The Financial Impact and Physical Risks Posed by Underground Garage Waterproofing
HOA Detective™ | April 28, 2026: H.P. Horton, the Oracle of Engineering, used to say that a building needs a good hat and a good pair of shoes, which is another way of saying a good roof and a good foundation.
In February of 2026, an article was posted on LinkedIn discussing deferred maintenance in concrete parking structures. Described as A Comprehensive Guide for California HOAs – 2nd in a Series, the article is a somewhat in-depth examination of the problem of waterproofing the subterranean “concrete boxes,” otherwise known to the rest of the world as an underground parking garage.
The article focuses on the legal implications of California Civil Code Section 4775 and the mandatory maintenance requirements imposed on California HOAs with such parking structures. The premise of the article applies to every building and every HOA with a concrete garage. In essence, the article asserts that damage caused by failing waterproofing in older garages is real, the cost escalation is real, and the legal exposure is real.¹
Reserve Planning Failure: In theory, the HOA is supposed to conduct a reserve study as a preemptive measure to avoid unexpected financial burdens, but the effectiveness of the plan is only as good as the underlying reserve study. When the study doesn’t include the million-dollar garage waterproofing expense (fill in the number), the plan is a failure. By excluding underground garage waterproofing, most reserve studies hide one of a building’s highest potential costs. The result is a false sense of security: a budget that looks healthy today while concealing a massive unfunded debt for tomorrow. ²
The uncomfortable truth is that underground garage waterproofing is one of the most consequential and least understood liabilities of the condominium associations responsible for multi-story structures with a concrete garage beneath the building. The reserve study profession, as a whole, is ill-equipped to deal with the issue in most instances. Few reserve study providers have the technical expertise to evaluate an older concrete garage. Equally rare is the HOA board that is willing to spend the kind of money required to properly examine an aging facility. It is not ignored because it is unimportant. It is ignored because:
- It is difficult to quantify.
- Expensive to evaluate;
- Politically inconvenient – when the cost is more than a new roof, or the building needs new elevators.
This combination results in a lose/lose situation for the standard reserve study providers faced with the prospect of preparing a study for a building that contains a concrete garage. Even worse so when the building is 20-30 years old, or the garage is a multi-story structure extending several levels below ground.
The Biggest Losers: Ultimately, the owners of buildings with a concrete garage are the biggest losers. Concrete parking structures do not fail overnight. The concrete deterioration mechanism is well understood. Water penetrates through cracks, joints, and failed membranes. Chlorides reach embedded reinforcing steel. Rebar corrodes and expands, placing internal stress on the surrounding concrete. That pressure causes cracking and spalling, exposing more steel to more water, accelerating the cycle. What is far less understood – and far less honestly communicated – is how poorly this risk is handled in reserve planning.
Add salt (sodium chloride) to the mix in the form of salty marine air, or groundwater with high saline content, such that in coastal Florida, and you have a perfect storm that results in a ticking time bomb.
If you doubt this last statement, just ask Frank Morabito, the structural engineer who tried his best to warn his client and the building officials in Surfside, Florida, that the Champlain Tower South Condominium (CTSC) building had a major problem on its hands 30 months before the ill-fated building collapsed. ³ Or, ask the survivors of those who died in the unspeakable and ENTIRELY preventable tragedy.
Theory vs. Practice: In theory, a reserve study should identify all major components, assign useful lives, estimate replacement costs, and establish a funding plan that prevents sudden financial shock in the form of a large special assessment around the time the legacy systems start to fail.
In practice, underground waterproofing systems often fall into a gray zone. They are not easily visible. Their condition is difficult to assess without invasive testing. Their failure timeline is highly variable. And when they do fail, the scope of repair is rarely isolated – rather, it often triggers structural rehabilitation. Even worse is that the work is often deferred well beyond the point where relatively simple maintenance is all that is needed – out of sight, out of mind, as dear old grandmother used to say.
Instead, the ~$1M, twenty-year expense is often ignored until year forty or beyond, at which point you have a multi-million-dollar problem on your hands. Faced with that uncertainty, many reserve studies default to one of three strategies:
- Omission – leave it out of the study altogether.
- Under-scoping or understating the magnitude of the expense.
- Include vague placeholder allowances that do not reflect real-world repair costs.
The result is a document that appears complete, but is materially incomplete with respect to one of the most financially explosive areas of the property.
Know Your Limitations: In the 1970s Dirty Harry movies, the erstwhile character played by Clint Eastwood mumbles to himself over and again, “a man has got to know his limitations.” This piece of advice is one that many reserve study providers would do well to heed. The risk/reward equation doesn’t make sense. No reserve study fee justifies becoming entangled in litigation over a multi-million-dollar garage failure that was structurally inevitable, but analytically impossible to quantify with certainty.
