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Articles Posted in Maintenance

*Asked & Answered

software-contract-negotiationsAsked Our Board of Directors has been seeking to switch out a vendor for some time, but we have been waiting for the current contract to expire. It has become known that the current vendor contract automatically “renewed” for another 5-year period because we did not provide notice of our intent to terminate at least 90 days before the contract expired. This termination notice period was required under the terms of the agreement, but we were unaware of it until it was too late. Is there anything we can do to get out from under this contract?

AnsweredUnfortunately, certain service agreements (such as waste disposal agreements, among others) may contain provisions whereby the contract continues in perpetuity, even after the expiration of the initial term, unless affirmative cancellation notice is provided to the vendor. These contracts are usually referred to as “evergreen” contracts because they automatically renew unless otherwise cancelled by the association within a specified period. Each situation is unique so counsel should be consulted to review the contract to determine if there is a legal basis for termination.

California HOA lawyers However, prevention is the best remedy so all significant vendor contracts should be reviewed by counsel, prior to execution, to remove or negotiate burdensome provisions such as “evergreen” clauses. This can save significant time and expense in the future. In addition, associations should calendar all termination requirements and notice periods contained in their agreements so that they do not lapse.

-Blog post authored by TLG Attorney, Tim D. Klubnikin, Esq.

LBLandslide060105Southern California is known for the warm weather, relaxing atmosphere, and in certain cases, picturesque Homeowners Associations (HOA) situated high enough to see the ocean.  However, what happens when those picture-perfect HOAs have a slope movement/failure?  What should the Board of Directors (Board) do?

Slope Maintenance

Slopes within an HOA development are usually maintained by the HOAs via a maintenance agreement, by the Lighting and Landscape Assessment District (LLAD), or by the homeowners themselves.  Slope maintenance involves management of sub-surface and above-surface areas.

Sub-surface maintenance will most likely involve vegetation root volume and irrigation system preservation, which is integral in supporting the slope structure itself.  For steeper slopes, there might be a heavier support system built into the slope.  Above-surface maintenance will most likely involve vegetation/brush preservation for aesthetical purposes and to prevent fire hazards, among other things.

The HOA’s management should routinely follow-up with the HOA’s landscape maintenance crew to monitor the slope, v-ditch (concrete channel usually at the bottom of a hill to collect drainage) and other drainage routes, and water pipelines.  If maintained properly—barring extenuating circumstances—naturally occurring slope movement should be very minimal.  It should be noted that there is always some sort of slope movement due to erosion and time.  However, should abnormal slope movement/failure be noticed, the HOA’s management company and Board should and must be notified immediately.

Improvements on Slopes

The structural integrity of slopes is very complex.  This means homeowners should consult with the HOA’s management and Architectural Committee before placing any improvements on or surrounding the slope as improperly engineered improvements may cause unwanted slope movement/failure.

Improvements may vary, but the most common ones are plants, fences, poles, pipes, decks, patios, and walkways.  The Board should be aware of any improvements that change or interfere with the contour/drainage/support system of the slope.  It would be prudent to require homeowners to submit an Architectural Application consisting of detailed improvement plans that have been vetted by a licensed geotechnical expert familiar with slopes.  Furthermore, to cover all bases of liability, the Architectural Committee should retain its own geotechnical expert to analyze whether allowing said improvement(s) would be detrimental to the integrity of the slope.  Such measures might cost a bit upfront, but compared to a major slope movement/failure, a geotechnical bill to analyze improvement plans would be inconsequential.

