A step at a time on the road to rebuilding.

In the aftermath of the Northridge earthquake, condominium homeowner associations, apartment building owners, and other income property investors now face the daunting task of rebuilding. Clearly, there are complicated issues involved, but the process itself need not be complicated.

The best advice is to break the whole process into steps, make a list, and start at the beginning. For example, it you have earthquake insurance, contact your insurance carrier. The deductible for an earthquake policy is generally about 10% of the replacement value of the building.

If the replacement value of your apartment building or condominium is $2,000,000, the deductible is $200,000. Of course, the method for paying for the first $200,000 in damages depends on individual circumstances. When a loan is necessary, contact FEMA, which will provide the appropriate forms for a low interest rate SBA emergency relief loan. Next, contact your mortgage lender to see if it offers special compensatory programs such as deferred payments. In the case of a condominium homeowner association, the board of directors may choose to require a special assessment from the owners to pay for part or all of the deductible.

The rebuilding process will take time and patience. Even so, you should have plans and specifications prepared for obtaining bids and selecting a general contractor.

To prepare your plans, you can engage the services of an architect or an engineer. As a rule, architects are somewhat more experienced than engineers in moving plans through the city plan check system. Choosing to work with an architect may speed up the process. Next, an engineer is hired by you or your architect. Working together as a team, they prepare plans designed to meet building codes. Once the plans are completed, they're submitted to the department of building and safety for a plan check, and a city engineer reviews them to ensure compliance with code.

Most of the time, minor corrections or clarifications are required. The architect and engineer will incorporate these changes and then re-submit the plans for a final review. Fortunately, re-inspection and final approval can often be accomplished over the counter at the time of submission.

Plans are then stamped 'approved' subject to the payment of a plan check fee. Typically this fee is based on the estimated value of the work to be completed. However, special allowances are currently being considered to reduce the plan check fee for earthquake victims. In some cities, such as Santa Monica, the fee is actually being waived.

It is usually safe to assume that major changes in plan check are unlikely, and the projected cost of repairs will not be significantly affected. Thus, plans and specifications in the plan check process can still be used to obtain prices from general contractors.

In fact, obtaining bids while in plan check saves valuable time. You can collect these bids yourself, or you can have your architect handle this responsibility in a more formal manner with specific guidelines. These will help standardize the bid process so that all contractors have a clear understanding of the work involved. The number of bids required is a matter of personal preference; however, in most cases three should be sufficient.

Finally, be certain that your contractor is licensed, adequately insured, and experienced in the specific type of construction project you are undertaking. For example, if you own an apartment building, or if you represent a condominium association, make sure that the contractor has building experience with these types of structures. Financing notwithstanding, you are now ready to hire a contractor and begin work. Securing adequate financing will probably be the last piece of the puzzle to fall into place. But again, don't wait until financing is confirmed to begin the process, otherwise the scope of the project and the actual cost of repairs will be a matter of endless and unnecessary speculation. Steven Cole is a managing partner and Andrew Sussman is an architect with Santa Monica-based Wilshire Pacific Equities.