The Economics of Building Codes and Reparability Issues

When a structure becomes significantly damaged, the analysis usually begins with the question, “Does it make sense to repair this or start from scratch?”

By David P. Amori

When a structure becomes significantly damaged, the analysis usually begins with the question, “Does it make sense to repair this or start from scratch?” From an engineering standpoint (spoiler alert), the answer is almost always “Yes, it can be repaired.”

But just because it can be repaired doesn’t necessarily mean that it makes sense to do so. More often than not, the decision becomes an economic question with many components that rest comfortably outside the traditional engineering realm. It involves questions revolving around subjects like salvage value, policy limits, construction cost, depreciation, service life, current construction environment, business interruption cost, and building code requirements. However, there are a few critical items that a forensic engineer can help with, including what needs to be done from a building code standpoint to put the property back to its pre-loss condition and, if in doing so, it will create an unsafe condition.

The International Building Code (IBC) and International Residential Code (IRC) are the prevailing building codes in the U.S. There are exceptions, but most building codes have a section that addresses existing buildings and the point at which damage or alteration to a structure requires code-related upgrades. In the IBC, that trigger is called “substantial damage.” This concept is invoked when damage to a building is greater than 50 percent of the market value of the structure. At that point, the building must be analyzed to determine if it can withstand current wind and seismic loads if repaired in kind and, if not, the appropriate modifications would need to be designed.

The code also states that if a structure is repaired to its pre-loss condition using the loads in place at the time the structure was originally designed, then no dangerous conditions can be created. It goes without saying that creating a dangerous condition needs to be avoided, but what if it is inherited? What if the building was not designed to accommodate the prescribed loads at the time of the original construction and now modifications are required to accommodate this condition?

This IRC is similar in that there is a substantial alteration trigger, but the ramifications are simpler. Once triggered, the requirement is to bring certain components (like stairway lighting) up to code. This is an important point, as it’s common for someone to produce a copy of the page of the IRC that discusses bringing the residence up to code, but they will hold a thumb over the part that describes the section of the code to which it refers. So, for instance, if 50 percent of the shingles blow off a roof, does that mean someone needs a new code-compliant roof deck? It might in some states that have their own building codes, but for the most part, probably not. Otherwise, the building can be repaired to its pre-loss condition provided no dangerous conditions are created.      

To illustrate how the code and the economics of the project play into the reparability question, here are a few over-simplified examples.

A young man coming home at 2:15 a.m. swerves to miss road debris and drives his car into someone’s kitchen. Presumably, this is a single-family dwelling and the local jurisdiction has adopted the latest version of the IRC with some addendums that do not factor into this example. If the damage is estimated to be less than 50 percent of the market value of the home, then the home can be repaired to its pre-loss condition provided no dangerous elements are uncovered. To complicate things, while removing drywall to replace broken studs, a contractor discovers that the header over the sliding glass door in the kitchen is undersized per the code that was in place at the time of construction. Even though this is a preexisting condition, it is a dangerous condition that has been uncovered during the work and would need to be remedied from a building code and engineering standpoint.

As another example, let’s say that there is a fire at a public storage unit falling under the jurisdiction of the IBC. The fire damages the internal steel supports and metal roof, but the engineer states that the slab and concrete tilt-up walls are suitable for reconstruction. The damage is estimated to exceed 50 percent of the market value of the damaged building, not the entire property.  In this scenario, the reuse of the foundation and concrete walls would need to be analyzed by a professional engineer to ensure that the structure has adequate capacity with respect to wind and seismic loads prescribed by the current code. This will add engineering costs, but it will be more than offset by the savings from not having to replace the walls and foundation, not to mention business interruption savings by cutting construction time down dramatically.

The question of reparability generally becomes one of economics and feasibility. Where the decided route is to repair a structure, certain portions of the building code are activated. These are relatable to the safety of the occupants from a structural standpoint and, even when substantial damage is triggered, the code allows for restoration to pre-loss condition provided that the structure is deemed safe. This decision-making process might require some additional costs, but the savings would more than compensate for it.

David P. Amori, PE, RRC, is vice president, engineering services, for EFI Global Inc. He has been a CLM Fellow since 2013 and can be reached at david_amori@efiglobal.com, www.efiglobal.com.

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