Navigating Disaster Preparedness in Property Management: Insights from Gary Porter, CEO of Facilities Advisors International
In an era of increasingly frequent and severe natural disasters, property managers are under growing pressure to ensure financial and operational resilience. Gary Porter, CEO of Facilities Advisors International, has spent decades advising property associations on managing these challenges, with a focus on proactive planning, legal considerations, insurance strategies, and the integration of technology. Here’s an in-depth look at Porter’s insights on how property associations can prepare for and navigate the complexities of disaster management effectively.
Rising Frequency of Catastrophes and Readiness
Natural disasters like hurricanes, earthquakes, and wildfires have surged in recent years, creating mounting challenges for property owners’ associations and managers to maintain disaster readiness and manage financial reserves. The tragic collapse of Champlain Towers, Surfside Florida in 2021 heightened awareness of the need for stringent building standards and robust financial planning to prepare for such crises.
Porter cited innovative developments such as Hunter’s Point in Cortez, Florida, which features hurricane-resistant construction that has effectively minimized damage. “It’s about planning from the start,” Porter emphasized. “Risk management isn’t a one-time task; it requires continual investment and adaptation.” However, many associations lack the financial resources to implement these resilient building practices, often relying on post-disaster insurance or special assessments to cover repair costs, a process complicated by rising costs and frequent catastrophic events.
Insurance Challenges in High-Risk Areas
With escalating risks, insurance companies are reassessing their exposure in disaster-prone areas. Many insurers have increased premiums, added coverage restrictions, or even withdrawn from high-risk markets entirely, creating significant financial burdens for property owners.
To secure fair insurance payouts, Porter advises property associations to consider working with public adjusters who represent policyholders during claims processes. “Public adjusters ensure insurance companies honor the full extent of coverage in a policy,” Porter explained. They work to prevent insurers from minimizing payouts and ensure repairs meet policy terms, avoiding quick fixes that may inadequately address damages.
Despite the benefits, public adjusters come at a cost, and rising deductibles make it difficult for associations to rely solely on insurance. This has led some boards to explore self-funding parts of their disaster recovery plans to reduce dependency on claims negotiations and be prepared for immediate recovery needs.
Financial Planning and Reserve Studies
A core aspect of Porter’s work involves conducting reserve studies, which determine the funds an association should set aside for future repairs. Increasingly, associations are creating disaster-specific funds within these reserves, especially in high-risk regions, to allow quick access to funds when emergencies arise, thereby minimizing immediate financial strain on property owners.
However, creating such funds can be constrained by state laws or an association’s own governing documents, which may limit the use of reserve funds. “In those cases, we recommend creating an emergency fund outside the official reserve study,” Porter said. By taking this separate approach, associations gain a financial cushion to cover immediate disaster costs without relying on emergency assessments or loans, which may have lasting financial repercussions.
Special Assessments and Legal Considerations
When a property sustains severe damage, associations often need immediate funds for repairs. Porter explained that it’s common for associations to rely on special assessments to cover these initial costs while awaiting insurance claims. However, he noted that this approach can be legally complex.
“For example, if a building suffers hurricane damage, the board may need legal counsel to determine if reserve funds can be legally reallocated toward reconstruction,” he said. In cases where legal restrictions prevent using reserve funds for disaster repairs, associations may have to pursue special assessments or bridge loans, which can add financial burdens on property owners.
Special assessments can also pose challenges in communities with frequent ownership turnover. For instance, if an assessment is levied to fund repairs and ownership changes before insurance funds are recovered, questions arise about who should receive any potential refunds. “Imagine an assessment is levied after a disaster, but ownership changes in the interim,” Porter explained. “If funds aren’t fully used, who receives the refunds?” This scenario underscores the importance of considering the long-term implications of funding decisions during disaster recovery, particularly in cases involving ownership changes and potential reimbursements.
Integrating Technology for Better Property Management
Technological advancements are revolutionizing property management, offering new tools for financial planning, operational efficiency, and property health. Porter explained that dynamic reserve study software, which allows property managers to adjust records in real-time, has become essential for associations looking to keep their budgets responsive to changes in property conditions.
Maintenance Tracking Software
In addition to reserve study tools, Porter’s team has developed maintenance tracking software to support associations required to maintain state-mandated maintenance plans. This software not only helps meet compliance requirements but also allows associations to document completed tasks, strengthening long-term property health and reducing risks.
“Some states now require associations to create a maintenance plan. Maintaining documentation of completed tasks is a difficult manual process, so we have developed maintenance tracking software to help associations build this record in real-time,” Porter noted. “It’s not just about meeting compliance; it’s about ensuring the property’s long-term health and lowering risks for owners and residents.” This detailed documentation also supports negotiations with insurers, potentially leading to lower premiums, and is a valuable asset in legal or regulatory evaluations.
New Blueprint and Mapping Technology
Legacy resorts, especially those converted from hotels or apartments, often lack updated blueprints, which can complicate planning and maintenance. Porter’s team now uses LIDAR and 3D scanning technology to generate precise, updated layouts of property interiors and exteriors, providing clear measurements that aid in budgeting, contractor communication, and disaster recovery planning. These detailed property records help associations secure accurate bids, effectively document property conditions, and support efficient planning and cost management.
Communicating and Reporting Financial Data
Clear communication of financial data is critical for boards and owners to make informed decisions about property management. Lengthy, complex technical reports can overwhelm board members, making it difficult for them to act on essential insights. Porter emphasized the need for simplified data presentations that show where funds are allocated and highlight priority areas.
His team provides visual summaries and concise financial snapshots that make complex data easy to understand, empowering boards to make timely, informed decisions. In one example, Porter’s team assisted a large resort with its first reserve study by creating a one-page summary of the property’s assets, offering the board a clear view of its financial standing for the first time. “That level of clarity is essential,” he explained. “It’s about distilling complex information into actionable insights, so boards can confidently navigate long-term planning.”
By simplifying complex information and ensuring data is easy to interpret, Porter’s team interprets data to create actionable information that helps associations effectively communicate financial health, making it easier for boards to allocate resources and prioritize property needs. This approach ensures that associations are equipped to make strategic decisions that support long-term resilience and property well-being, even in the face of growing environmental challenges.
Porter’s holistic approach to disaster preparedness illustrates how financial planning, legal compliance, and the adoption of advanced technology come together to support property associations in effectively managing disaster risk. Through well-structured reserves, dynamic technological tools, and clear communication, associations are better equipped to maintain resilience and stability. Proactive planning and informed decision-making are essential in navigating the challenges posed by today’s disaster-prone environment, enabling property associations to protect their assets and safeguard their communities.
About Facilities Advisors International
Facilities Advisors International is a leading provider of reserve study and facility management services. With extensive expertise in the hospitality industry, the company offers tailored solutions to ensure compliance with statutory requirements and long-term financial sustainability for resorts and property associations.