4 Common Causes of Inadequate Drainage on Low-Slope Roofs

Photo 1. Roof decks with poor slope, drains that are up slope and deck defection can result in excessive ponding. Images: Hutchinson Design Group Ltd.

The stone church in rural Portugal was constructed some 700 years ago. The roofs of the transepts are large stone slabs: 5 feet wide, 10 feet to 12 feet long, and 8 inches thick. How they even made it into place is amazing, but to those like us who think in terms of water, what is even more amazing is the carved-out drainage channels. Moving water off the roof was important to builders 700 years ago in Europe, just as it was to the builders of Machu Picchu and Angkor Wat. Along with many indigenous building methods, the movement of water off roofs and away from buildings is becoming a lost design element.

It is not uncommon to walk upon recently installed roofs and see ponding at gutters, roof drains and across the roof. There are many reasons for this degradation of roof system design, including ignorance. A lack of knowledge by designers, a “roofer or builder will figure it out” mentality, and poor installation procedures can all be to blame.

Ponding water provides visual evidence to the owner that something isn’t quite right, and in some instances, it can result in roof structure collapse. If breaches in the roof membrane exist, standing water can result in excess moisture intrusion. (See Photo 1.) Additionally, water on the roof promotes algae growth that can attack some materials. It also allows for ice to form in winter, creating life safety issues as well as external forces affecting the roof cover.

So, what can you do?

In this article we’ll look at four key conditions on the roof that I see as the most erroneously conceived and installed:

  1. The roof system’s transition to the gutters
  2. Two-way structurally sloped roof decks with roof drains above the low point
  3. Four-way structurally sloped roof decks with drains above the low point
  4. Roof drains on level roof decks with tapered insulation

Accumulated Debris at Gutters

As perhaps you know and will see within this article, there are many things that irk me; one is walking on a new roof and seeing a 3- to 4-foot wide swath of black accumulated dirt and airborne components in front of the gutter. This situation

Photo 2. Owners do not like seeing ponding in front of their gutters, especially when it’s egregious. Proper design and installation would have prevented this problem. Images: Hutchinson Design Group Ltd.

results from restricted water drainage, and it is especially noticeable on reflective roof covers. (See Photo 2.) This restriction of water drainage can be due to several possible factors, including roof edge wood blocking that is too high, insulation that is too low, and the accumulation of roofing material above the slope plane. The roof deck itself can also be set too low.

When designing roof edge gutters, there are key design elements to consider:

  • Wood blocking:In addition to being of appropriate width and anchorage, wood blocking should be sloped to drain, even with sloped roof decks with an elevation 1/4 inch to 3/8 inch below the anticipated roof insulation height. The greatest error I see with most architects is that they do not draw the detail to scale. Insulation is not of the correct thickness, the wood is too big or too small, or it is depicted as one giant block floating atop the wall with no mention of anchorage.
  • Insulation:Please read the ASTM standard for polyisocyanurate and you will learn that the ISO has an allowable dimensional change. Thus, if you specified two layers of 2.25-inch ISO to match three layers of two-by wood blocking, you might be in for a surprise. You might get to the field and see that your two layers of insulation are 3/8 of an inch below the top of the wood, and the manufacturer whom you’ve complained to will pull out the ASTM standard and say, “We are within tolerances.”
  • Material layering:When the roof membrane is taken over the wood (yes you should do this) and sealed to the wall substrate, and the gutter is set in mastic and then stripped in, the accumulated material thickness can exceed 3/8 of an inch. Not much, you say, but on a roof with a 1/4-inch-per-linear-foot slope, that can result in 18 inches of ponding right in front of the gutter. Ouch.

Design recommendations for achieving complete drainage at the roof edge with gutter include:

  • Communicate with the structural engineer.Coordinate with the structural engineer to determine the elevation of the wall (less wood blocking) with the structure and roof deck. If perimeter steel angles attached to the wall rise above the roof deck, discuss with the structural engineer turning the angle downward or changing the angle to one with a vertical leg that doesn’t rise above the roof deck. Angles that rise above the roof deck create a void when

    Photo 3. Even when using tapered insulation and on four-way sloped roof decks, it is advantageous to accentuate the slope into the drain. Here a 1/2-inch-per-foot tapered insulation sump matches up to the tapered insulation with the help if a 1/2-inch tapered edge strip. Images: Hutchinson Design Group Ltd.

    the first layer of insulation is set that is most often not sealed, resulting in a thermal short and a place where dew points can be reached and condensation can occur. If reinforcing paper facers are on the insulation, mold growth can result.

  • Properly detail the wood blocking. I prefer and recommend the use of two layers of wood blocking. First off, do not use treated wood; use untreated Douglas fir. The wood should be at a minimum 8 inches wide (preferably wider) so that the gutter flange can have nail locations back far enough to allow for 3-inch minimum overlap on the stripping-in ply.

Often it is best if the top of the wall is sealed prior to the installation of the wood to prevent air/moisture transport to the wood, and on precast, to prevent the migration of “damp” into the wood. The first layer of wood should be anchored to the structure (wall or framing). While not always required, I prefer to set anchors at 2 feet on center, staggered. This spacing prevents the warping of the wood. The second layer of wood should match the first in width. I suggest that this second layer of blocking be sloped, and placing a continuous shim along the roof side on the first layer will provide the proper slope. The shim width and thickness are dependent on the wood size, but for two-by-ten wood blocking, a shim of 1/2 inch by 1.5 inches will work well. The second layer of wood blocking should be set with joints offset from the lower layer and then screw fastened at 12 inches on center, staggered. Joints on both layers should be scarfed at 45degrees and screwed tight. On your detail, the height of the wood blocking at the interior side above the roof deck should be dimensioned. This will allow contractors to identify height concerns well before the installation of the insulation so adjustments can be made if necessary. I suggest that this distance be 1/4 inch to 3/8 inch below the top surface of the roof insulation or cover board atop the insulation. (See Figure 1.)

  • Make sure the insulation is higher than the wood blocking.We will not discuss insulation types, substrate boards (vapor barriers) and cover boards in this article; please see earlier articles on the topic. In designing the roof edge and discussing/coordinating with the structural engineer, the goal is to have the insulation system: substrate board, vapor retarder, cover board. The thickness should be 3/8 of an inch greater than the interior top corner of the wood blocking. One key item to remember is that spray-and-bead polyurethane adhesive adds 3/8 of an inch thickness per layer. Designing the insulation to be higher than the wood blocking is important, as it compensates for that allowable dimensional change mentioned above, as well as the thickness created by the layers of gutter flange and roofing. The goal is to create a condition in which water will flow over and into the gutter.

Two-Way Structurally Sloped Roof Decks

Often long, narrow roof areas are designed with a two-way structurally sloped roof deck designed to move water from the outer roof edge to a central point. Prudent designers would like the roof drains to be located at the low point of the structurally sloped roof deck. Typically, though, there is a steel beam at the low point, which prevents the installation of the roof drain at the low point. Consequently, the roof drains must be located on the plumbing drawings up slope from the low point. I have tried for years to explain to plumbing engineers that water doesn’t typically flow uphill, but to no avail, so we as the roof system designer have to fix it. How? By moving the low point.

How is this design goal accomplished?

Let’s start with our roof system design for the following example: a new construction project in Chicago (R-30 minimum) with a steel roof deck, two-way structural slope and the low point over a steel beam. The plans call for the drains to be installed 2 feet up slope, and thus they will be more than 1/2 inch above the low point.

The goal will be to move the structural low point to the drain line. With a structural slope, to meet the thermal value we are looking at two layers of 2.6-inch insulation. Run the first layer of 2.6-inch insulation throughout the roof. Then the fun begins: Draw a line down the center of the roof drains. From this centerline, come out 4 feet on each side with a 1/2-inch-per-foot tapered edge board (Q panel, for those who know). The next layer of 2.6-inch insulation abuts the taper. The tapered insulation at the drain line effectively moves the low point to the drains. (See Figure 2.)

