February 15, 2020 Kathi Markan

HUD-REAC QA (Quality Assurance) Visits and Avoiding Rejected Inspections

In this February edition of our HUD-REAC newsletter, I am discussing the new QAI (Quality Assurance Inspections) protocol and how to avoid getting an inspection rejected.

Notice from HUD – Effective February 3, 2020:

Effective Feb. 3, 2020, REAC will be conducting Quality Assurance Inspections (QAI). A QAI is a re-inspection of a property by a federal inspector (HUD employee) that has recently been inspected by a contractor (certified HUD-REAC inspector). The QAI is generally within two business days of the contract inspection and is meant to assess the contractor’s performance using the same inspection protocol and same sample used by the contract inspector.

  • Inspectors were notified on 2/13/20 to inform property management they must notify residents for the inspection day PLUS an additional 5 BUSINESS days to accommodate the possibility of a QAI inspection.
    • Only the buildings and units selected on the initial inspection will be subject for reinspection during the QAI
  • Your initial inspection will be placed on hold pending the outcome of the QAI. HUD will then determine which inspection score should be released by way of a formula they have constructed. This means it could be a week or 2 after the inspections before you receive your score/report.

 

  • The primary goal of the QAI process is to improve inspector performance by way of identifying areas of additional training the inspector may need.

 

  • Over the years, there have been various acronyms associated with QA visits to your property. Many of you remember LQA’s (Limited Quality Assurance reviews). The LQA review could occur weeks or months after the HUD-REAC inspection was conducted!

 

  • The QAI process is similar to the old LQA process in that the HUD QA “walks in the inspector’s shoes” by way of inspecting the exact same buildings and units to ensure he/she is conducting the inspections to HUD-REAC Protocol….but with a much shorter time frame from the actual inspection! This is good news because the more time passes between the inspection and the HUD QA visit, the more conditions at the property can change.
    • For example, I once had an LQA conducted 3 and a half months after my inspection! The inspection was conducted in November and the LQA in late February….after the rainy season.  Thus, the property had erosion issues, leaky gutters, and clogged storm drains just to name a few that were not recorded on the November inspection.  The QA’s inspection in late February did not accurately reflect the true conditions of the property during the initial inspection!

 

  • If HUD indeed follows up in 2 business days, this will be a relatively good way for HUD to follow up on inspector conduct although foreseeably and understandably stressful for the property and management. Constructive Forensics can help by conducting a Pre-REAC inspection of your property to ensure you are 100% ready for your REAC inspection day!

 

Rejected Inspections

  • There are a few reasons inspections can be rejected but I will be discussing only one.
  • The number one cause of rejected inspections is so simple, it will blow your mind. If you have a big score jump, HUD will call you and ask one seemingly innocuous question, “Have you had any significant rehab or capital expenditure work since your last inspection?”
    • When management states “No,” HUD has reportedly ended the call quickly, rejected the inspection and a new inspection was scheduled!
    • If you say “Yes,” you’re in the clear and they may ask for the scope of work.
  • Our recommendation is to respond as to what you have accomplished at your property since your last inspection – what you have repaired, replaced, improved upon and offer invoices and work orders as proof!