6 Steps for Creating a Disaster Recovery Plan for Your Multifamily Property

If Billy Joel had to redo and update his classic song, “We Didn’t Start the Fire,” he would undoubtedly refer to major catastrophic events that have taken place over the last few decades. Tsunamis, hurricanes, earthquakes, wildfires, hailstorms, brownouts, cyber-attacks, and a host of other less-than-desirable situations would have given him a wide canvas to paint a grim picture. We didn’t start it, but are we fighting it? Or better yet, still planning for it? Recovering from disasters is much easier if there is a comprehensive plan in place. 

Recently one of our properties in the Atlanta area was in the path of Hurricane Ian. Fortunately, hurricanes give you the luxury of time to prepare, and we did. We had a written plan that could be executed to minimize damage. This included boarding up vulnerable windows, turning off gas, ensuring water supplies, informing residents, and assisting senior residents in ensuring they were safe and secure and had adequate supplies of medicines, water, and other essentials. The effort was coordinated, and the end result was a professional approach to handling a disaster. Fortunately for us, Hurricane Ian gave us a miss.

Here are steps for creating and implementing your own disaster recovery plan:

 

1. Form a Disaster Recovery (DR) Team

The DR team is responsible for developing a robust plan. Typically, these teams consist of a management representative, an on-site manager, a maintenance supervisor, and outside consultants if required. This team will assess the needs of the multifamily property and develop a plan that takes into account local conditions.

Multifamily assets do not have large cadres of staff. A typical multifamily property includes three front office employees and three maintenance staff members. 

 

 

Having a small staff has its positives and negatives when assigning responsibilities and tasks for DR purposes. On the positive side, it’s easy to delegate responsibilities, and also much easier to coordinate responses when faced with a disaster.

On the negative side, due to the multitude of tasks and responsibilities, it is easy to overwhelm the team. Also, during some emergencies, a staff member may not be able to be on-site. These situations will add pressure to other staff members.

 

2. Assess Risks

Risk assessment is a critical part of plan development. Potentially, there are dozens of disasters that could strike a multifamily property. Realistically, some can be ignored and don't require a plan. For example, if a property is located in an area at low risk for earthquakes, preparing for this is impractical, and time and effort are better spent elsewhere. However, if the same property is in a flood plain, planning for a flood is vital.

Once the team has identified the risks, a set of actions and responsibilities can be developed. Staff can be assigned responsibilities and cross-fertilization of tasks can reduce dependency on a single staff member.

 

3. Identify Resources

Resources are not infinite — disaster recovery plans should include contingency budgets that make allowances for necessary activity. It’s important to ensure that money or a line of credit is available to be tapped to handle various situations. Human capital also comes under this heading.

 

 

It’s also important to remember that staff is not fungible, and during a crisis, they may require extra support. Multifamily property owners should always consider that staff may have family members such as young children or older adults that depend on them during this period. Make sure available resources can be allocated based on a critical-need-first basis.

 

4. Make a List of Business Essentials

Every business has some areas, processes, or equipment that are deemed essential for post-disaster recovery. These may be data (customers, renters, intellectual property, etc.), IT equipment, vehicles, or specialized equipment.  This area sometimes gets overlooked during the planning stage, but do so at your own peril. A list of business essentials is an integral part of any disaster recovery plan. 

 

 

What is the plan to ensure that these business essentials are safe and retrievable post-disaster? Offsite storage, cloud storage, etc., could be solutions. Better to put a plan in place during normal circumstances than during a disaster.

 

5. Get Feedback

If key employees have input during the disaster recovery planning stage, plan acceptance is usually much easier to achieve. Once a plan is complete, discuss it with employees. Ensure each understands their roles and responsibilities during this period of time. Ask for feedback and incorporate this into the plan. 

 

6. Test and Revise Your Plan as Necessary

A disaster recovery plan has to be tested. This can be a “tabletop” exercise where everyone is gathered in a room and each person outlines their responsibilities during a made-up scenario. If done correctly, gaps in the plan will come to light and corrections can be made.

Employee participation makes the difference between success and failure. Small prizes at the end of a test session are usually a welcome acknowledgment of a job well done.

 

 

At first, disaster recovery planning may seem like an expense you can postpone, but doing so would be a mistake. Proactively taking steps now will allow you to ensure your investment remains as secure as possible in the future.

 

About the Author:

Veena Jetti is the founding partner of Vive Funds, a unique commercial real estate firm that specializes in curating conservative opportunities for investors.