. After a few days the inspector arrives and spots some rotten wood under a window or a few cracks in the foundation. This scares the first buyer away, and sometimes the home must be pulled off the market until repairs can be assessed and corrected.

When the second offer comes in, the  last inspection report belongs to the last buyer, not the owner – so a new inspection report is ordered. This time a different inspector finds a few more cracks and recommends that that a professional engineer is consulted. Any engineering deficiencies must now be acknowledged per real estate disclosure laws.

Days pass as everyone now scrambles to meet the new timeline, negotiate concessions, develop scope of work, get contractor ROMs, etc.  Few things are more expensive than trying to save money.

 

The Cost of eliminating “Seller Bias”.

The reason that the buyer must purchase the inspection report is to eliminate the possibility of seller bias. That means that there may be some nuanced physical deficiency that the seller is not aware of, or does not think is worth mentioning, or may try to intentionally hide in order to defraud the market into paying more than the property is actually worth.  Obviously, it is important to catch the bad guys, but what is the true cost of “seller bias” and is there some way we can assure the physical integrity of a real estate asset in a more efficient manner than buyer driven inspections?

 

How do people buy property at auctions?

Thousands of properties are sold every day at auctions. All the buyers have their financing set up, they have their insurance set up, titles have been searched, permits have been sealed. Everything is prepared beforehand so that everyone has the exact same information as everyone else about the transaction – the good, the bad, and the ugly – because when the gavel falls, the deal is done.

The most critical component of the property auction is an unbiased professional engineering inspection of critical systems. The engineer is concerned with the age, materials, and condition of the entire piping system, not so much wether a particular sink drains quickly as a home inspector would note.   The engineer evaluates the structural integrity, plumbing, mold and rot progression, electrical safety, occupant hazards and expected useful life of building components.  The engineering report may include system definitions, estimated maintenance costs, calculations of useful life, and feasibility of alternate use cases for the property.  The EPLI can also determine limitation of use including easements, critical slopes, roof and floor loading limits, etc. These are what the banks and insurance company care about the most, as should the owner.

The engineer can also credibly tout excellent maintenance, expensive upgrades, and additional safety features, and measurable amenities in a credible and unbiased opinion.  Many such communications are currently constrained by professional laws and ethics, except where validated by a Professional Engineer.

 

The Institution of Professional Engineers:

Only 5% of all engineering graduates in the US are able to attain the Professional Engineering designation. A Professional Engineer must pass board exams and pursue continuing education not unlike the bar exam for lawyers. Professional engineers also need to be nominated by other several other PEs would must validate 4-8 years of qualified working experience. After that, Professional engineers are regulated by the PE act where they are held accountable by law for their integrity, competence, and ethical behaviors. A PE can lose their license for committing negligence, incompetence, fraud, or breach of contract.

Due to the strength of the engineering profession, the rules of the auction can be made very clear. Everyone is in consensus that the Licensed Professional Engineering is worthy of public trust, competence, and unbiased assessment of fact. These attributes rank far beyond a simple home inspection.

 

Items that can be provided in an EPLI document may include:

  • Review of critical systems
  • Cost of ownership
  • Fire, flood, tree hazards
  • Validation of improvements
  • Energy calculation
  • Scope of Work
  • Feasibility studies: solar, additions, conversions
  • Impact of easements
  • Structural evaluation
  • Mold, wind, waterproofing, seismic review
  • Permit review
  • Land use regulations
  • Critical slope

These are by no means the only facts that an engineer can validate, but we can be assured that there is always an engineer who can adapt their expertise to any imaginable condition that may present itself in the Real Estate market.

 

How much will an EPLI it cost?

An EPLI will be more expensive than a home inspection report because engineers command higher compensation and carry greater liabilities than a home inspector.   The professional engineering report is also more useful and can be used in many different situations by legal definition.  It can be used as a basis for contractor selection, insurance coverage, or mortgage financing.

The truth is that many different engineering reports may be generated from the same information collected in a single visit by a qualified engineer. The only difference is in the write up, calculations, and validation by peer review.

 

How much will an EPLI save?

Instead, we should look at the cost of not conducting an EPLI. Nobody knows the true value of a home – today’s pricing is based on what the people down the road paid regardless of how well that home was maintained or improved. Mortgage holders and insurance companies absorb the valuation risk at significant cost to the homeowner. Increasingly, homeowners associations emerge to enforce community standards on private property to which each homeowner is levied at tax. Still, at the end of the day, there is little or no objective information included in the sale of a 3 trillion dollar per year US RE market.

 

The 2008 Financial Crisis;

In 2008, the real estate bubble popped. The result was that the theoretical paper value of all properties far exceeded the theoretical market value of all properties. This turned banking balance sheets upside down as they were forced to mark-to-market.

What few people realized that in the absence of true value for physical property – as assessed by a licensed engineer – there is are only theoretical values to work with in the enormous and complicated financial markets.   If only a small percentage of properties had a valid EPLI, this data could be extrapolated onto all properties to establish a nominal true value for real estate. Banks could then “mark-to-value” rather than mark to market. True value must be disclosed to everyone equally; only from there, we can be confident that market forces can do their magic.

 

Conclusion:

The current real estate delivery system is inefficient. Every regulation adds litigation, which increases time, complexity, risk, and cost to the transaction. The Institution of professional engineering is underutilized for the ability to eliminate bias, distrust, fraud, and other conditions that can diminish the value of a property.  The Institution of professional engineering is also greatly under utilized for validating information that could increase the utility, value, and re-sale of a property.