Now that the water is being moved to a new low point, it then needs to be moved to the drains. This is accomplished by saddles. (See Figure 3.) Sounds simple enough, but 95 percent of the saddles I see are incorrect, and water ponds on them, over them and along them. This situation leaves, once again, a bad taste in the mouth of the owner, general contractor, construction manager, and architect — even though it’s the designer’s problem. So, I will now, for the first time, reveal my secret developed years ago: The taper of the saddles mustbe twicethe roof deck slope. If the deck slopes 1/4 inch per foot, the saddles must slope at 1/2 inch per foot. If the deck slopes at 3/8 inch per foot, as it often does, the saddle needs to be at 3/4 inch per foot. And, architects and designers, the slope of the saddle is to the valley line, not the drain. The width of the saddle is the key and determining the width of the saddle is my secret.

It’s a simple formula:

(Distance Between Drain)x 33% = X

2

Increase X to the next number divisible by 4

Example: If the drains are 60 feet apart, divide 60 by 2 to get 30 feet; multiply 30 feet by 33% = 9.9 feet. Increase 9.9 to the next number divisible by 4 to get the answer: 12 feet.

Thus, the saddles at the mid-point apex should extend out three full tapered insulation boards. It’s best if you dimension this width on the detail.

On large buildings, the saddle width and thickness can be quite high, so be sure to double-check the insulation height with the height of the roof edge. I could tell you about a roof where the insulation rose several inches above the perimeter height because someone didn’t draw the detail to scale, but that is a story for another time.

Roof Drains in Four-Way Slope Roof Decks

Structurally sloped roof decks can be beneficial in that they can create positive drainage flow. But with four-way structurally sloped roof decks, the drain is not necessarily at the low point of the roof. How far off the low point is dependent on the plumbing contractor. I have seen drains installed several feet upslope. The plumbing drawings should have a note to the fact that the roof drain sump pan should be installed as close to the low point as possible.

Even when the drain is installed very close to the low point, it is still high and will result in water ponding in front of the drain. Thus, the low point needs to be artificially moved to the drain.

This is accomplished with a drain sump. Best practices suggest that the roof insulation be installed in two layers. This will allow for the installation of the sump.

Using Chicago as an example, which calls for R-30 or 5.2-inches of insulation, the first layer of insulation 2.6 inches thick is installed across the roof deck, to the roof drain. It should be cut to the roof drain extension ring. Fill the void between the roof drain and the insulation with spray foam; trim to the insulation. Next the tapered insulation sump is installed. To match the next layer of insulation, we use 1/2-inch-per-foot tapered insulation. It starts at 1/2 inch and, with a 4-foot panel, rises to a thickness of 2.5 inches. Placed around the drain, the sump created is 8 feet by 8 feet. The next layer of insulation is 2.5 inches and abuts the backside of the tapered insulation.

The 1/2-inch-per-foot slope is used as it doubles the slope of the structurally sloped roof deck, which in this case has a slope of 1/4 inch per foot.

Level Roof Decks With Tapered Insulation

Whether re-roofing or new construction, getting the drainage correct on level roof decks is still a challenge for most designers. Perhaps they don’t realize decks are not level; they have camber, they deflect, they undulate, and the drains are often near columns so the drain pipe can run along it. When the drain is near a column where no deflection takes place, it can often be high.

I like to first ensure the proper drain assembly has been selected and designed by the plumbing engineer: the roof drain, reversible collar, threaded extension ring, clamping ring, cast iron dome. (For more detail, see “Roof Drain Installation Tips” on page XX of this issue.) The sump pan should be selected and designed by the plumbing engineer and provided by the roof drain manufacturer — not by the metal deck supplier. (That the industry cannot get this correct is one on my pet peeves.) Do not raise drains off the deck with threaded rods. (See my article “Concise Details and Coordination Between Trades Will Lead to a Quality Long-Term Solution for Roof Drains,” RoofingMay/June 2016). If designing in a vapor retarder, it needs to extend to the roof drain flange and be clamped by the reversible collar. The first layer of insulation should be cut to fit and extend under and to the extension ring. Any voids should be sealed with spray foam.

To compensate for all the potential deck irregularities, I like to accentuate the slope into the roof drain by increasing the taper. More often than not, this means designing a 1/2-inch-per-foot slope sump into the drain. With a 4-foot board, this results in an 8-foot-by-8-foot sump. (See Figure 4 and Photo 3.) After detailing this sump, the main roof four-way tapered insulation can be designed and the heights at the perimeter calculated and noted on the plans. Just a reminder that the code-required thermal value needs to be attained four feet from the drain. So, for Chicago we detail to achieve R-30 at the backside of the tapered sump.

Final Thoughts

A new roof installation that results in ponding water at the drainage point is an unfortunate occurrence. Owners can be upset: “What is that?” “I didn’t pay to have water retained at the drains!” “Who is coming up and cleaning all this stuff off my roof?” Ponding water can be a standard of care issue for designers and result in damages. Learning to properly design rooftop drainage is not difficult, but it requires some thinking and some rooftop experience. Getting up on the roof during installations will help you visualize the needs to achieve proper drainage.

Making sure the roof system drains properly requires discussions with the structural engineers for new construction. I also find it helpful to have the plumbing contractor at pre-con meetings to review the interrelationship of the roofing and drains.

Getting water off the roof as quickly as possible has been a key priority for centuries — no matter the roof cover material. If the builders using stone can achieve complete and full drainage, then I challenge you to achieve it with the materials we use today.

Codes and Standards: Dealing With Decision Makers

During the past ten years, in my role as Associate Executive Director of the EPDM Roofing Association (ERA), much of my professional focus has been on monitoring the development of building codes and standards that could impact the products of our members, and the people who use those products. This past decade has been marked by intense debate, focusing on issues such as how the design of buildings can save energy, protect the health of the people who work there, and resist the ravages of increasingly frequent intense and even cataclysmic weather events. It has been an important time for the roofing industry to be engaged.

Given the complexity of the multiple codes and standards that impact roofing, it’s important to know the difference between codes and standards. To clarify, building codes are a set of rules that are frequently adopted into law, and are designed to specify the minimum requirements to safeguard the health, safety and welfare of building occupants. Building standards are set by national organizations such as ASHRAE and determine the performance requirements of the materials used in building construction. While standards are frequently incorporated into codes, that is not always the case.

Each year, ERA has increased its commitment of time and resources to stay abreast of proposed changes in codes and standards. As part of this commitment, I have sat through, and participated in, countless hours of codes and standards meetings and hearings, as well as related meetings with individuals and groups who share ERA’s goals. When I started out, I felt that it was important for members of the roofing industry to stay involved in the code and standard-setting processes. A decade later, I am convinced that participation by the roofing industry is essential if codes and standards are to support the best possible service and products that we can give our customers.

A few insights, based on my experience:

1. Science speaks.

ERA members, because of their close relationship with contractors and consultants, want to make sure that the choice of building materials is left in the hands of the design professional, the consultant, the architect, the engineer, the contractor and, of course, ultimately the building owner or facility manager. When we have codes and standards that do not reflect science-based evidence and/or the best practices within the roofing industry, then those stakeholders may not be able to choose the best product for the job at hand. In some cases, proposed modifications to existing codes or standards are suggested by people from the industry. In those instances, our role is to provide research and evidence to support the proposed change. Either way, science-based testimony usually carries the day. Not always, but without good scientific evidence to support a specific position, the chances of winning are nil to none. It takes time and clear thought to influence the codes and standards process, but without a base of indisputable scientific evidence, it’s hard to get out of the starting gate.

2. Collaboration is essential.

We have always welcomed forging partnerships with like-minded roofing professionals. But there have also been times when we have acted as consulting partners with regulatory agencies. A recent example: when regulatory agencies across the Northeast and Mid-Atlantic states were charged with improving air quality, they chose to reduce the amount of allowable volatile organic compounds, or VOCs, in adhesive sealants. This was a very good idea, and the industry was certainly supportive of the intent, but the way in which many of those states intended to enact those VOC regulations would have crippled the roofing industry. Essentially, the agencies were taking a regulation that was written for the state of California and applying it universally across the New England and Mid-Atlantic States.

So, ERA conducted studies, showing how the climate of those Northeastern and Mid-Atlantic states was dissimilar from the climate of California. We also provided technical information on how product would react differently in those different climates, and then we asked for a delayed implementation period to allow the research and development divisions in our companies to develop new products. These new products are appropriate for use in the climates in question and still allow the regulatory agencies to achieve their goals, successfully reducing the amount of the VOCs. Our participation was essential to help the regulatory agencies draw up a realistic timeline that would take into account the needs of the roofing industry.