Board Action

An HOA’s Board will be called upon to act in the event of slope movement/failure.  It is important for the Board to take immediate action as slope movement/failure can be detrimental to the physical wellbeing of everyone in the community and the homeowners’ properties involved.  Additionally, immediate action will ensure that more data may be collected for the analyzation of the slope movement/failure. Here are a few things for the Board to consider:

  1. Note the approximate time of the slope movement/failure
  2. Catalog picture and video evidence of the slope movement/failure and any homeowners’ property damage
  3. Contact the HOA’s general counsel
  4. Create an executive committee to promptly handle all matters pertaining to the slope movement/failure
  5. Consult/retain a geotechnical expert as soon as possible
  6. Contact the HOA’s landscape maintenance crew regarding any potential broken irrigation pipelines and/or hazardous vegetation, if applicable (e.g., if there is a leak, the maintenance crew should try to perform temporary repairs/stoppage, or as advised by a geotechnical expert)
  7. Contact the HOA’s insurance carrier and tender claims as necessary (note that some HOA policies might have exclusions regarding earth movement/slope failure, but the HOA’s general counsel will be able to navigate those areas with the insurance representative)
  8. Involve the homeowners’ insurance carrier if they have property damage due to the slope movement/failure
  9. Prepare and have ready past HOA water irrigation reports, water invoices, landscape maintenance invoices…etc.
  10. Review the HOA’s budget and all/pending capital expenditures
  11. Consider winterizing the slopes if the slope movement/failure occurs before or during the rainy season

The following above is by no means an exhaustive list, but it is the bare minimum the Board should do in the event of a slope movement/failure.  After the HOA’s counsel and geotechnical expert have been consulted, there would usually be four (4) phases to go through before the slope is back to its original condition: (1) preliminary above-surface investigations (i.e., measurements of movement/failure, noting any damages, reviewing HOA records…etc.); (2) sub-surface invasive investigations (i.e., digging, collecting soil samples, lab analyzation…etc.); (3) drawing building/repair plans and obtaining city approval; and (4) rebuilding/repairing the slope.  The HOA should expect each phase to take a minimum of one (1) month if all parties—Board, homeowners, counsel, insurance carriers…etc.—cooperate.  However, if parties are uncooperative, the phases can be delayed by months if not a year or more.  Moreover, if there is slope movement/failure during the rainy season, the slope must be winterized (e.g., protected against further rainfall, water pooling) and rebuilding/repairs will likely not begin until the spring when the ground is a bit drier.

California HOA lawyers The Board must keep in mind that should the slope movement/failure be extreme, the costs associated with determining the cause and rectifying any damages will be vast (~ $300K if not more).  This is not taking into account any legal disputes between the parties as liability and responsibility for the slope movement/failure will not be clear until after phase 2 investigations.  Therefore, if HOAs have a slope movement/failure, it is best to contact general counsel immediately!

-Blog post authored by TLG Attorney, Vivian X. Tran, Esq.

*Asked & Answered

imageAsked Many owners in the community have requested that the board of directors consider removing an old, largely unused tennis court. We have three other tennis courts in the community and the space could be repurposed for a variety of other uses. Does the board have the authority to remove the tennis court?

Answered – Generally, not without membership approval. The membership pays dues for the maintenance, repair, and use of common area amenities. Many owners make their purchasing decisions in reliance on the available facilities a community has to offer. If the board unilaterally begins removing amenities without membership approval, there could be a risk of exposure to potential legal action. In addition, some associations have specific provisions in their governing documents that prohibit the elimination of common area amenities without membership approval.

That said, there can be limited situations where a board may have the authority to remove a common area amenity without a vote of the membership. Such situations may turn in part on the size of the amenity, whether it poses a hazard to the residents, and if the governing documents authorize such an action. However, disrepair alone generally cannot be the sole basis of a removal decision as the association usually has a duty to maintain common area amenities in good repair.

California HOA lawyers We recommend that associations and their boards proceed with caution when evaluating whether to remove a common area amenity. Counsel should be consulted to review the association’s governing documents to advise whether any specific provisions limit or restrict the board’s authority or require a vote of the membership for such actions.

-Blog post authored by TLG Attorney, Tim D. Klubnikin, Esq.

