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Legal Obsolescence
One of five primary types of obsolescence and a force of retirement of assets.

Legislation, or other directive/order, issued by an authority having jurisdiction, resulting in the prohibitive use of certain assets unless specified changes are introduced or renewal is carried out.



Attributes
Legal obsolescence has the following general attributes:

  • The owners are given a deadline for compliance.
  • A form of external obsolescence that is curable through some form of remediation or grandfathering.
  • The remedy is prescribed or minimum standards are set.
  • The challenger asset is an upgrade to the defender asset.
  • The challenger asset will have an incremental cost to be factored into the replacement planning.
  • The Asset Strategic Importance is too critical to the safety of the occupants and uptime is so essential.

Legal Obsolescence Mapped to the P-F Interval
Listed below are some examples:
  • The announcement of a recall (“P” potential failure) of a certain deficient asset, such as certain sprinkler heads, leads to the negative impact on insurance coverage (“F” functional failure) and necessitates renewal.  
  • Due to health concerns associated with the manufacturing process, production of asbestos containing (AC) pipe ceased in the United States in the early 1970s ("P"). Bursting and reaming of the pipe at the end of its 50 year service life ("F").

Causes of Legal Obsolesence
This form of obsolescence is the result of:

Susceptible Assets
The following assets are prone to legal obsolescence:

Listed below are some examples of legal obsolescence:

  • An Order to replace bottom type hydraulic elevator cylinders with PVC encapsulated cylinders.
  • Removal/abatement of asbestos material.
  • Fire regulations requiring the replacement of dry sprinkler compressors that are older than 15 years. 

Mitigation and Planning:
The effects of legal obsolescence can sometimes be managed and mitigated through the following:
         P-F interval
  • Understanding how to anticipate and identify the points of potential failure ("P") and functional failure ("F") relative to the P-F interval.
  • "P" occurs when the authority having jurisdictions issues the order and "F" occurs at the deadline issued by the authority.
  • Periodic testing and inspections by persons having knowledge of industry developments to identify leading indicators and coincident indicators.
  • Recognition of the Asset Condition Risk (ACR) classification and Asset Strategic Importance (ASI) classification.
  • Timely compliance and demonstration of due diligence.
  • Insurance Policy

Example Retrofit Projects:
  • Seismic Retrofit
  • PVC Encapsulated Cyclinder Retrofit
  • Sprinkler Head Retrofit
  • Emergency Telephone Retrofit
  • Face-Seal to Rain-Screen Cladding Retrofit
  • Acrylic Dome Skylights to Unit Skylights
  • PCB containing fluorescent light ballasts
Retrofit of elevator hydraulic cylinder with PVC corrosion protection
Fig. Elevator buried cylinder retrofit with PVC encapsulation due to legal obsolescence and safety order. Read bulletin here.


Fire sprinkler head retrofit due to product recall. Fig. Sprinkler head retrofit due to legal obsolescence arising from product recall.


Pull stations order
Fig.  Pull stations requiring replacement. Read bulletin here.


1
Fig. Safety tag on an asset with asbestos containing materials (ACMs).


The forces of retirement mapped onto the P-F curve
Fig. Legal obsolescence mapped onto the P-F curve alongside the other forces of retirement.


Retrofit of acrylic dome skylights to unit skylights
Fig. Retrofit of acrylic dome skylights to unit skylights.


Legal obsolescence resulting from a safety order issued by an authority having jurisdiction
Fig. Legal obsolescence resulting from a safety order issued by an authority having jurisdiction.

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I. Care is in a panic as some of his assets are "fading" away while others are "degrading"
Fig. I. Care is in a panic as some of his assets are "fading" away while others are "degrading". Technological obsolescence is a form of fading.

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