3. Monitor the decision makers.

It’s important to monitor the discussion surrounding any proposed changes in codes and standards. It’s equally as important to monitor who will be making the final decisions on these issues. Since there are various facets of the roofing industry, code-setting bodies would be wise to ask the local roofing experts for advice on whom to include in their decision-making process. I’ve seen instances where committees have incorporated someone who may technically be from the roofing industry, but that person’s breadth and depth of knowledge is not appropriate for the topic at hand.

I would say we have seen mismatch of decision makers when urban heat island and cool roof issues are being debated. An individual may know a fair amount about climate change, but that doesn’t mean the person necessarily understands the nuances of cool roofing. Additionally, they may not be aware of the breadth of research on that topic and instead rely on dated information from college or grad school without being appropriately briefed on new and emerging research.

4. Prepare for a variety of responses.

We have worked with some regulatory agencies during a collaborative process and they’ve been very grateful for our input. There have been other situations where it seems that the policymakers just want us to rubber stamp their very well-intentioned but ill-conceived draft codes. That’s not something that we are willing to give. These initiatives, these outreach campaigns, take a tremendous amount of time and effort and financial resources, and difficult as it may be, our members feel that they owe it to the industry and their customers to make sure that anything that we’re involved in is done the right way and rooted in science-based evidence. There are no shortcuts in these sometimes very difficult fights.

5. Everyone can contribute.

Every member of the roofing community can be active and engaged and make a contribution to ensuring that codes and standards reflect the true needs of the construction industry and our customers. It’s very valuable to build relationships with state legislators and attend town hall meetings. It is crucial to identify candidates that are pro-business and pro roofing, and support them financially as well as from an educational perspective by sharing information with them about the roofing industry.

This is also critically important: When you are asked to write a letter to a key decision maker, be sure to do it. Recently, as part of a campaign to preserve choice of building products for roofers, I visited a city councilmember’s office. On the wall was an enormous white board where every single constituent member’s concern was tracked, along with a reference to the response. This particular city council member had an 87 percent “close rate,” meaning that 87 percent of the concerns that they had received in a given period had been responded to. My experience has been that municipal and state legislators take constituent outreach very, very seriously. Every letter, every e-mail makes a difference.

6. Gather intelligence for your professional organization.

If there is one takeaway that I want people to get from this article, it is to keep us informed. It is darned near impossible to track everything that happens on a city, county, state and national basis because there is no software that currently tracks these issues before they are formally proposed and published for review. And that is often too late to educate the policy makers. It is critical for the readers of this article to attend their local trade association meetings and become acquainted with the policy makers and the legislators in their area. Equally as important, everyone can become a resource for legislators and policymakers when they have a question about roofing.

I’m looking forward to the next decade of victories for the roofing industry, allowing us to deliver superior roofing systems to a broad range of customers. But this will happen only if key decisions about the roof are made by roofing experts, and not mandated by politicians who are far removed from the design process.

Regular Roof Inspections Help ‘Keep the Door Open’

A roof inspector makes field observations. Photo: Kemper System America Inc.

Regular roof inspections give consultants and contractors a chance to maintain relationships with building owners and managers and create value beyond any immediate repairs.

Commercial roofs should be inspected at least twice a year, typically in the spring and fall. Roof inspections are also advised after major weather events, though contractors may already be deluged with repair requests. Of course, building managers will be more receptive to discussing regular inspections during such times, even though time is short. A service flyer and readily available letter-of-agreement can help quickly close the deal, and be used after any major job throughout the year to create recurring business. Customers should clearly understand the service offer and any special provisions for emergency repairs or exceptions such as during wider emergencies.

Common Sources of Roof Leaks

  • Cracks in or around flashings and penetrations
  • Breaks in and around gutterways and drains
  • Poor drainage or debris-clogged drainage systems
  • Storm damage, tree branches, ice dams, etc.
  • Incidental damage by other trades during construction or maintenance
  • Excessive foot traffic at rooftop access points and around HVAC units and other rooftop infrastructure
  • Old or deteriorating roofing materials

While roof leaks can be caused in several ways, many common sources of leaks can be prevented with liquid-applied coating and membrane systems that fully adhere to substrates and are both self-terminating and self-flashing. Membrane systems are fully reinforced and create a seamless surface. High-quality systems are designed to withstand ponding water, ice, snow, UV light, as well as most chemicals. Unreinforced roof coatings can be used for repairs or complete restoration of the roof surface.

If only a small area is damaged, a limited repair is best, and usually possible with compatible materials over an existing system in good condition.Check if a warranty is in place, and if possible contact the manufacturer before the repair. Perform any repairs within the guidelines of the warranty.

For wider areas, a roof recovery is often possible right over the existing roofing. If interior leaks from a field area are evident, core samples can verify the condition of the existing roof assembly down to the deck. Built-up roofs (BUR), in particular, are susceptible to sun and temperature cycling. Tiny spider cracks and micropores can develop in the surface, and the layers below can absorb moisture and deteriorate. Water always travels to its lowest point and, if left unchecked, will damage the underlying structure.

On low-slope roofs, areas of ponding water are a prime target for inspections. If the roof is covered by aggregate or overburden, it must be cleared from around the lowest point of any low-lying areas, and other areas of suspected damage. A visual inspection can locate the source of an active leak, but there may be more than one source or a larger issue that may not always be visible. Broader sampling is needed to evaluate the general condition of the roof and the scope of any deterioration.

Quality workmanship and materials help avoid callbacks and ensure long-term relationships. After completing any necessary repairs, a PMMA, polyurethane or elastomeric membrane or coatings system can be installed to extend the service life of an existing roof. Elastomeric-based coatings are generally the best value for straightforward repairs and can be ideal for recovering metal roofs. Roof restoration, in general, can enhance building performance with “Cool Roof” products, especially those with a high solar reflectance index (SRI).

At the end of the day, an ounce of prevention and a prompt response to issues can help building owners avoid expensive headaches. People remember expert advice and quality service, especially in times of need. They also may tell others — which is another way regular inspections can help keep the door open to recurring business.

Lien Pre-Notice Requirements Can Have a Drastic Impact on Lien Claims

For contractors or subcontractors seeking past-due payment, mechanics’ liens are often a necessary part of the collection process. The ability to encumber title to a property — and potentially foreclose on the land to satisfy debt — is a uniquely powerful tool claimants can utilize to collect final payment or favorably settle an account, allowing contractors to close out their project files and move on. Each state’s requirements differ, and precision and accuracy are typically imperative to success. For example, missing the state statutory deadline or inaccurately describing the subject property will usually invalidate the lien. Satisfying all of the requirements is very important, as the mechanics’ lien is often the only way to give real teeth to a contractor’s claim for past-due payment.

Accordingly, most subcontractors and suppliers frown upon anything that would make it more burdensome to successfully make a lien claim. For this reason, the emerging trend of “pre-notice” or “pre-lien” requirements — and their potential deterrent effect on lien claims — deserves attention. Twenty-five states require lien claimants to provide the project owner (or the owner’s agent) with a “pre-notice,” which is a written notice in which the claimant identifies itself, the party with whom it contracted, and what labor or materials it will be furnishing on the project. (States requiring a pre-notice in at least some circumstances include Arizona, Arkansas, California, Florida, Georgia, Indiana, Maine, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Carolina, Ohio, Oregon, Tennessee, Utah, Virginia, Washington, Wisconsin, and Wyoming.)

A key characteristic of the pre-notice is that it is a prerequisite to the later filing of a mechanics’ lien under at least some circumstances. Pre-notice requirements usually require contractors and subcontractors to take action at the beginning of a project to secure their future right to file a mechanics’ lien — even if at this stage they are owed no money or have no reason to believe they would ever need to file a lien. In nearly every state with such a requirement, failing to file the pre-notice is a complete bar to ever filing a mechanics’ lien on the project in question. The pre-notice step is typically in addition to the other steps claimants already have to take to successfully make a lien claim. These other steps usually include filing and serving the lien and filing a lawsuit to enforce the lien by the required deadlines.