*Asked & Answered

hole_in_firewallAsked – Our HOA Board of Directors has become aware of a potential issue with the fire resistive construction in the walls between two condominium units. The Board is split on whether notice to the membership as a whole is warranted at this time, prior to the conclusion of the investigation, given that this potential issue affects a life safety system. Half of us feel that the issue is only technical in nature, while the other half believes that any potential issue should be communicated to the membership. We do not want to unnecessarily alarm the membership or incur thousands of dollars investigating the issue throughout the community if it is not significant, but at the same time we do not want to expose the Board or Association to a risk of liability.

AnsweredThe Board, as fiduciaries to the Association, is obligated to rely on subject matter experts in situations such as these. (Raven’s Cove Townhomes, Inc. v. Knuppe Development Co. (1981) 114 Cal.App.3d 783.) If the components in question fall within the scope of the Association’s repair responsibilities, the Association has a duty to retain experts to investigate the matter. Given the technical complexity of fire resistive construction systems, and the potential life safety implications, the Association should specifically ask their retained expert to evaluate and comment on whether membership notification of the issue is warranted at this time or whether further investigation is required. Often times, technical violations may exist that do not impair the overall performance of the system, but the Board should not rely on their own intuition or experience to make that determination. Such decisions can only be made after expert recommendations are provided and reviewed by the Board.

California HOA lawyers While a court will defer to a board’s discretion in its decision making, that deference will only apply if the board conducted a reasonable investigation and relied on the advice of experts. (Lamden v. La Jolla Shores Clubdominium Homeowners Association (1999) 21 Cal.4th 249.)

-Blog post authored by TLG Attorney, Tim D. Klubnikin, Esq.

*Asked & Answered

temporary-outdoor-fence-privacy-ides-rental-panels-bamboo-backyard_outdoor-patio-and-backyardAsked – Our association has two homeowners that have requested the association’s intervention to assist with resolving a dispute that has arose from damage to a shared wall. Should the Board get involved? Does the Association have any responsibility to cover the cost to repair the shared wall?

Answered – As a general matter, the Association is not obligated to intervene in this neighbor-to-neighbor dispute and is not responsible for covering the cost of the damage to the shared wall (“Party Wall”).

California Civil Code § 4775 provides the general allocation of maintenance responsibilities between associations and individual homeowners as follows, “unless otherwise provided in the declaration of a common interest development, the association is responsible for repairing, replacing, and maintaining the common area.” (Civ. Code § 4775(a)(1). Emphasis added.) The code further provides that “[u]nless otherwise provided in the declaration of a common interest development, the owner of each separate interest is responsible for repairing, replacing, and maintaining that separate interest.” (Id. at (a)(2). Emphasis added.)

In this situation, the damaged Party Wall is located between two private lots, not on the Association common area. As such, absent any provision in the association’s governing documents to the contrary, the association has no obligation to repair the Party Wall.

This point is further clarified by California Civil Code § 841(a), which states, in pertinent part: “[a]djoining landowners shall share equally in the responsibility for maintaining the boundaries and monuments between them.” Which, necessarily, would include the damaged Party Wall. This maintenance obligation extends to “reasonable costs of construction…or necessary replacement of the fence.” (Civ. Code § 841(b)(1).)

There may be circumstances where the Board of Directors (“Board”) may sympathize with the homeowners and want to intervene (eg. the damage to the Party Wall was no fault of the homeowners). While this feeling is valid and shows the Board’s virtues, the Board should remember that they are fiduciaries of the Association and must act in the best interests of the association as a whole.

The Board lacks the authority to expend association funds to repair the damaged Party Wall. The association levy’s and collects assessments from its owners for various reasons including among other things, promoting its members’ welfare, improving and maintaining association property, and discharging association obligations under their governing documents. However, covering the cost of the Party Wall, which is a separate interest, would be outside the scope of the association’s authority.

Thus, the association has no obligation or authority to intervene with this dispute and make the repairs to the damaged Party Wall. That burden lies solely with the homeowners.

California HOA lawyers In addition to the above, prudent associations adopt neighbor-to-neighbor dispute policies to offset many disputes that can likely be resolved with effort between the homeowners.

-Blog post authored by TLG Attorney, Corey L. Todd, Esq.