Taken together the Engineering Pre-Listing Inspection suite is a simple and inexpensive way to increase the speed, security, and efficiency of 140 million American’s most important transaction.

Crowdfunding Condominium Renovations

shutterstock_crowdfunding-1280x960(Summary; crowdfunding condominium renovations with emerging platforms can lead to substantial savings when proper engineering assurance is also performed.  Contact us for more information)

The 20/10 Rule

After the first 20 years, a condominium building may see a major system repair every 10 years for the life of the building.  After year 20, a building may start to see increased maintenance costs on major systems.   They start as small problems such as a roof leak, a broken water valve,  some wood rot under a window sill, a blown compressor, etc.  As the frequency and severity of the problems increase, the cost of repair and insurance claims exceeds the price of replacing the system.

The Funding Paradox

Once a system enters a mode of cascading failures, a major system renovation needs to happen immediately.  The cascading failures also happen in the financial side: an insurance claim triggers higher premiums, a water damage disclosure devalues real property, frequent shutdowns cause resident complaints, and the cost of constant repairs is progressively more significant.

The backlash from enforcing special assessments on residents can be severe.  People are willing to pay their fair share, but it is not fair to ask a current resident to subsidize past residents who enjoyed a trouble-free system.  Nor is it fair to ask them to subsidize future residents who will enjoy a trouble-free systems after renovation.  At this point, banks have you backed into a corner.  Bank loans must be collateralized by liens on the community cashflow, bank fees can cost between 0.5-1.5% of the cost of repair, and interest rates can average 5% (effectively doubling the price of the work over 15 years)

The cost of having the problem has a compound negative impact on the ability to fix the problem.

Crowdfunding

Humans have a remarkable ability to adapt to constraints on their environment. When money is constrained by economic factors, people are figuring out new ways to get the job done.  Today, new crowdfunding platforms are appearing for every known cause from funding start-up companies, to paying medical bills, education expenses, community coops, even public services.

Coengineers, PLLC is encouraged by what we have seen in the crowdfunding movement.  These are not banks, they are a platforms that allow a community to borrow money from themselves. Instead of a special assessment, the board “borrows” the assessed value from the residents and pays it back from the dues collected over time.

3 Benefits of Crowdfunding Condominium Renovations

1. Current residents no longer subsidize future or past residents – they can carry an interest bearing loan from the HOA.  A resident can move and still collect on the debt.

2. Loan terms are (to a large part) decided by the community, interest rate, initiation rate, assets secured, etc.

3. Money stays home instead of paying bank shareholders in a far off city – all fees, work, repairs, and repayments stay in the community.

A word of caution about crowdfunding for construction

One thing that banks and insurance companies perform very well is due diligence. Old institutions have long-term memory that enables them to know what types of investments work and what type do not.  These institutions are very familiar with construction loans and associated financial hazards.  Banks and insurance entities are vigilant in requiring a certain amount of preparation and professional documentation in place before underwriting a project. This data is matched to past data and risks are pooled and diversified.  Before a community attempts a crowd fund, they should make certain that they can effectively duplicate the technical and financial due diligence that a bank or insurance company would perform.

Further, the project MUST be insurable during and after completion in order for mortgages to remain viable.  It is essential that your insurance company accepts the conditions under which a renovation is performed.  They are already very comfortable accepting the opinions of your bank, but will they accept the vetting of the HOA Board?  Future mortgage lenders must be certain that the property was renovated to banking standards or they will not lend to future homeowners.  These are serious implication that the HOA board must be aware of.

Crowdfunding Assurance Engineering

Coengineers, PLLC specializes in representing the community’s best interest by performing the condition assessment, the reserves study, the feasibility study, the statement of work, contractor vetting, and ultimately, the maintenance plan for HOA properties attempting to crowd fund their projects.  Coengineers, PLLC has developed a set of processes that may accomplish these goals specifically in support of crowdfunding platforms.

Pillars of Engineering Assurance

The condition assessment tells the HOA exactly what the problem is and the scope of the required repair. The reserve study looks at all property systems and determines their estimating service life and scope of repair over a 30-year period.

The feasibility study will compare various options that an HOA may be considering for scope, cost, and payback.  The statement of work tells the contractor exactly what needs to be performed in contractual form.

Contractor vetting is required to make certain that the contractors’s capability and solution are consistent with the objectives of the community. It is also important to verify milestones of the project and adjudicate the release of funds to the trades for work completed.  Finally, the community needs to know the precise maintenance schedule which will ensure that the new system experiences the maximum service life.

Quality is everything

One other thing to keep in mind is that anyone can buy these notes underwritten by the HOA as long as the asset is of sufficiently high quality.  Coengineers helps to assures the quality of the asset thereby broadening the investor base. Outside investors such as area merchants, future residents, insurance companies, and even contractors may carry these notes at an interest rate that beats many long term investments.  When communities are self-supporting and the money stays home, everyone wins.

Solid value

Crowdfunding condominium renovations may be an excellent choice for some communities to bring their property up from a D grade to an A grade while saving significantly over a bank loan and without imposing a special assessment on the residents.  However, it is recommended that an engineering firm is contracted to provide project assurance that will reflect positively to future lenders, insurers, future residents, real estate values, and community resilience. Feel free to contact us at coengineers.com for more information on crowdfunding platforms and the Coengineers Crowdfunding Assurance Package of services.