Proponents of pre-notice requirements often point to the positive consequences they can have for both claimants and project owners. Often, the purpose of these requirements is to place the project owner or its title insurer on notice of all parties who are furnishing labor or materials on the property. Notice of potential lien claimants helps owners avoid liens from emerging retroactively through the doctrine of “relation back,” which makes mechanics’ lien effective as of the date of the contractor’s first date of furnishing of labor or materials, even if the lien is not filed until later. Theoretically, if an owner knows who all of the subcontractors and suppliers are beforea closing or refinance occurs, the owner will have an incentive to pay any unpaid parties who could later file liens that would relate back to the parties’ first date of work on a project and cloud the title afterthe sale or refinance. Also, in many states the pre-notice will validate the lien even when the pre-notice is served after the statutory deadline as long as it is served before the property refinances or conveys to a new owner.

Potential Pitfalls

Because they add steps to the administrative and legal procedure for lien filing and potentially deter claimants from being successful, pre-notice requirements are generally unpopular among lien claimants. A less obvious, but significant, consequence of pre-notice requirements is the negative impact they can have on customer relationships. For many general contractors, pre-notices going from their subcontractors or suppliers to an owner feel overly aggressive because they come at the beginning of a project, when no money is likely to be owed yet. General contractors do not want their customers — the owners — to think that their subcontractors are worried about being paid promptly. General contractors also don’t enjoy the idea that a subcontractor or supplier is litigious or intends to one day file a lien on a project, and some of them make this known to their subcontractors. The result? Many potential lien claimants will refrain from filing or serving a pre-notice in an effort to satisfy the general contractors. But if the general contractor or owner encounters financial trouble or fails to make contract payments down the road, these would-be claimants will have jeopardized or eliminated their ability to assert a lien claim.

North Carolina’s statute is an example. The statute has long required that lien claimants file and serve their liens within 120 days of the last date of furnishing on a project and perfect their lien claims with a lawsuit within 180 days of the last date of furnishing. In 2013, North Carolina’s legislature added a pre-notice requirement that lien claimants file and serve a “Notice to Lien Agent” within 15 days of commencement or before a sale or refinance takes place. A Lien Agent is the title insurance company assigned to the project. The Notice to Lien Agent is typically served using an approved statewide electronic filing system that transmits notice not only to the Lien Agent but also to the general contractor. In addition to North Carolina, another 10 of the other states with pre-notice requirements also require the notice to be sent to the prime contractor. (These states include California, Georgia, Michigan, Minnesota, New Mexico, Ohio, Utah, Wyoming, and Virginia.)

For many general contractors, this sends a message that subcontractors or suppliers either don’t trust them to make timely payments, or, worse, that they intend to file a lien on the project. One North Carolina concrete supplier reported that as a regular practice, his company files and serves a Notice to Lien Agent on every project where it furnishes material, but that “we’ve lost customers over it.” He said that he understands why some suppliers don’t file the Notice to Lien Agent but said that for his company, protecting prospective lien rights and the right to full payment outweighs appeasing customers who are offended.

An impending change to the North Carolina statute may complicate the pre-notice procedure further. Beginning October 1, duly filed and served Notices to Lien Agent will expire after five years and will have to be renewed at that time. Furthermore, lien claimants will be required to “cancel” their Notice to Lien Agent “a reasonable time after the potential lien claimant has confirmed its receipt of final payment.”

Because North Carolina’s only approved electronic filing system for Notices to Lien Agent, www.liensnc.com, currently has no mechanism for canceling a Notice to Lien Agent, under the current system if a lien claimant has served the Notice, there is no official way to un-serve it. When the new law is passed and the electronic system is changed accordingly, general contractors who make their displeasure known to their subcontractors could potentially influence their subcontractors to cancel the pre-notice prematurely — thereby potentially eliminating their ability to file a mechanics’ lien, even if non-payment occurs.

Whether subcontractors and suppliers want to make a regular practice of filing and serving mechanics’ lien pre-notices is a judgment call for them. But in an increasing number of states, this could mean effectively waiving any lien rights they have.

Cool Roofs Are Still a Hot Topic

Figure 1. ASHRAE Climate Zone Map. Cool roofs are currently required in Zones 1-3 only.

The overwhelming consensus is that cool roofs are a clear top choice in warm climates, but what about cooler ones?

Studies and decades of real-world experience clearly show that cool roofs are net energy savers and improve thermal comfort in Climate Zones 1-3. The model codes (ASHRAE and the I-codes) already include requirements for some new and replacement roofs to be highly reflective in these areas.

But what about “cool, northern” climates like Climate Zone 4? Shown in yellow on the ASHRAE Climate Zone Map in Figure 1, Zone 4 stretches from the Mid-Atlantic across the southern Appalachian states to the southern Midwest.

There are a number of myths that have led to a notion that the dividing line between “warm” and “cool” lies between Climate Zone 3 and Zone 4. In “cool” climates where heating degree days outnumber cooling degree days, the traditional thinking goes, the cost of extra heating demand caused by cool roofs in winter would offset the cooling energy cost savings in summer. Despite decades of market experience and a vast body of research supporting the net benefits of cool roofs in Climate Zone 4, this line of thinking has been an obstacle to cool roof policy in the United States. Let’s dispel some of those myths by looking at a few facts.

  • Winter heating penalties associated with cool roofs in cool climates are vastly overstated. Higher insulation levels in Climate Zone 4 do not offset the benefits of cool roofs. Research over the last couple of year (field and modeling), some of which I’ve cited in this article, show that the so-called “winter heating penalty” is much smaller than many

    Figure 2. Peak demand is remarkably similar across climates. Source: Dr. Jim Hoff. “Reducing Peak Energy Demand: A Hidden Benefit of Cool Roofs.”

    thought. Specifically, a field and modeling study done at Princeton University’s campus (in Climate Zone 4) compared cool and black membranes over roofs with insulation levels up to R-48. The studies show that cool roofs reduce heat inflow in summer but have the same heat loss in winter as black surfaced roofs over the same level of insulation.
    Another study evaluated the impact of reflective roofs on new and older vintage commercial buildings in cold locations including Anchorage, Milwaukee, Montreal, and Toronto. All cities in the study are located in climates zones north of Climate Zone 4 and experience longer, colder winters than cities in Climate Zone 4. The study finds that “Cool roofs for the simulated buildings resulted in annual energy expenditure savings in all cold climates.” The study also identified peak energy savings in addition to the base energy efficiency gains.

  • Figure 3. Projected temperature change for mid-century (left) and end-of-century (right) in the United States under higher (top) and lower (bottom) emissions scenarios. The brackets on the thermometers represent the likely range of model projections, though lower or higher outcomes are possible. Source: USGCRP (2009).

    Heating and cooling degree days are not a good way to determine the appropriateness of cool roofs. Heating/cooling degree days indicate the intensity of the annual heating/cooling demand in a location, as a function of how far the outdoor air temperature is below/above a “comfortable” temperature and how much of the year is spent below/above that threshold. These metrics paint a misleading picture because they are based on outdoor air temperature and do not account for the sun’s ability to heat buildings or on the heat generated by human activity in the building. To illustrate this point, consider a cool sunny day during which the outdoor temperature approaches, but never exceeds, the comfort threshold (meaning zero cooling degree days). The sun may nevertheless heat the building enough throughout the day to require air conditioning by late afternoon, and cooling degree days would then underestimate actual cooling energy use.

Conversely, the sun’s heat on a cold sunny day may cause heating degree days

Figure 4. Energy cost increases and total damages from rising heat. Source: Solomon Hsiang et al. “Estimating economic damage from Climate Change in the U.S.” Science, June 2017.

to overstate the true demand for heating energy. This suggests that reflective roofs can save energy over the course of a year even if heating degree days exceed cooling degree days. Or take heat from building occupancy and activity — many commercial buildings run space cooling year-round, thus negating the concept of a heating penalty altogether. The effect of occupancy will only increase as building standards require more insulation and fewer air gaps. The comparison of heating and cooling degree days, though simple and logical-sounding, is actually a very unreliable rule of thumb for the assessing the suitability of reflective roofs.

  • Peak energy demand reduction is a huge, but often overlooked, benefit of cool roofs in all climate zones. Reflective roofs save the most energy during peak energy demand periods, like hot summer afternoons. Field studies indicate a peak demand savings of 15 percent to 30 percent resulting from reflective roofs (see http://www.coolrooftoolkit.org/wp-content/uploads/2012/07/CEE_FL-Cool-Roof.pdf).