*Asked & Answered

Worker-Holding-Asbestos-174899441-56a4a1903df78cf7728353b4Asked Our HOA Board of Directors has recently decided to undertake some deferred maintenance projects which require wall renovations, such as re-piping the condominium buildings. Must the Association have an asbestos survey conducted prior to commencing the work?

Answered – Yes. The South Coast Air Quality Management District Rule 1403 (“Rule 1403”) requires a survey for the presence of Asbestos-Containing Materials (“ACM”) to be conducted and documented prior to the commencement of any renovation. (See SCAQMD Rule 1403(a).) Moreover, Rule 1403 makes it clear that a survey is required regardless of when the structure was built, the size of the renovations, and whether the owner of the structure is aware of the building materials. (See Rule 1403(d)(1)(A).)

Asbestos is a hazardous air pollutant under Section 112 of the federal Clean Air Act. (6 Environmental Law Practice Guide § 46.09 (2019).) Rule 1403 governs work practice requirements for asbestos in all renovation and demolition activities. The purpose of this rule is to protect the health and safety of the public by limiting dangerous emissions from the removal and association disturbance of Asbestos-Containing Materials (ACM). (See SCAQMD Advisory Notice). Due to the serious implications for exposing individuals to ACM, the survey requirement is mandatory with very limited exceptions.

Rule 1403 requires that the survey must be conducted by a Cal/OSHA-certified inspector or, as permitted by Cal/OSHA, an employee of the facility who possesses an unexpired AHERA Building Inspector certificate from a Cal/OSHA approved course. (See Rule 1403(d)(1)(iv).)

Given the serious health risks and liability associated with exposing HOA Members to ACM, HOA Boards should include asbestos surveys within the project budget and/or ensure that the surveys are included in any vendor contract.

California HOA lawyers Your city or county may require you to apply for a permit to conduct asbestos removal, renovation, or demolition. Contact your HOA attorney to conduct an in-depth analysis of your locality’s specific requirements.

-Blog post authored by TLG Attorney, Corey L. Todd, Esq.

*Asked & Answered

Contract-ReviewAsked Our HOA community manager always recommends that our vendor contracts be reviewed by our HOA attorneys before we sign them. Is this really necessary?

Answered – Yes! Contract review is an integral step to protect the HOA against future contract disputes. Oftentimes, HOA Boards of Directors don’t think twice about a contract until there is a dispute with the other party later on. By this point, it’s too late to negotiate contract terms, and the Board is often left to interpret and navigate poorly written and single-sided provisions that do not provide any support or protection to the HOA.

Contract disputes can be extremely costly and time-consuming. Since contract disputes and related expenses are unpredictable, they aren’t necessarily incorporated into the HOA’s annual budget; this can put a lot of financial strain on the HOA and could lead to special assessments on the membership to cover the costs. Furthermore, contract disputes can leave the HOA tied up with a vendor in which they’d rather part ways. This could leave the HOA without the ability to hire a new, better-qualified vendor to perform the job at hand.

Our HOA attorneys are skilled in the review, revision, and negotiation of contracts specific to HOA needs. Our attorneys can spot concerns that may not be obvious to a Board member, recommend alternative or additional language to provide HOA specific protections, and also communicate these concerns directly with the vendor. Additionally, our attorneys can identify whether the Board may be prohibited from entering the contract pursuant to the HOA’s governing documents. Combined, these efforts will result in a more comprehensive contract and more balanced protections for the HOA.

California HOA lawyers By taking the time up front to work with our expert attorneys, Board members can be assured that they are prudently adhering to their fiduciary duties and feel confident that they have taken appropriate measures to mitigate costly and time-consuming contract disputes in the future.

-Blog post authored by TLG Attorney, Joelle M. Bartkins, Esq.

plumbing-890x600*New Case Law

One of the primary purposes for which a homeowners’ association (“HOA”) is formed is to maintain and repair the HOA’s common areas, as well as any other areas designated within the HOA’s recorded Declaration of Covenants, Conditions and Restrictions (“CC&Rs”) (i.e., HOA Maintenance Areas). Faithfully executing the maintenance obligations under the CC&Rs is important to preserve property values and generally enhance the quality of life of all residents residing in the community. Failure to do so may expose the Association to liability.