5 Questions About Reserve Fund Studies

EngineerThe Reserve Study is one of the most important documents that a shared asset community can own. Coengineers, PLLC complies with the more stringent standard of the Canadian Reserve Study Act combined with the ASTM E2018-08 standard for building condition assessments where practical.   This standard of care provides the Board, The Management Company, and the community of owners with the highest level of legal and technical resilience in the industry.  Don’t sell your community short on  reserve fund analysis. No other purchase can pay for itself in multiples as a rock solid reserve study.

Adapted from www.mayflower.ca  

Who Is Allowed to Prepare the Reserve Fund Study (Canada)?

The Regulations to the Condominium Act 1998 (Canada) note who is permitted:

  • Members of the Appraisal Institute of Canada
  • Persons who hold a certificate of practice within the meaning of the Architects Act
  • Certified Engineering Technologists
  • Architectural Technologists
  • Holders of a CRP (RS – USA) designation
  • Persons who hold a certificate of authorization within the meaning of the Professional Engineers Act
  • Quantity Surveyors
  • Graduates Polytechnic University with a Bachelor of Technology new  (Architectural Science) Building Science or Architecture option.

Notwithstanding the above, there are regulations on who cannot prepare the Study which include members of the Board, the condominium’s property manager, certain relatives of Board members, an owner or a resident in the-condominium. In addition, the person/company being considered cannot have any direct or indirect interest in a contract or proposed contract with any Board member outside of his/her capacity as a Board member.

Aside from professional credentials, you want someone who has demonstrated experience with condominiums. Notwithstanding the Study being a budget document, it is also a technical report that involves the review of architectural and engineering drawings and the visual inspection of common elements. A trained eye can identify building problems for which repair costs can be included in the Study. In addition, much of the future Reserve Fund expenditures will be due to building envelope (roofing, windows, exterior cladding) and structural restoration (parking garages, balconies). These costs are often very site dependent for which “costing manuals” are of little use. Companies that have designed and administered these types of rehabilitation projects will be better suited to provide budgets for similar future work that the Corporation may be facing.

The regulations to the Condominium Act stipulate the minimum liability insurance requirements; $1,000,000.

What Information Does the HOA Need to Provide?

Once you have hired a consultant, he/she will require information about the condominium corporation. This will include the following:

  • As-built drawings and specifications.
  • The Declaration and Description.
  • Reciprocal cost sharing agreements.
  • Previous reserve fund studies.
  • The most recent audited financial statements.
  • What the current annual contribution to the Reserve Fund is.
  • Repairs or replacements to the common elements that have already been completed and when. Similarly, scheduled future work needs to be accounted for.
  • A summary of problems being encountered by the Corporation that should be reviewed. As an example, water penetration concerns.

What Is The Process?

The process is as follows:

  • The consultant is provided the above information. One of the most important are the drawings. They will be reviewed prior to visiting the site in order for the consultant to become familiar with the overall design and construction schemes.
  • Site inspection. In order to have an understanding on the current condition of the common elements, visual inspections are undertaken. Problem areas noted above can be reviewed. After the first study, the next study update can be completed without a site inspection. The next update must include a site inspection.
  • The report is then prepared (see next question). The drawings are used to “take-off” quantities such as roofing, exterior wall cladding, asphalt, hallway finishes etc that will assist in preparing the replacement/repair cost budgets. It is recommended that a draft report should be submitted in order for the Board and Property Manager to review it prior to it being finalized. The consultant should be available to attend a meeting to review the report.
  • Upon receiving direction from the Board of Directors, the Reserve Fund Study is finalized and submitted.

What Is The Report Format?

Each consultant will have a different format, but in general, the Reserve Fund Study will contain a Physical and Financial Analysis:

  • Background Information about the Corporation in general; where it is, its age, a general description of the property as a whole.
  • Inspection Report. Based upon the results of the site inspection, the report will provide an itemized overview description of the major common elements. This will include general condition, the need and timing for remedial work or replacement and any other information that the Board should be aware of.
  • Information Tables. There is typically a table that summarizes the common elements in terms of current age, life expectancy, remaining service life and current and future cost budgets.
  • Expenditure Tables. The data from the Information Tables is summarized to show in a tabular format when the itemized common element repair/replacements are estimated to take place. For each year, these expenditures are summed. The annual projections must be a minimum of 30 years commencing in the year the Study (and updates) is prepared.
  • Cash Flow Tables. Based upon the estimated expenditures, different contribution plans can be provided. Often, one plan includes the contribution level currently being used as a form of comparison to other scenarios.

What is the Funding Plan?

As part of the Financial Analysis, the study must in recommended funding plan projected over 30 years from the date of the study. The plan must show:

  • The estimated cost of major repairs and replacements based upon current costs.
  • The same costs adjusted to account for an assumed inflation rate. The inflation rate must be stated in the study.
  • The opening balance of the reserve fund.
  • The recommended amount of contributions to the reserve fund determined on a cash flow basis that are required to offset adequately the expected cost in the year of the expected major repair or replacement common elements and assets.
  • An estimate of the interest earned on the reserve fund contributions based upon an assumed interest The study shall state the assumed interest rate. The Condominium Act requires that interest generated by the Reserve Fund is reinvested into the Fund.
  • The percentage increase in annual contributions to the reserve fund for each year of the 30 year study.
  • The estimated closing balance of the reserve fund for each year.

When To Retain a Licensed Engineer

Ask an EngineerIt is commonplace for businesses and community associations to retain an accountant, or a lawyer, or a financial advisor; but how often does one think about retaining a Licensed Professional Engineer?