Unfortunately, most energy savings calculators exclude peak demand, thus painting only a partial picture of the energy savings opportunity of cool roofs. Peak reductions are more than just an energy saver. Most utilities charge a peak demand fee to non-residential customers based on their maximum demand in a given period of time. This fee can be more than half the bill for some customers. Peak

Figure 5. Summers in New England could soon feel like summers in South Carolina. Source: Union of Concerned Scientists. “The Changing Northeast Climate,” 2006.

demand is also different from “base” cooling demand because it is not driven by climate. The graph in Figure 3 compares base and peak cooling demand for all U.S. climate zones and finds that peak demand requirements in Minneapolis are the same as they are in Phoenix.

  • “Cool” climates in the United States are starting to feel a lot hotter. Scientists predict an average increase in temperatures of 4-6 degrees Fahrenheit in the United States over the next 30 years or so. But as the maps in Figures 4 and 5 show, the amount of warming and its economic impact will be most acutely experienced in parts of the United States covered by Climate Zones 1 through 4.

It won’t just be hot areas getting hotter. An analysis by Union of Concerned Scientists forecast that, under a high but realistic emissions scenario, summers in New York City (the northernmost city in Climate Zone 4) could feel like South Carolina. Recently, the school district in Eau Claire, Wisconsin committed to replacing its black membrane roofs with white ones to help reduce temperatures during their increasingly hot summers. So, even if one still believes that Climate Zone 4 is too cool for cool roofs now, it certainly won’t be for long.

Improving Disaster Mitigation Strategies

This past January, the National Institute of Building Sciences (NIBS), a non-governmental, non-profit organization, reported that for every dollar spent on mitigation efforts to protect the built environment from the ravages of natural disasters, six dollars could be saved. These findings were part of a follow-up to the widely cited benefit-cost ratio of four to one in a comparable study by NIBS more than a decade ago. For this most recent study, NIBS reviewed the outcomes of 23 years of mitigation grants funded by FEMA, HUD, and the U.S. Economic Development Administration.

On the same day that the NIBS study was released, FEMA released its draft National Mitigation Investment Strategy to provide a “national approach to investments in mitigation activities and risk management across the United States.” According to the FEMA draft, the final investment strategy will be grounded in three fundamental principles: (1) catalyze private and non-profit sector mitigation investments and innovation; (2) improve collaboration between the federal government and state, local, tribal and territorial governments, respecting local expertise in mitigation investing; and (3) make data- and risk-informed decisions that include lifetime costs and risks. The investment strategy’s overarching goal, according to FEMA, is to improve the coordination and effectiveness of “mitigation investments,” defined as risk management actions taken to avoid, reduce, or transfer risks from natural hazards, including severe weather.

FEMA invited comment on its draft report and will publish its final strategy in November. Given the potential impact of this report on the built environment, and the industries that work to incorporate resilient strategies, the EPDM Roofing Association (ERA) submitted feedback to FEMA. ERA represents Johns Manville, Firestone Building Products, and Carlisle SynTec Inc., the three EPDM manufacturing members of the association, whose businesses span the globe. EPDM roofing membranes have been one of the leading commercial roofing materials in the country for the past 40 years, and the companies’ knowledge of the role of roof performance in achieving a building’s resilience is unparalleled.

In our response to FEMA, ERA noted that we appreciate the role that the built environment plays in a comprehensive disaster mitigation strategy. As an organization, ERA has invested time and resources to gather and provide state-of-the-art information about various approaches to creating a resilient built environment. This past year, ERA established a new microsite, EPDMtheresilientroof.com, to provide the roofing industry with a one-stop source for information about resilience. As part of information gathering for this site, ERA staff and members have visited three of the premier research facilities in the country: Oak Ridge National Laboratory, the Insurance Institute for Business and Home Safety (IBHS), and the National Center for Atmospheric Research. These visits were also devoted to gaining a fuller understanding of the intersection between public and private progress in research and development.

At the outset of our response to FEMA, ERA commended FEMA for its issuance of the draft strategy, and supported all the recommended goals as desirable as risk management strategies to be implemented at the private and public sector levels. However, given ERA’s experience with building performance, we also focused our comments on two of the specific recommended strategies in the published draft.

First, ERA responded to the recommendation that “Federal departments and agencies should ensure up-to-date building standards are used for federal building projects and could incentivize state, local, tribal and territorial governments receiving federal aid for building projects to adopt and enforce, at a minimum, the most current version of model building codes.”
Commenting on this recommendation, ERA pointed out that a review of hurricane and related weather catastrophic events demonstrates that the better the building quality and the better the building codes, the better the performance of the community. While there has been substantial improvement in many states across the country, adoption and compliance pose significant hurdles for overall performance in disaster events. The urgency of this cannot be overstated. Part of this effort to upgrade the building codes and consequently overall resilience must focus on the quality of materials, installation, and inspection of final construction to ensure compliance by local authorities.

The experiences of the roofing industry in its inspection of many disasters over the years have confirmed that a well-installed, inspected, and well-maintained roof is a linchpin of overall building resilience. ERA believes that federal funding to the states to allow for the kind of technical assistance that enhances code quality and state and local compliance programs necessary to achieve physical and community resilience should be provided.
Additionally, ERA responded specifically to the recommendation that “Public sector entities should focus more on rebuilding better as well as rebuilding quickly following damage caused by natural disasters.”
ERA pointed out in its response that this recommendation to achieve rebuilding better buildings quickly following damage caused by natural disasters is among the most important in the report. As FEMA Deputy Director Roy White has pointed out in several presentations focused on resilience, it makes no sense for the agency to fund rebuilding of a destroyed facility to standards that existed when the original building was constructed with the likelihood that it would not be able to withstand another weather event beyond historic norms. Consequently, ERA recommends that FEMA and HUD need to have authority and appropriations to ensure that rebuilding is done with an eye towards future — not historic — climate conditions. This is in recognition that the original basis for many buildings that then are destroyed has been dramatically changed by recently evolving weather patterns. In addition, as the FEMA and NIBS study recently demonstrated, there is a payback to the government of a 6 to 1 ratio for investing in rebuilding to a more resilient standard.

There are many, many elements of the draft strategy that ERA supports; however, we believe the two mentioned above are particularly within our expertise and with which we are very familiar. We look forward to the final mitigation strategy report from FEMA, due to be released in November, and we encourage FEMA to incorporate our recommendations to ensure that the value of investment in resilience be realized to the fullest extent possible.

Psychology-Based Strategies Can Help You Close More Deals

Getting potential customers to choose your roofing company rather than the competition comes down to more than just a name or reputation. Because consumer buying decisions are based in human psychology and emotion, you need to know how the brain interprets information so you can adjust your sales strategy accordingly.

To help close your next big roofing job, try incorporating some of the following psychology-based strategies into your advertising and sales pitch.

Use the Framing Effect

Consumers hate to miss out on opportunities.

For example, consider these two statements:

  1. Book an appointment online and receive a discount!
  2. Book an appointment online before August 1 and receive 10 percent off a new roof installation!

Both offer essentially the same proposition — book online to save some money. Put the first one on your website and you would get a few responses. Use the second appeal, however, and you could expect a considerably higher conversion rate.

Adding a deadline triggers a psychological technique known as the framing effect in your customers’ minds.

According to the framing effect, people react differently based on how options are presented. The thought of being left out — a condition known as loss aversion, or FOMO (fear of missing out) — causes a stronger, more immediate response than a simple discount or reward does.

Marketingland.com used college students to document how the framing effect works. Researchers sent emails reminding Ph.D. students to register for an economics conference. Some emails offered a discount for registering early, others mentioned a penalty for registering late. The penalty email had a much bigger impact, spurring 93 percent of the recipients to sign up early. By contrast, only 67 percent registered early when presented with the discount option.

Understanding the framing effect helps you position your value more effectively to customers. Combine that knowledge with some local market research and you have a good chance of outmaneuvering your competitors.

You Get What You Pay For

In addition to urgency and gain, consumers generally feel better when paying more for things that have tangible value versus paying less on a purchase with suspect quality or little value. To most consumers, price is a reflection of the quality of your work. Furthermore, your willingness to price match is a reflection of how much value they should place in you.

