Many Los Angeles County residents have received mandatory soft-story retrofit ordinances in the mail, requiring them by law to update their buildings within a set amount of time.
While these mandates are needed to guarantee the structural stability of the building and the safety of all occupants in the event of seismic activity, that doesn’t make receiving an ordinance any less stressful for property owners. In addition, though soft-story retrofits are necessary long-term investments that will guarantee the health of your building, that doesn’t mean that makes footing the bill any less easy in the present. Today we are going to walk you through the soft story Cost Recovery Program so that you can discover the most cost-effective way to secure your building and keep residents comfortable throughout the process without sacrificing your savings. Ready to get started?
What are the mandatory retrofits?
Close to 20,000 buildings in Los Angeles County alone have received orders to comply for mandatory retrofits. Passed in 2015, this ordinance requires for determined at-risk buildings to structurally secure their dated structures, a project that can run upwards of $130,000 in some cases for wood framed structures and as much as several million dollars for large concrete buildings.
The carefully defined ordinance gives building owners a total of 7 years to complete their mandatory retrofits in full, providing them a limited amount of time to work out payment plans and figure out savings.
However, the Cost Recovery Program can reimburse the building owner up to 50% of the project costs upon the completion of construction.
Related: 4 Steps to Soft Story Retrofitting
What is the Cost Recovery Program?
If you are seeking a way to recover your seismic retrofitting costs, then you are not alone. On February 12, 2016, the Seismic Retrofit Work Cost Recovery Program became effective to provide a temporary rent surcharge to tenants based on two factors. These factors include: 1. A Los Angeles Housing and Community Investment Department (HCIDLA) approved pass-through of the total retrofitting costs of up to 50% divided equally among all rental units; 2. A rent increase for a recovery period of 120 months (which can be extended) at the maximum amount of $38 until the approved amount has been collected in full. That means that it is possible for property owners to recover up to 50% of the costs spent on the mandatory retrofitting.
Ready to sign up?
How can I apply for cost recovery?
To apply for the Seismic Retrofit Work Cost Recovery Program, it is necessary to submit an application online. You will also be required to mail any supporting documentation that has been uploaded to the Department so that it can be received within 30 days of your application being filed. Once you have submitted your application, a mailing label will be provided, or you can bring the documentation in to a public counter. In order to submit an application successfully, it must be submitted within 12 months of your retrofit being completed.
You will be required to submit a copy of your Tenant Habitability Plan (THP), documentation to support the costs of the project, a rent roll with tenant rent and move in dates, and final permits for all work that required permits.
How are cost recovery applications processed?
Each application will have a Case Analyst assigned to it in order to review the application and assist with the process. Tenants and landlords will be notified that the application has been filed, at which point HCIDLA will review the documentation and determine the amount of the pass-through. Once a final determination has been made, it will be mailed to the tenants and landlords along with an appeal form. Tenants and landlords will both have the right to appeal the decision.
What is the Tenant Habitability Plan?
The Tenant Habitability Program requires that a Tenant Habitability Plan (THP) is developed in order to protect the rights of the tenants and minimize the impact of major construction for their well-being. A THP is required by property owners to ensure that necessary steps are taken to ensure that tenants can safety remain in their lodgings during construction or that safe temporary relocation can be provided for them.
Filing a THP is a required step of seismic retrofit work. The THP requires a number of points of important information,
including a list of the tenants and their current rent payment, the anticipated impact of the work on the residents’ living areas, the anticipated impact of the construction on the personal property of the tenants, and extended information about the disruption anticipated during the construction. Overall, THPs require a very thorough breakdown of the amount of work anticipated and the overall impact it will have on residents and their lives.
What should I know about filing a THP?
A THP can be filed by building owners at any time before the seismic retrofit begins. While THPs might include extra costs upfront in order to minimize the impact of construction on tenants, if all paperwork is filed correctly, they can bring many long-term cost benefits since they will be a key asset in securing an approved Cost Recovery Program. Therefore, it is very important to file your THP correctly. If you team up with the right engineer, then you will be able to keep your tenants in their homes and avoid paying for relocation.
Successful engineering, therefore, plays an important role in deterring the overall cost and success of your retrofit. All soft-story building owners are advised to ask about the THP process when they are getting their project bids, in order to be able to complete it successfully. The number one thing you can do to ensure the comfort of your tenants and the eventual recovery of the project cost is to work with a skilled engineer who will be able to minimize the disruption of your tenants’ lives and complete the mandatory retrofitting project in a quick, clean, and efficient manner.
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Have you received a mandatory ordinance in the mail?
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