Engineering oversight on your technical projects often pays for itself in lower total cost, higher quality, financial security, and legal resilience. Engineers remove risk from designs, projects, and transactions. Engineering is an investment that is entirely reasonable compared to the cost of a failed project.  An engineering opinion can move mountains with contractors, insurance companies, banks, and lawyers.

When to retain a Licensed Engineer

1. When contractors can’t seem to solve the problem after repeated attempts.
2. If you or your client will require bank financing for the development, purchase or repair of your property or machinery.
3. If insurability of your property or machinery is imperative to the viability of your project.
4. If you hold fiduciary responsibility to an association for the expenditures of community funds on property, machinery, or maintenance.
5. If disclosure is regulated by law such as water damage, title history, reserve funds, or proof of performance for property or machinery.
6. When you need a second opinion supporting a large expenditure.
7. When you need a licensed professional to oversee construction.
8. When you are making a warranty claim or construction / product defect claim.
9. To perform independent forensic studies or pre-emptive failure analysis.
10. When due diligence is required in a litigious environment.
11. Performing a pre-listing inspection and/or Real Estate due diligence
12. when you need to challenge an on-line real estate value (such as Zillow or Redfin)

…and much more

Engaging an engineer may feel like a daunting task since many engineering firms are structured around big projects serving large corporations, developers, or government. And yes, we are a bit quirky, we speak a different language, and sometimes we may seem socially distant.  But there are many small engineering firms or independent engineers that can tackle a wide variety of problems quickly, efficiently and without huge overhead. Often, an engineer can clarify a problem with a single phone call.

Fortunately, it is easy to check the licensure status on an engineer to be assured that they have been signed-off by other engineers, that they have passed all of their engineering board exams, and have no violations on record. The engineering profession is tightly regulated by law with strict rules and durable code of ethics so that the public can be assured well beyond many non-licensed professions. Also keep in mind that nobody can offer engineering services to the public without holding a valid license.

Community Engineering Services, PLLC brings a wide variety of experience in major engineering disciplines to your project, when you need it at a price that makes sense. Community Engineering Services, PLLC is a collection of independent engineers, several hold MBAs, and collaborate with each other to bring forward the best solution to your important technical problems.  We hope to deliver engineering closer to the public in a new way in order to support the infrastructure of communities.

We are Coengineers

Preventable Problems With PEX

pex-pipingPEX is relatively new material (less than 20 years) that has gained widespread acceptance in the new construction piping and building renovation repiping for potable water systems.

The reasons are obvious – PEX has flex. The material is inexpensive AND the installation is fast and simple.  PEX is especially desirable on repipes since it can greatly reduce the size of the wall intrusions as plumbers can snake the material across smaller openings.

Unfortunately, there are some vulnerabilities that the owner needs to be aware of so that they can specify the right PEX components for their specific job.  Keep in mind that contractors are only liable for workmanship, manufacturers are liable for material defects, and the owner is liable for everything else. While we would always recommend obtaining a professional engineering opinion, this short article will help the owner understand what PEX is and how to manage the big vulnerabilities to using PEX: brass fittings, UV exposure, water quality, and even vermin!.

Cross linked Polyethylene – advantages

Cross Linked Polyethylene is a modification of polyethylene plastic commonly found in children’s playground equipment.  Cross linking means that the individual ‘mers’ in the ‘polymer’ are bunched up into knots instead of aligned in direction.  This allows the material to return to its original size and shape after being stretched.  This is great for holding on to fittings, bending around corners, and expanding under pressure, heat, or even freezing conditions.

PEX is very fast to install and can be threaded through walls without having to necessarily cut out large sections of wall board.  Connections can be visually inspected with great reliability and precise measurement is not a critical as materials such as copper or CPVC.  PEX has been widely used for several decades with broad acceptance in the market and universal familiarity in the plumbing trade.  Many different companies support the PEX products with accessories and connectors such as manifolds, hangers, and specialty adapters.

Preventable Problems With PEX

PEX is clearly not without its own problems, fortunately these may be avoidable. In the engineering profession, we understand that it is rare for one single problem to cause a failure, rather, it is the combination on two or more problems that lead to the major accidents. Many times accidents occur when one party does not communicate with another. With PEX, the owner, contractors, builders, maintenance personnel, etc, must be aware of the system configuration and have a plan for interacting with the system.  For this reason, engineering counsel is often warranted in a complex system.

Dezincification:

Brass is an alloy of copper and zinc.  When the zinc content is too high, it can corrode away under certain water conditions leaving a weak and porous copper shell, which can lead to failure conditions ranging from persistent leaks to a rare breach of a pressurized line.    At least one class action lawsuit was filed against the makers of a particular brass fitting that was failing in service causing substantial property damage.  The root cause was found to be the dezincification.

Most of these defective fittings were found in big box hardware stores and made cheaply overseas.  This suit was settled for 90 million dollars or so and the problem is now easily avoidable. Other problems have been found in areas with high mineral content such as Nevada and Hawaii. The owner should specify low zinc brass fittings or use ‘engineered plastic’ fitting components.

Dezincification in the Pacific Northwest

Coengineers recently conducted a more extensive analysis for a condominium association in the Pacific Northwest.  One interesting feature that we encountered was strong disagreement in the engineering community whether dezincification presents a problem in the Pacific Northwest or not.  In cases of suspected dezincification in the PNW, it may be prudent to perform a limited test. If there are currently no leaks, it is important to only disturb the minimum amount necessary to identify the composition of the zinc used in your system, then watch and maintain the system. A case study for conducting due diligence may be found here.