Consider the psychology of “we match all competitive quotes,” “lowest prices in town” or “free roof inspections.” You have set an expectation that your time has no value and your brand is built around a willingness to be cheap. When you take the time to defend your price with a well-developed sales pitch and refuse to compromise on quality, your customer will view your bid as a benchmark for all the rest.

Just keep in mind that you won’t win them all — because there will always be a segment of the market looking for the lowest cost and a company willing to offer it.

Avoid Analysis Paralysis

Always give customers fewer options. This strategy may sound counterintuitive, but if you give consumers too many alternatives, they are likely to avoid choosing any — a result known as “analysis paralysis.”

Instead of overwhelming buyers with every shingle type and color, group your products into a handful of categories from which they can choose, or perform a needs analysis to condition the sale before presenting product options.

Provide Social Proof

People like to fit in with the crowd and follow their peers. If one person approves of your services and products, his/her friends and family are likely to approve too. It’s a technique called social proof.

You can use digital media platforms to provide social proof and showcase how your current customers are benefitting from your roofing expertise.

For instance, always ask recent customers to write reviews on Facebook, Google and the Better Business Bureau (BBB). And don’t forget Yelp and other review sites. You can also encourage your customers to share your social content on their own Facebook pages, which they are more likely to do if you post transformative before-and-after photos and/or videos of their home.

Apply the Theory of Reciprocity

Giving people something helps create a bond between them and your company — even if it’s something as simple as a “like” on Facebook, a helpful video you share or an EagleView Report showing aerial images of their home.

Creating a feeling of loyalty can inspire customers to remember you when they are ready to tackle their next big project.

Let Your Body Talk

When meeting with prospects in person, use nonverbal cues in your body language to help make a good first impression and establish trust.

For instance:

  • Open your arms. Crossing your arms signals a closed-off or defensive attitude. Keeping your arms open and relaxed shows that you’re fully involved and interested in the discussion.
  • Lean forward. Leaning forward and in toward customers illustrates that you’re engaged in the conversation and paying attention.
  • Mirror. Try to match and mirror the body language of prospective buyers. Reflecting back the same posture, gestures and movements as your customers helps them to relax and feel comfortable during the sales pitch.

Tap Into The Reptilian Brain

Consumers continuously evaluate whether products and services are worth the cost. This decision-making process takes place in the reptilian brain — the oldest evolutionary layer of the brain. The reptilian brain is made up of the brain stem and cerebellum, which not only control the body’s vital functions, such as breathing and heart rate, but also instinctual actions and decisions.

Grab the attention of a customer’s reptilian brain with your company’s website or advertising and you’ll have a much better chance of guiding them toward a sale. This strategy is known as neuromarketing.

For example, the reptilian brain easily understands contrast. Show customers why your business is better than your competitor’s and why what you have to say is important. To stand out, use phrases such as “We are the only …” and “We are the best.”

The reptilian brain is geared to respond to visuals, so images can be far more persuasive than words. Be creative in your communications. Use short, simple sentences and include images that demonstrate the value of your claims. Incorporate customer testimonials as proof and share quick demonstrations of your products that will grab a consumer’s attention.

Incorporating psychology into your sales pitch and advertising is not about trying to trick customers. It’s about understanding how people’s brains interpret information so you can make decisions and focus your messaging accordingly.

Using these strategies to understand people’s minds can help you be more confident in your dealings with prospective customers and ultimately help you land more jobs.

Expert Advice on Exit, Succession and Contingency Planning

Images: Beacon Exit Planning

When the time comes to retire from your roofing business, will you have all of the proper financial and legal arrangements in place to avoid being clobbered by taxes or ending up in costly litigation?

Planning for your exit or succession requires a series of complex strategies that can take many years, so don’t waste any time getting started! Sit down with a knowledgeable, professional advisor who can guide you through the process of preserving your business legacy and securing your financial future.

Business-planning experts Kevin Kennedy and Joe Bazzano explain why roofing contractors need an exit or succession plan, common mistakes made during the process and best strategies for success. They also stress the importance of a contingency plan, which covers you and your business in case of life-changing events such as injury, illness or death.

Kennedy, CEO of Beacon Exit Planning, specializes in exit and succession planning for private business owners. He has firsthand experience with the challenges that come with selling a business after he and his two co-owners sold their 63-year-old roofing company to the business’ fourth-generation team. Making a few financial mistakes during the sale, and realizing he didn’t have a solid understanding of the technical aspects of exit planning, Kennedy put himself through two years of school to learn everything he could. Now he helps others avoid the same mistakes.

Bazzano, COO at Beacon, is a certified public accountant, certified valuation analyst and certified business exit consultant. His areas of expertise include financial reporting, consulting, business valuations, mergers and acquisitions, exit strategies, and tax planning and compliance for individuals and businesses. Bazzano shows business owners how to increase the value of their companies and save on taxes.

Exit Planning

An exit plan helps you control and visualize the process of transferring and monetizing your business, while also gaining a better understanding of all the financial aspects involved in the transaction.

In most situations, business owners have 70 percent of their wealth tied up in their illiquid business, which means the company and its assets cannot easily be converted into cash.

Images: Beacon Exit Planning

If you’re fortunate enough to sell your roofing business, you could pay up to 60 percent or more in taxes, depending on which state you live in. And if you can’t sell your company, you will essentially have to liquidate it, which could leave you with only 10 percent of your wealth.

During the exit-planning process, Bazzano says they look at the three basic circles of a business owner’s life: business planning, personal planning and financial planning.

The business-planning circle is about protecting the business — determining valuation, planning for succession, evaluating tax ramifications and managing buy/sell risk. The personal-planning circle involves the emotional side of the business and considers the owner’s emotional attachment to the business, whether he or she is ready to leave it and if family members are involved. The financial-planning circle includes identifying the liquid assets business owners need to survive and maintain their lifestyle.

Contractors have several options for exiting their business, including:

  • Selling to an outsider (e.g., consolidator, investor)
  • Selling to employees/ESOP (employee stock ownership plan)
  • Selling to managers (manager buyout)
  • Selling to family
  • Gifting the company

Kennedy says the most common type of sale for a roofing business is a manager buyout, which can take from eight to 12 years because the company pays for everything.

“They don’t go to the bank and get the big loan,” Kennedy says. “The company can’t afford to do that. What they do is take their profits, and the profits pay for the owner’s stock, which is then given to the managers.”

Common mistakes during the exit-planning process include issues with entity structure, taxes, not planning for catastrophic events, being underfunded with buy/sell agreements, and inaccurate valuations.

Bazzano says lessening your dependency on the business as an income source after you leave is a particularly important strategy to keep in mind.

“It doesn’t always happen because business owners grow and reinvest in their business,” he explains. “But there’s nothing worse than being 65 years old and realizing that 92 percent of your wealth is in this business. Basically, you’ve reinvested everything and you’re completely dependent on monetizing this business as you try to retire. That’s pretty risky, as opposed to somebody who’s got maybe 20, 30 or maybe even 50 percent of their net worth in the business. So taking some chips off the table really helps.”

Having a good understanding of your options early on can help you generate more value in your company and lessen your financial risk down the road.

At Beacon Exit Planning, Kennedy and Bazzano use a proprietary process — known as DAD — that covers three phases of actions needed for a successful exit plan:

  • Discovery. Interviewing owners to get an understanding of their business, personal and financial goals.
  • Analysis.Looking at underlying documents such as wills, trusts, buy/sell agreements, financial statements, tax returns and entity formation, and evaluating whether they support the owners’ intentions and goals.
  • Design. Putting together a blueprint to solidify goals, going over findings from the analysis phase and presenting alternatives owners can use to exit their business.

The DAD plan can range from 50 to 120 pages. “It’s like being fed with a fire hose,” Kennedy says. “But we always tell our clients that we when we deliver the plan, it’s not the end — it’s the beginning.”

Succession Planning

In contrast, a succession plan prepares your company to succeed without you by moving your managers into leadership roles, then into ownership and eventually establishes the new CEO.

Exit planning focuses on replacing your wealth, but succession planning focuses on replacing yourself, Kennedy explains.

