June 15, 2019 Kathi Markan

NIS Defects

In this June edition of our HUD-REAC newsletter, I’d like to discuss NIS (Not Industry Standard) defects.

  • In 2016, HUD enacted the NIS rule: “All repairs made to address UPCS deficiencies in preparation for a REAC inspection shall be made in a good and workmanlike manner with materials that are suitable for the purpose and free from defects.”

    “Good and workmanlike manner” is defined by HUD as:

    1. Ensuring that the component, as repaired, performs its intended function/purpose
    2. Finishing the repair in a manner reasonably compatible with design and quality of the original and adjoining decorative materials.
    3. Ensure proper maintenance of each inspectable item based on industry standards

    Put succinctly, fix deficiencies the right way and don’t hide them.

  • This rule effectively wiped out all objectivity in the inspection process. HUD has, for the last 3 years, held sessions with inspectors attempting to clearly define what they perceive a NIS defect is but there is still mass confusion.
  • Because of the continued confusion amongst inspectors, on May 28, 2019, HUD delivered to inspectors the first “NIS Final Decision” PowerPoint where a Quality Assurance committee reviewed many reported NIS findings and made a ‘final decision’ of whether it truly is a NIS defect.
  • Unfortunately, there is much in this PowerPoint which contradicts the NIS definition listed above but it does provide some ammunition in appealing NIS findings and perhaps some clarity to your maintenance staff on what is considered an Industry Standard repair or not.

Comments/explanations are added to each slide of the powerpoint to help with understanding. NIS Final Decision May 2019