Chemical leaching

PEX was also suspected of leaching controversial chemicals such as MBTA, TBA, BPA, and other chemicals that are considered toxic. While we cannot testify to the truthfulness of this claim, the State of California has banned PEX in many building structures.  Given the segmented nature of permitting jurisdictions in the US, it would be wise to be aware of these concerns.

It is generally accepted that of the three types of PEX (called type A, B, or C), type B is the only formulation that does has not been suspected of any leaching considerations.  As such, a leaching concern is easily avoidable (given proper attention to other considerations such as strength and temperature ratings among the 3 varieties). Owners should be diligent to specify the type of PEX that is being installed.

Ultraviolet Radiation:

The stabilizers in PEX are highly vulnerable to breaking down under UV radiation – while some sources may claim that some UV exposure is acceptable, we advise that all precautions should be taken to shield this material from UV rays. Even fluorescent lamps and CFLs are to be avoided especially where ceiling route may interact with recessed fluorescent lighting. There are many shielding products available to solve this problem. However, PEX is best suited in total darkness. 

Agressive Water Chemistry:

PEX is also known to be slightly vulnerable to chlorinated water and possibly copper ions resulting from copper corrosion upstream.  The temperature rating of the water must be strictly adhered to. Alone, these factors may not be worrisome in many application, however when combined with the the other aggravating factors, the aggressiveness of the water may amplify hazard potential.  

Externalities:

Most builders will shield a PEX installation from a future owner or contractor, say, hammering a nail into the wall.  For this reason, the homeowner should be aware of the potential to cause a leak by intruding through the wall with a nail or saw. Some contractors will use a thermal measurement device to identify water piping before cutting into a wall for any other reason.  It is important for the owner to know where the pipes are before cutting into a wall.

We have seen several instances where mysterious leaks appear in PEX installation corresponding to the extermination of rodents.  The poison that is often used to kill small animals causes them to become very thirsty and seek water.  Rats appear to be especially clever and can discern the sound of water flowing through PEX pipes – then rapidly chew through the PEX to access water.  Make sure that ALL hired contractors – from electricians to exterminators – are licensed and experienced when interacting with a building that has a PEX system.

Conclusion:

It can be seen that failures will most likely occur from the combination of two or more seemingly unrelated problems.  It is rare that any single person or contractor is aware – on a scientific basis – of all these factors and the way that they can interact with each other.

Further, The owner or maintenance personnel cannot be expected to know all of these details – they just install what they buy at the supply shop.  It is important that the owner stay aware of these vulnerabilities of PEX and watch the installation closely.

A vigilant owner will hire an engineer to oversee the specifications and construction

Service Life of Building Components

1495721_0The standard reference for service life of building components such as HVAC systems, Plumbing, air handlers, Digital Controls, and elevators, etc. may come from many different reference books whose authors have deduced, observed, or tested a sample of similar components to produce a “mean” service life.  It is unlikely that any single author has lived long enough to test each sample in service, so some assumptions need to be made when arriving at these estimates.

The “mean” is a similar number to an “average” and represents the number of years at which half of the sample will have failed.  The assumption is that the failures occur on a perfect “bell curve”.  A bell curve is a way to describe a symmetrical pattern where the first sample to fail and the last to fail are equal distance from the “mean”.

However, the likelihood of all components failing at the exact same time is very slim.   On the other hand, the likelihood that you want to replace worn out components all at the same time is very high.  Herein lies the dilemma for the building maintenance staff.

To make matters worse, there are many other factors that will impact service life of a system and its components including improper maintenance, variable duty loads, high-cycling, abuse, neglect, proper adjustment, etc.

For example; a college dormitory may have higher loads in the cooler months than in the warmer months when school is out. Commercial buildings are subject to internal heat loads from computers and machinery. Residences are subject to internal moisture from showers, dishwasher, and condensation, etc.  Each condition has a different impact on the service life of the components.

Many facilities have highly capable maintenance staff. Only they can, and should, make a final determination when a component or system should be replaced.  The owner is always in a better position to compare maintenance costs with replacement costs in determining when a component should be replaced.

From an engineering point of view, a major remodel of any building is best conducted simultaneously among several systems when the building is unoccupied. Workers generate disruption, dust, downtime, and operational hazards – it is always best to do as much remodeling as possible at the same time.

A major remodel is generally due in 20 years increments.  20 years coincides with mean mechanical limits of things like seals and bearings and fan blades and valves.  The 20 year mark also coincides with technological advances for systems such as digital HVAC Control Systems, elevator switches and controls,  lighting system or lighting technologies, etc.

In addition, 20 years also coincides with the time after which many manufacturers will no longer support older equipment with OEM spare parts or service agreements.  Finally, after 20 years of service, depreciation schedules, insurance policies, and integration with new  components further diminish the practical service life of the component.

For these reasons many Property Condition Assessments will recommend further analysis to mitigate immediate building needs, a sturdy maintenance plan to rebuild or replace sub-components of major systems, and a well-planned major remodel at 20 years, 40, years, 60 years, etc.  We can debate service life of a HVAC compressor all day long, but the most practical way to own a building is with proactive maintenance and periodic major remodeling.

Blow-in Epoxy Pipe Liner

Summary: Epoxy is an amazing substance when applied correctly. But what if it is not?

Epoxy is a magnificent substance used in many important applications where strength, hardness, moisture protection and strong adhesion are a requirement. Epoxy coatings are used to protect industrial applications from factory floors to reinforcement bar embedded in concrete. When applied correctly to a strong surface, few coatings are as tough as epoxy.