“In a broader sense, it’s about building value — creating a culture of continuous improvement that focuses on educating the next generation of owners so they can protect the future of the company,” he says.

Fewer than 30 percent of all private companies ever transfer to the second generation, according to Kennedy. This means that 70 percent fail. The statistics are even worse for transferring from the second generation to the third generation, which has a 90 percent fail rate. The odds that company founders will transfer their business to their grandchildren are less than 3 percent.

When Kennedy and his partners sold their roofing company via a management buyout, the process took seven years and $250,000.

“Our company overspent millions of dollars in taxes that were unnecessary because of the cookie-cutter advice [we received] from our advisors,” he explains. “They weren’t specialists. It wasn’t a coordinated plan, they didn’t have the right advice, and they didn’t understand the laws, so we were put in a taxed position.”

Succession plans can take anywhere from three to 10 years, depending on the maturity of the management and how much the owner is working. The process requires more time than exit planning because of the learning curve required for new managers.

“At any given time, 40 percent of U.S. businesses are facing the transfer of ownership issue,” according to the Small Business Administration (SBA). “The primary cause for failure is the lack of planning.”

Some 75 percent of a typical business owner’s net worth is tied up in the company, Kennedy adds, citing data from the SBA, and only 22 percent of owners report planning for their succession or exit.

“Wise people plan early and implement slowly,” he says. “I like to see people going through the process of visualizing their financial future at least 15 years out. That would be ideal because it may take three or four years to set the plan in motion.”

Succession planning may be complicated more when family is involved. Children or other family members who think they’re entitled to the company can be poisonous to the process, especially when owners don’t hold them to the same standards and accountability as other employees.

Another issue business owners face is that they can’t see their financial future and are dependent on their business for their day-to-day lives, Kennedy says. “If they don’t relinquish what duties they have so they can build new leadership, they tend to get stuck in their businesses.”

Bazzano shares three important steps for a successful succession:

  1. Have a good financial plan so you can understand the future income needs for the company.
  2. Get a business appraisal so you understand if you have a value gap. In other words, if you have not saved enough money for retirement, the shortfall is going to come from the sale of the business.
  3. Put a good management team in place so it can support you in generating the income the business will need to pay you out. This step typically takes the longest — anywhere from two to 10 years.

“The great news about succession is it always adds to the bottom line, not just the financial value,” Kennedy says. “The key is to start early because succession takes time. It’s a complex process. The exit plan will get you started and the succession plan will bring everything together to allow a graceful exit from your business and protect your wealth.”

Contingency Planning

Regardless of your exit strategy, your plan should also include preparing for the unexpected.

What would happen to your business if you were diagnosed with a life-threatening disease or were critically injured in an accident — or worse? Having a contingency plan for “just in case” can help to cement the future of those you love.

One of the most important parts of a contingency plan is a buy/sell agreement. This document governs what will happen if one of a company’s multiple owners and/or shareholders dies or experiences divorce, disability or voluntary/involuntary departure.

“A buy/sell agreement should have the appropriate documentation and appropriate wording to support the owner’s intentions,” Bazzano says.

This type of agreement allows co-owners to decide who else can buy into the company and how the process will work. It also provides an opportunity for owners to discuss potential scenarios ahead of time to avoid ending up in pricey litigation down the road.

Despite the importance of creating a buy-sell agreement, more than 70 percent of business owners do not have documented succession plans for senior roles, according to the 2014-2015 U.S. Family Business Survey conducted by the consulting firm PwC.

Contingency plans and buy/sell agreements are living, breathing documents and should be started as soon as the business is established, according to Bazzano. They should also be reviewed regularly to account for changes in the company’s structure or value, or an owner’s intentions.

The most difficult event to plan for, of course, is death. The loss not only puts an emotional burden on a family, it can also create a financial one. Without a proper contingency plan in place, a family could lose its income stream and experience financial turmoil.

One of the most common mistakes Kennedy and Bazzano see in contingency plans is improperly structured documents. For instance, the owner of a roofing business may think everything is in place because he/she has a will, trust and insurance — yet each document was set up by different people, none of whom talked to each other during the process.

Another issue in contingency plans is that companies are underfunded with their buy/sell agreements and insurance, Bazzano says, which often includes issues with valuation that prevent a widow from receiving the full worth of the company.

Business owners can also fail to understand how to manage their risk. Bazzano says business owners need to do a better job of protecting their wealth and the companies themselves, which involves understanding insurance requirements and asset protection, and knowing how to structure their estate and the business to limit exposure to frivolous lawsuits and creditors.

Planning to leave your roofing company — whether to retire, pursue another interest or because something unexpected happens — can be an overwhelming and confusing process. However, enlisting the services of an exit-planning professional can help you avoid big headaches and save you countless dollars in taxes.

To find a consultant you can trust, ask questions such as:

  • What is your training in exit planning?
  • How many exit plans have you delivered?
  • How much have you saved your customers in taxes?
  • Do you have any referrals from existing clients?

To learn more about Kevin Kennedy and Joe Bazzano, and for access to more in-depth information about the exit planning process, visit www.BeaconExitPlanning.com.

 

Easy-to-Use Discs Enable Induction Welding of PVC and TPO Membranes Over EPS Insulations

With induction welding, the membrane is heat bonded to the top of each plate and there are no penetrations in the membrane. Photo OMG

Over the past ten years, North American roofers have begun to adopt induction welding as a fast, simple and secure way to mechanically attach TPO and PVC membranes. The method also helps create a high-performance roof assembly by eliminating fastener penetrations of the membrane.

For most of its history, induction welding was limited to installations over thermoset insulations such as polyiso or over other rigid insulations with a cover board. But now, a deceptively simple and easy-to-use disc enables roofers to use induction welding over expanded polystyrene (EPS) insulations that don’t have cover boards. The result is faster and more affordable insulation installation and lower fatigue for work crews.

The Induction Welding Method in Brief

A roof fastener manufacturer pioneered induction welding attachment as a way for roofers to streamline TPO and PVC membrane installation, while avoiding membrane penetrations, for a more watertight roof assembly.

A roofing technician seals the seam with hot-air welder. Photo: Insulfoam

In a typical mechanically fastened membrane system, roofers secure the membrane with 2-inch to 3-inch diameter plates on the seams held down by screws that pass through the membrane and insulation layers to the underlying deck. With the induction welding method, each plate becomes a fastening point for the membrane, and the membrane is heat bonded to the top of each plate. With this method, crews screw down the insulation layer as usual, then unroll the membrane over the insulation. They then place a stand-up or handheld induction welding tool on the membrane at each plate location. In less than five seconds, the tool heats the plate under the membrane to about 400 degrees Fahrenheit, bonding the membrane to the plate. Heating is accomplished via electromagnetic induction between the tool and the plate, rather than via direct application of heat (think of an induction cooktop compared to conventional stove heating coils). Induction welding meets the FM 4470 approval standard and is accepted by most membrane manufacturers.

Induction welding typically requires 25 percent to 50 percent fewer fasteners and plates than typical mechanically fastened installations, as well as fewer seams, resulting in both labor and material savings. As the fasteners are spread across the roof in a grid pattern, the resulting assembly enhances resistance to wind uplift and reduces membrane sheet flutter.

EPS Insulations and Induction Welding

Until now, the induction welding process could not be used with EPS insulations that lacked a cover board, as

EPS insulations can be used in both new construction and roof recovers. Photo: Insulfoam

the 400-degree heated plates caused the insulation to soften and draw back. This resulted in numerous depressions in the roof assembly (at each fastener location), where water could pond.

To enable use of the induction welding process with a broader range of rigid foam insulations, fastener manufacturers have developed a simple solution. For each fastener, crews place a thin disc between the fastener plate and insulation. This separation medium protects the EPS from the high heat of the induction welding process, without interfering with the bond between the membrane and the fastener plate. Manufacturers typically refer to these separators as “induction welding cardboard discs.” While they are paper-based products, calling them “cardboard” understates their performance, as they are densely compressed and have a moisture-resistant coating, so they work well in high-performance roof systems.

Why This Matters

For roofers who prefer using EPS insulations for the products’ thermal performance and ease of installation, the discs allow them also to achieve the benefits of the induction welding process discussed above.