One can only speculate, but I would be willing to bet that Frank Morabito feels the same way, after being named in more than two dozen law suits in the aftermath of the 2021 CTSC collapse.
Deferred Maintenance – Only Part of the Problem: The LinkedIn article frames the issue as deferred maintenance. That is only partially correct. Deferred maintenance is the observable outcome. The deeper cause is structural underfunding driven by incomplete or overly optimistic reserve modeling.
When a reserve study fails to meaningfully account for waterproofing systems, buried beneath the ground, the funding plan is flawed. Contributions to the reserve fund end up being too low because the funding assumptions are incorrect. Cash flow projections may appear to be stable. Funding metrics may appear acceptable to buyers and lenders, but if they are based on flawed assumptions, the end result is a reserve fund that doesn’t cover the true long-term cost of ownership.
If I had a dollar for every time I heard a Board say something like, “Our reserves are in good shape,” or “the Association’s reserves are ‘on track’,” I would have a lot more dollars than I do. Such naïve statements only confirm how little most people really understand about the long-term maintenance of large buildings, much less how to tell if a reserve study is a credible forecast.
Maintenance vs. Capital Project: The point at which this situation becomes a big problem for the governing council (Board) is when the building is old enough that the aging parking garage, buried several stories below the ground, is no longer a maintenance line-item in the annual operating budget; it is a major capital spending event.
The LinkedIn article’s per-unit comparison is effective because it captures this transition. A $50 per-unit inspection becomes a $10,000 per-unit special assessment. But even that framing understates the problem. The financial impact is not limited to repair costs. It cascades into an insurance problem if not addressed. If the worst-case scenario unfolds, the $10K per-unit special assessment turns out to be twice that amount – or more. Followed by the need for a new roof, elevator modernization, or a building enclosure rehab.
Does it ever stop? Answer: No, not after the building reaches the 20-year tipping point beyond which the cascade of recurring capital expenditures is seemingly endless. Insurance carriers respond to claims and known defects by increasing premiums or denying coverage altogether.
Lenders restrict financing in projects with active litigation or structural concerns, rendering units non-warrantable. ⁴ Property values decline as the buyer pool shrinks. Special assessments trigger delinquencies. Delinquencies weaken the Association’s financial position, further compounding risk.
This is not a linear progression. It is a system-wide feedback loop.
And it is entirely predictable.
The reserve study profession, as currently structured, is not well-equipped to handle low-frequency, high-severity risks like underground waterproofing failure. The data is limited. Inspection methods are far from perfect. The cost deviation is wide. Meanwhile, the industry’s core client base – HOA boards – are typically incentivized to minimize near-term expenses at the expense of long-term stability.
This combination produces a consistent outcome: risk is systematically underpriced. The consequences of underpricing long-term risks are not confined to financial hardship. In extreme cases, they can become matters of life safety, as we saw on June 24, 2021.
It should be noted that the CTSC failure was not entirely related to an underground parking structure. Nor was the failed structure the foundation of the building, as is often the case with many subterranean parking structures. In the case of the CTSC, the failed structure was only partly below-grade and was only a component of the foundation’s structural design.
The CTSC collapse in Surfside, Florida, involved years of documented water intrusion, failed waterproofing, and concrete deterioration that went unaddressed for a decade or more. While the final collapse mechanism was complex, the role of long-term structural degradation linked to water infiltration has been widely documented.
Let’s all hope no other HOA will ever experience a collapse event like the CTSC collapse. But hope is not the relevant threshold. The relevant threshold is whether the current system is capable of accurately identifying, pricing, and funding known risks before they become crises. At present, the reserve study profession is not capable of delivering the high-level analytics needed to monitor and eventually prevent catastrophic failures like the CTSC.
The Hard Questions: Will policymakers, industry groups, and standard-setting bodies confront this issue directly? Will reserve study standards evolve to require more rigorous treatment of underground structures? Are we going to require a warning label for older buildings?
Or will the industry respond with the usual procedural theater – BS, MS, PhD (Bull Sh*t, More of the Same, Piled Higher and Deeper)?
Notes | Sources
1. Jerold Bronstrup, “The True Cost of Deferred Maintenance on Concrete Parking Structures,” LinkedIn, February 24, 2026. https://www.linkedin.com/pulse/true-cost-deferred-maintenance-concrete-parking-jerold-bronstrup-xe01c
2. Rimkus Consulting Group, “Concrete Spalling: Causes, Detection, and Repair.”
3. Morabito Consultants, “Champlain Towers South Structural Field Survey Report,” October 2018. View Morabito Report
4. FirstService Residential, “California HOA Insurance Market Trends,” 2024–2025 reports:
Because You’re Buying More than a Home!