Sample_set_epoxy_FailRecently, epoxy manufacturers have developed a lining process to coat the inside of an old potable water system with epoxy. The blow-in epoxy pipe liner method is touted as a fast, 60 year, non-invasive, and inexpensive alternative to re-piping a whole building. However, when applied incorrectly, epoxy coatings can create a dangerous sense of false security especially where hidden from view such as the internal surface of a pipe.

Many blow-in epoxy pipe liner failures are appearing in the field where litigation is often protected by gag orders thereby never reaching the public domain. This document identifies a wrinkle in the market that supports the rapid liner industry as well as the consequences of an unseen failure, should they occur.

This article arrives at the following conclusions:

  • The potential for epoxy liner failures may be high in galvanized steel potable water systems.
  • There is no reliable way to inspect the adhesion of epoxy inside a pipe.
  • If an adhesion failure is found, there is no practical way to repair it except re-pipe — so, why not just re-pipe?
  • Blow-in Epoxy pipe liner failures may typically occur at the precise location where the galvanized steel pipe is already at its weakest.

These observations are very important for the insurance underwriter who would otherwise classify a water system that has been repaired with epoxy liner as a “new” system. These observations are important for the forensic analyst that may determine the cause of a major water system failure on a condition other than being weakened by the epoxy coating. These observations are very important to the insurance broker who may inadvertently force a condominium community into an epoxy liner “solution” as a condition for maintaining coverage on their property.

Recommendation
Insurers should allow their condominium clients to perform a condition assessment without threat of cancellation. A small leak does not necessarily mean that the big rupture is imminent. In any case, epoxy does very little to eliminate the risk of a large rupture and possibly increases the likelihood. Then the insurance industry should work with the community to save enough money to perform a superior re-pipe with new materials such as polypropylene or copper. Together, a strong case can be made for the reserves or lending process. In the long run, a superior re-pipe may cost several times less than an epoxy “solution.”

The Vicious Circle
Something as simple as a pinhole leak can generate thousands of dollars of water damage claims. Imagine what a fracture in a main riser cascading down 10 floors of luxury condos can cost? Unfortunately, many insurance underwriters believe that after a few small water claims, the big one is imminent. This may not necessarily be the case. Yet, many a condo is put on notice that they will lose their coverage unless the whole system is immediately replaced.

Long before the first pinhole leak, insurance companies stipulate in their policies that they are not responsible for a pipe failure if the condominium board is aware of the problem and fails to take corrective action. This condition essentially removes the incentive for the condo board to perform a quantitative piping condition assessment — if they don’t know that there is a problem, they are insured. If they do know that there is a problem, they are not insured. This creates a compound moral hazard because they have no basis for saving reserve funds for a replacement.

After awhile, a few small leaks may appear leading to some minor insurance claims — this can trigger the threat of insurance cancellation for the condo. But this is the least of their worries; the condominium construction market is renowned for litigation, and many insurance companies make it very difficult or impossible for a contractor to be insured for condominium work. Condominium homeowners associations quickly learn that many contractors are simply unable or unwilling to work on condominiums.

If the homeowners association fails to save for a re-piping project, they are forced into an expensive bank loan from lenders who are equally wary of litigation … this can become a Orlando huge mess far beyond the knowledge and capability of a condo board to manage effectively. The inability to manage a project in a litigious environment leads invariably to more litigation!

Herein lies the wrinkle  in the market caused largely by the insurance industry betting against itself thereby creating a vicious circle that has very little to do with actual plumbing. In the midst of this condo / contractor / insurance / banking madness arises the epoxy liner salesman who is quick to provide everyone with exactly what they need — a cheap, fast fix.

The Epoxy Liner Process
The blow-in epoxy pipe liner process involves isolation of sections of the existing pipe, drying the pipes with hot air and then sandblasting the inside walls with pressurized air and an abrasive mineral that is supposed to remove all corrosion, leaving bare metal in order to prepare the pipe walls to accept adhesion of the epoxy liner. Once prepared, the paint-like epoxy is blown through the pipes in a liquid state using pressurized air. The epoxy is then “cured in place” either by the application of heat and/or the passage of time (pot life).

A Case Study
A reputable plumbing contractor in the Seattle Area provided samples of epoxy liner sections that were removed from at least three properties and which failed within 4-7 years of entering service.

Failure Modes
The following video demonstrates common epoxy liner failure modes correlated to available literature on epoxy liner vulnerability. The most common vulnerabilities of the blow-in epoxy pipe liner systems are associated with the planning and quality of the preparation as well as training of the applicator personnel.

 

Literature Review
Epoxy coating of steel is a widespread practice in construction and mainline water service2 3 4. While epoxy is tested safe to drinking quality standards by independent studies1 and national water quality standards6, any such “certification” is dependent upon actual adhesion to the surface of the pipe. The failure modes and vulnerabilities of epoxy are widely known and highly consistent in the progression7 of adhesion failure. It is also widely recognized that the project planning, surface preparation, and precise measurement and application of the ingredients to the substrate are the most significant variables in determining the probability of a successful epoxy coating assignment.

These factors are addressed in significant detail by the U.S. Army Corp of Engineers3, The American Water Works Association9, the American Society of Testing and Materials10, the Society of Protective Coatings, etc., who have all developed standards for the planning, preparation, measurement, and application of epoxy coatings. It can be assumed that if, and only if, these standards are followed and documented, then failures in epoxy coatings will not occur.