Induction welding cardboard discs enable use of the induction welding attachment process for TPO and PVC membranes over EPS insulation. Photo: Insulfoam

While induction welding has always been possible using EPS insulation products that have standard cover boards, the discs make it possible to induction weld over EPS products with glass facers and fanfold EPS with polymeric facers. Glass-faced EPS products can be used in new applications and recovers while roofers typically use fanfold EPS in roof recovers.

Fanfold EPS bundles, like R-TECH FF and others, are available in standard sizes up to 200 square feet, comprised of 25 panels that are 2 feet by 4 feet each, and come in various thicknesses. A typical two-square bundle weighs less than 11 pounds, so it is easy for one person to carry. EPS fanfold bundles require fewer fasteners per square foot than most roofing insulations and are less expensive than virtually every recover board. The man-hours needed to install fanfold bundles are about 60 percent less than working with individual sheets. Material costs are also lower than wood fiber, perlite, or gypsum board. On large projects, the

Induction welding typically requires fewer fasteners and plates than mechanically fastened applications, resulting in both labor and material savings. Photo: OMG

total savings can add up to tens of thousands of dollars. As with other EPS insulations, the product’s light weight also means less crew fatigue.

As roofers look for ways to create cost-effective, high-quality roof assemblies, new methods provide the opportunity to boost the bottom line by reducing labor and material costs. A simple, affordable disc now enables you to obtain the benefits of both the induction welding method for fastening TPO and PVC membranes and the advantages of EPS insulations.

Are You Meeting Thermal Insulation Code Requirements?

Photo 1. Conditions such as this, in which the fastener plates melt the snow, visually demonstrate the heat loss that is a known entity to roof installers and knowledgeable roofing professionals.

You may have overheard conversations such as this:

New Building Owner: “You promised energy conservation and savings.”

Mechanical Engineer: “We sized the mechanical unit based on the code required effective thermal value.”

New Building Owner: “But why are my cost 30 percent above your estimates and I am needing to run my units constantly and they still barely maintain a comfortable environment?”

Mechanical Engineer: “We have checked all the set points and systems and they are all working, albeit with a bit of laboring. We don’t know why there is not enough heat.”

New Building Owner: “Well, someone is going to have to pay for this!”

Scenarios and liability questions like this are being repeated across the northern North American continent, and to mechanical engineers, architects and owners, the cause is a mystery. Perhaps they should have talked to seasoned roofing professionals and consultants. They could’ve told them that many mechanically attached roofs, incorrectly promoted and sold as energy-saving systems, were actually energy pigs. One only needed to walk a mechanically attached roof with a few inches of snow on it to see the heat loss occurring. It doesn’t take scientific studies and long-winded scenarios to prove this — just get up on the roof and see it. (See Photo 1.)

Photo 2. When a light dusting of snow blew off this 2 million-square-foot facility in central Illinois, every single mechanical fastener and insulation joint could be identified by the ice visible at their locations. This roof needed to be replaced due to condensation issues several years after installation at a cost of more than $10 million.

I spoke on this topic back in 2007 at the RCI Cool Roofing Symposium. I always like being a soothsayer, and several recent studies are demonstrating and attempting to quantify this energy loss that most roofers could tell you was there.

For years the NRCA suggested a loss of thermal value of 7 percent to 15 percent through the joints in a single-layer insulation application and through mechanical fasteners used to secure the insulation. (The NRCA has since removed this figure and suggests that professionals be consulted to determine thermal heat loss.) The NRCA recommended a cover board to reduce this effect. This was at a time when roof covers were predominantly BUR, modified bitumen or adhered single plies. The upsurge in mechanically attached single-ply membranes, brought on by low-cost installation and the promise of energy savings, changed the game. No one was asking, if there could be a loss of 7-15 percent when mechanically attaching insulation, what could the effective R-value loss be when we install thousands of fasteners and plates 12 inches on center (or less) down a membrane lap seam? Gee, haven’t we seen that before?

Code Requirements

The code and standard bodies — ICC, IECC, ASHRAE — have been repeatedly raising required thermal insulation values over the past decade in an attempt to conserve energy; that is their intent. They listened to astute designers and

Photo 3.This is close-up of the roof shown in Photo 2. Heat loss through the screws and fastener plates and through joints in the single layer of insulation melted the snow. The water froze when the temperatures dropped and the ice was revealed when a light wind pillowed the membrane and the remaining snow blew away.

prescribed two layers of insulation, and then again to determine the minimum R-value and not allow averages. The intent is clear. The required R-value per ASHRAE zone is to be achieved.

Their goals were laudable, but not all roof systems achieved the in-place R-values required. So, this article is in part an attempt to educate code officials and explain the need for a change.

Words can explain the phenomenon of thermal loss, but photos are worth a thousand words, and since my editor has told me that I cannot have a 4,000-word article, I leave it to the photos to do the talking. (See Photos 2, 3 and 4.)

Scientific Studies

In their Buildings 2016 article titled “Three-Dimensional Heat Transfer Analysis of Metal Fasteners in Roofing Systems,” Singh, Gulati, Srinivasan and Bhandari (Singh) studied the effect of heat transfer through thermal bridging (mechanical fasteners) in various roof assembly scenarios.

Their study exposes a shortfall in many standards that have as their goal a reduction in energy loss through building envelope systems through prescriptive approaches. For roofing assemblies, standards prescribe a minimum R-value, but they do not take into consideration the heat loss that happens though metal fasteners. There are no guidelines or recommendations in regards to thermal loss, including the loss of heat through roof system fasteners. It’s actually ignored.

Figure A: The effect of mechanical fasteners below the roof cover in mechanically attached roofs is not negligible as considered by general standards. As can be seen here for systems 1A and 1 B, in which mechanical fasteners are used in the lap seams of the roof cover (systems 3A and 3B have the fasteners below a layer of insulation), the actual thermal value loss caused by mechanical fasteners can be as high as 48 percent, as seen in system 1A with a high density of mechanical fasteners. As the mechanical fastener density decreases (1B), the heat loss also decreases. Thus, a correlation appears to exist in which heat loss due to thermal bridging is proportional to the fastener density.

The results of the Singh study, as seen in the graph (Figure A), show that the effects of thermal shorts, e.g., mechanical fasteners used to secure the roof cover, is not negligible. In fact, thermal shorts can result in a loss of 48 percent of the effective value. Read that again! The thermal value of the roof insulation layer on which the mechanical engineer has in part sized the mechanical equipment — and which the owner is counting on for significant energy savings — could be about half of what was assumed. Add in gaps and voids, and the loss in the effective R-value could top 50 percent. What that means is that to achieve the code required R-30, say in Chicago, mechanically fastened roof systems need to have R-45 in the design to meet the effective code required R-value. This last sentence is for the code bodies — are you listening?

The value of this study cannot be underestimated, as thousands of buildings have been constructed since its publication that would not meet an effective R-value check in a commissioning study.

Changing the Code

The energy inefficiency of mechanically attached roof systems in ASHRAE zones 4 and above has been known to roofing crews for decades. Now, with the requisite scientific studies completed, the codes need to be revised to reflect the inherent thermal loss through mechanical fasteners. Additionally, studies from Oak Ridge National Laboratory highlight the energy increase required with inherent air changes below the membrane, confirming the need for air/vapor barriers on the deck on mechanically attached roof assemblies. (See “The Energy Penalty Associated with the Use of Mechanically Attached Roofing Systems,” by Pallin, Kehrer and Desjarlais.)

Photo 4: Heat loss also occurs through adhered roofs when the insulation is mechanically attached.

As a starting point for code groups and officials, I suggest the following code revisions:

  1. State that if a mechanically attached roof cover is being used that the prescribed thermal R-value shall be increased by 50 percent.
  2. State that if a mechanically attached roof cover is being used that an air barrier below the insulation must be used and that it shall be fully adhered to penetrations and roof perimeters.

Closing Thoughts

The goal of energy conservation is a laudable one. The American Institute of Architects’ goal of zero-energy building by 2030 will never be met until real-world empirical information can be presented at code hearings. (For those of you who do not attend code hearings or know the process, information is usually disseminated in two-minute sound bites without documentation.) This lack of information sharing is a travesty and has resulted in numerous code changes that have been detrimental to the goal of energy savings. Time has come for a new way of thinking.