In early 2016, REAC’s Inspector Administration office released new “business rules” for REAC inspectors; a set of rules applying only to certified, active REAC inspectors. One of these rules was a prohibition on being present at any inspection that was not assigned to and being conducted by them. In other words, REAC prohibited its inspectors from accompanying any other REAC inspector, whether it be as an assistant or guest to the other inspector, or as a representative of the property. One intentional effect of this was to effectively prohibit any active REAC inspector from escorting or “shadowing” another inspector on behalf of the property during a REAC inspection.
This rule, perhaps intentionally, led to an industry-wide misconception that a property cannot be represented by an outside expert during an inspection. To be clear: there is no such prohibition. These business rules apply only to inspectors, not to property ownership or management entities. Neither REAC nor HUD has issued any prohibition on property owners or managers securing expert advice, before, during, or after an inspection. The sole impact of this rule is that it limits REAC inspectors who wish to continue working for REAC from escorting another inspector. It does not even prevent inspectors from providing Pre REAC or appeals services.
Acceptable performance on your REAC inspections is absolutely critical to the continuing success of your business. Owners and managers of properties that are subject to REAC inspections should always remain aware that they have certain rights that are not to be infringed upon. They have a right to seek out expert advice that will reduce costs and improve compliance. This actually supports HUD’s mission by improving the condition of properties while preserving limited economic resources. It would be entirely counter-productive for HUD to limit an owner’s ability to improve conditions and make economically sound decisions.
We hear anecdotal accounts from owners and managers who say that they have been led to believe that they are prohibited from utilizing certain kinds of professional services to maintain high levels of compliance with REAC standards. Some of them tell us that they have been given this erroneous advice by various HUD officials. We believe that it is entirely unacceptable that any agency would disseminate inaccurate information in this regard, that discourages the use of expert advice to more efficiently achieve greater compliance with HUD’s standards. You have the right to seek out expert advice.
Confusion caused by REAC policy statements is not a new phenomenon. Several years ago, an office within HUD released an unapproved trial balloon announcement stating that property funds could not be used to hire a compliance expert to advise you on preparing your property for a REAC inspection. In other words, it seemed to say that you could not pay a third party to conduct a Pre REAC inspection to assist you in establishing accurate priorities to determine what repairs, replacements, updates, and policy changes would best assure that you achieved superior compliance with REAC standards in an organized and cost-effective manner.
That release was never followed up by any official announcement that would have supported this unauthorized release. However, one HUD Field Office published this information in their newsletter, and upon being challenged, they published a retraction that said that properties are strongly encouraged to conduct Pre REAC inspections for this purpose, whether they are conducted by property staff or by a third-party contractor. The bottom line was that you are encouraged to improve your performance on the REAC inspection by taking proactive measures and that it was okay to utilize professional services outside of your own payroll to do this.
So, let us be clear:
- You have the right to hire expert inspectors to assist you in identifying compliance needs and to assist you in prioritizing and containing the cost of your efforts to eliminate unsafe conditions, to remedy issues that will degrade the value of your real estate asset, and that could result in unacceptable REAC scores.
- You have the right to be represented during an inspection by an expert party who can advise you on the most effective ways to remedy deficiencies cited during the inspection and how to appeal issues that qualify for an appeal.
- You have the right to utilize the expertise of a third party to assist in the preparation of appeals.
- You have the right to seek out training for your staff to improve your organization’s knowledge of REAC’s standards, how to improve compliance while reducing the cost of compliance efforts, and how to exercise your rights to appeal certain kinds of issues that affect your REAC score.
The Inspection Group provides all of these services, and you are within your rights to rely on the expert services that we can provide.