A comprehensive collection of tests and inspection criteria has been developed for epoxy coatings in any number of applications including internal water pipe coatings.3Such tests as the knife blade test or those tests specified in ASTM F2831 are simple, fast and conclusive.10

The Epoxy Paradox
Epoxy coating is extremely strong and adherent if, and only if, applied correctly.7 The question arises that if an application should fail a test, inspection, or in service, what is the contingency plan to remediate the flaw? How will the epoxy be removed and how will the re-coating be applied? If re-pipe is the answer, why wasn’t re-pipe considered in lieu of epoxy in the first place? If a single failure is found, what test sampling strategy must be applied to give a high likelihood that no other flaws exist in the system? Under what warranty claim would a failure be covered and to what extent will total coverage be warranted? These questions would be imminent in any litigation related to epoxy failures.5

Double Jeopardy: When an epoxy failure does happen, it is likely to occur at the location where the pipe is already at its weakest; i.e., pitted areas and threads. As such, a poorly applied epoxy liner could weaken a pipe considerably.6 The result could be a catastrophic high-volume pipe failure requiring a high insurance payout, which would not otherwise be attributed to epoxy coating.

Therefore, engineering and construction management representation and oversight can help assure that the epoxy liner material and contractors are aware of the expectation that industry standards will be applied. Independent testing should be applied as a condition of the contract bidding and warranty claims so that they may adjust their pricing to meet customer expectations. Again, epoxy is an amazing substance when applied correctly. But what if it is not?

References

1 Impact of an Epoxy Pipe Lining Material on Distribution System Water Quality by Ryan Price and supervised by Andrea M. Dietrich, PhD., Chair, Environmental Engineering, Virginia Polytechnic Institute.

2 Epoxy Adhesison Testing Sponsored by the Texas Department of Transportation.

3 PUBLIC WORKS TECHNICAL BULLETIN 420-49-35 15 June 2001 IN-SITU EPOXY COATING FOR METALLIC PIPE; Department of The Army; U.S. Army Corp or Engineers.

4 INVESTIGATION REPORT ON THE FAILURE OF MAKKAH-TAIF WATER TR.

5 Canadian law suit brought against the epoxy applicators.

6 Potable Water Pipe Condition Assessment For A High Rise Structure In The Pacific Northwest.

7 Layman’s Guide to Epoxy Paint / Coating Failures.

8 NSF/ANSI Standard 61 Drinking Water System Components.

9 AWWS C210-3; Liquid-Epoxy Coating Systems for the Interior and Exterior of Steel Water Pipelines.

10 ASTM F2831 – 12: Standard Practice for Internal Non Structural Epoxy Barrier Coating Material Used In Rehabilitation of Metallic Pressurized Piping Systems.

Disclaimer
Engineering opinions rendered by any author are solely for the purpose of education and are not engineering advice. If you use any opinion presented in this document or on the website in any way whatsoever, you agree to hold The Engineer and the website harmless of your use of those opinions.

Correcting HOA Maintenance Dysfunction

HOA Horror stories

Here’s How The Problems Start

The board of directors of a homeowner’s association is entrusted by the residents to hire a contractor to perform a complicated reconstruction project. Unfortunately, condominium board members are not very good at writing contracts or issuing requests for proposal or collecting bids. When a contractor is selected, the scope of work is often poorly established. The expectations between the community and the contractor begin to diverge. Soon, a law firm is engaged my some residents to sue the contractor for damages. After a long battle, a settlement is awarded, but it is not enough to fix the problem after expenses are paid.

A Chain Reaction

Fortunately, the contractor in the suit was insured, but this does not cover the personal, professional, and opportunity hardship of defending against the suit. The insurance company also increases the premium for coverage for condo projects. Most good contractors say, “it’s just not worth the trouble.” As the pool of available contractors dries up and the price for reconstruction increases, many condos are forced into deferring maintenance in a distorted market.

Cascading Failures

After a while, a condominium springs a few leaks in their piping system. Each leak results in a relatively small water damage claim. When the insurance company notices several claims in the same building, they begin to fear that a mainline is about to rupture next, and threaten the condominium with cancellation of their policy unless the community replaces the entire system immediately. Now the insurance industry is in a double jeopardy: they force the contractor out of the market and they force the condo out of the market to basically avoid suing themselves.

The Dysfunction Deepens

Banks will not make construction loans to condominiums that are not insured. Likewise, they will not make mortgage loans to buildings that are not insured. The property values plummet and the owners are sent under water. Soon they begin to default on the mortgages that the banks already hold. More maintenance is deferred as owners move out and renters move in. Buildings fall apart and become unsafe. Banks pull out of the market to avoid defaulting on themselves. The wider community suffers.

Correcting HOA Maintenance Dysfunction

Community Engineering Services, PLLC is currently deploying The Value Game to the condominium reconstruction market with remarkable success. The Value Game is a new class of business methods that alters the incentive structure of a distorted market so that everyone acting in their own best interest is in fact acting in the best interest of the community.

Here Is How The Value Game Is Formed

The first thing is to identify the “shared asset” in whose best interest it is for everyone to preserve. In this case, the shared asset is the physical condominium building where preservation is the context about which a community interacts.

If we look at each of the players individually, we see some consistent patterns.

  • It is obviously in the best interest of the residents to have a safe and well-maintained home.
  • It is in the best interest of the contractors to have a successful and profitable interaction with the building.
  • It is in the best interest for the Insurance industry to reduce the risks that they underwrite.
  • It is in the interest of the financial industry to loan money into a viable, organized, and disciplined community.
  • It is in the best interest of the real estate industry to represent strong values and complete insurability of assets.
  • Finally, the broader neighborhood benefits from the presence of a viable condominium community.

Project Management is Incentives Management

It is actually in everyone’s best interest that the others are successful. Once incentives can be re-aligned, the project can be managed in a manner that reinforces the community instead of tearing it apart.

Social Capital has value:

Taken together, project risk is vastly reduced and social capital is vastly increased with a simple realignment of incentives and the proper communication channels appropriately open to all. Community Engineering Services, PLLC can orchestrate a tight project by managing the schedule, the design, contracts, risk, and quality; and therefore the cost.

 

 

Addressing Water System Failures Before They Happen

water failure

In the heyday of the real estate bubble, developers flipped tens of thousands of apartment structures into condominiums – with little regard for the condition of the potable water system. Many of these galvanized steel or early copper systems are rapidly approaching the end of their service life.  Unseen, a small leak can cause thousands of dollars of damage and a ruptured main riser can amount to millions of dollars in claims and severe hardship for the community of homeowners.

Many Factors are involved

While it may be tempting to react to failure statistics, not all water systems are equal. Water chemistry varies substantially across the country, as do workmanship and materials quality – these variables may have a greater influence on mode and consequences of the failure than the age of the system itself.  The least appropriate action may be for the insurer to put the community in an emergency situation.  Poor or rushed Homeowners Associations (HOA) decisions can end up costing everyone far more than a properly replaced system that is well planned.

Insurers must first help the community to resolve to replace their potable water system.  Then, they must encourage the community to have a comprehensive piping condition assessment overseen by a qualified engineering representative. It is essential to determine the stability of the existing system without the threat of policy cancellation. Small leaks may be tolerable as long as the possibility of a large rupture is fairly remote – they are not necessarily related conditions.  Once these probabilities are known, then good decisions regarding a replacement system can be made.

Unfortunately, The HOA board is often left with a daunting task of selecting the right technology that both heals the pain and fits the budget. All pipe renewal solutions have different risks and vulnerabilities and many HOAs can fall for a slick contractor’s peddling inferior products. Potable water is a matter than requires rational analysis.

Piping Materials:

The three main classifications of piping renewal materials on the market include epoxy liner, copper re-pipe, or a variety of plastic products.  All have vulnerabilities and limitations so it is important for the insurer to take a deep hard look at the risks while the HOA can focus on the costs.

Epoxy Pipe Liner

Epoxy pipe liner is a continuous paint-like coating that is blown through an existing pipe system that has been cleaned by an abrasive sandblasting. Epoxy has the advantage of being relatively fast and minimally invasive. The problem with epoxy is there is no certain way to know the pipe is clean on the inside and no certain way to know if the cleaning process compromises the strength of the pipe.  Finally, if we were to test the epoxy, and adhesion is shown to be poor – then what?  There is no way to remove the epoxy and breaking the continuity of the coating breaks the protection. Our research has found that an epoxy failure can very likely happen at the exact place where the pipe is already at its weakest. This does little to mitigate the peril of the multi-million dollar rupture claim.  While we are confident that epoxy may be applied correctly, we are not confident the epoxy would be risk/cost competitive over a far superior re-pipe.

New Copper Re-pipe:

Copper is a very familiar to most people from its use in the penny.  The tarnish that forms on copper actually protects it from corrosion. Under the right conditions, a 50-year service life is a reasonable expectation if that tarnish coat is not disrupted. Copper plumbing has been extensively studied and many professional codes and standards apply to its use. Consequently, many copper failures can be traced directly back as failures to apply these standards; improper design, poor workmanship, aggressive water chemistry, or inferior materials, etc. All are known perils, which may be avoided or mitigated with the assistance of a good technical advisor representing the best interest of the owners.

Cross Linked Polyethylene (PEX)

PEX is a white or colored plastic that is fairly stiff but also quite flexible.  A slightly weaker form is commonly used in plastic milk jugs. PEX has been used in the US for 20-25 years, and has demonstrated an excellent track record in millions of installations.  PEX is easy to install, relatively low cost, and enjoys broad market acceptance.   PEX has two main problems – both of which are avoidable.  Lawsuits have been filed over failures due to ‘dezincification’ of low cost brass fittings.  It is extremely important to avoid some sources of fittings with high zinc composition in alloy.  Lawsuits have also been filed over the leaching of chemical compounds from types A and C PEX – the use of Type B PEX largely eliminates this problem.   Again, a good owner’s representative can help navigate this landscape. Many other plastic piping materials exist, but not without similar controversies.

New Polypropylene Pipe

A newcomer to the pipe materials selection is polypropylene – polypropylene is a common recyclable material with important uses in medical and food grade applications. Polypropylene is a very simple molecule of carbon and hydrogen – nothing bad goes in so nothing bad can leach out.  While new to the US, we have traced its use in Europe to at least 30 years back with a very low failure incident rate. Polypropylene has excellent thermal and acoustic properties and is widely considered the most environmentally friendly piping material available.  Some disadvantages include special fusing irons and specially trained installers are required.

Addressing Water System Failures Before They Happen

Water system renewal can be a confusing process – and certainly not a hands-off affair for the insurer.  A qualified owner’s representative to help navigate the landscape of technologies and contractors who sell them.  When the project is complete, the representative can help petition the underwriter, the financial industry, and the real estate market for adjustments that reflect the value of your renewed new system.   The technical representative can help eliminate engineering and construction risks without interfering with the normal dynamics of a wise and proactive homeowners association.