For example, in the recent case of Sands v. Walnut Gardens Condominium Association, the California Appellate Court held the HOA could be responsible for damages sustained by a homeowner as a result of a plumbing leak originating from a pipe on the roof of the condominium building (i.e., HOA common area). ((2019) 35 Cal. App. 5th 174, 176.) In Sands, the HOA repaired the pipe and the roof, but did not compensate the homeowners for the damages they sustained to the interior of the unit and their personal property. The homeowners sued the HOA for breach of contract and negligence.

In addressing the former first (i.e., the breach of contract claim), the Court of Appeal noted that the HOA had a contractual obligation under the CC&Rs to maintain the common area in “a first-class condition.” (Id.) A jury could find that the HOA breached that contract by failing to perform preventative maintenance, and by failing to periodically inspect the pipes and roof. The Court dismissed the HOA’s argument “no evidence showed [that] the [HOA] was ‘on notice that it needed to make repairs or do something to the roof or the pipes.’” (Id.) Rather, it was sufficient that the HOA knew that no maintenance was being performed, which a jury could find as a breach of the CC&Rs’ requirement that the common area be maintained in a first-class condition.

However, as to the second cause of action for negligence, the Court sustained the trial court’s judgment of nonsuit (i.e., the homeowners failed to present sufficient evidence to conclude that the HOA was negligent). The Court noted that “the [HOA] had no independent duty as to the pipes and roof arising from tort law.” (Id. at p. 177.) In other words, absent a showing of a duty independent of the CC&Rs, an HOA cannot be held liable for the tort of negligence.

This case is important for several reasons. First, while the Rule of Judicial Deference generally requires courts to defer to maintenance decisions made by HOA boards even if a reasonable person would have acted differently in the same situation, the rule does not protect HOAs when they fail to perform any preventative maintenance and/or periodic inspections. Thus, a HOA should not wait until it receives maintenance requests and/or notice from homeowners concerning the need for common area repairs; rather, the Board should consult with experts and establish a preventative maintenance program addressing all common areas.

Second, there is no separate tort claim (e.g., negligence claim) for a HOA’s failure to maintain the common area. This is not to say, however, that a HOA will not be liable under a negligence theory for other reasons. For example, if a HOA voluntarily assumes a duty to protect residents from criminal activities and breaches that duty, the HOA may be held liable for negligence. (See Frances T. v. Village Green Owners Association (1986) 42 Cal. 3d 490.) The language contained in Frances T. also seems to suggest that a HOA may be found negligent for failing to maintain the common area which results in personal injuries. (Id. at p. 499.)

California HOA lawyers The case of Sands v. Walnut Gardens highlights the importance of properly executing maintenance obligations under the CC&Rs. While the Board is granted judicial deference in determining how the common areas are to be maintained, a HOA may be held liable for its failure to investigate maintenance problems and to take reasonable action. (See Affan v. Portofino Cove Homeowners Association (2010) 189 Cal. App. 4th 930 [the deference afforded to HOA Boards may not extend to situations where the Board fails to act or to investigate the scope of required maintenance or repairs].) HOA Boards should therefore consult with experts to establish and execute an appropriate common area maintenance plan.

-Blog post authored by TLG Attorney, Matthew T. Plaxton, Esq.

P9110024*New Legislation

Senate Bill 326 (“SB 326”) was recently enacted by the California Legislature and will take effect January 1, 2020. The bill accomplishes 3 main objectives: 1) it requires associations to conduct mandatory inspections for exterior elevated elements, such as decks, balconies, and walkways; 2) it invalidates and prohibits provisions in an association’s governing documents that restrict the board’s authority to initiate a legal proceeding against a developer for substandard construction; and 3) it requires an association to discuss with the membership the potential impacts of a construction defect action against the developer prior to the initiation of such an action.

Exterior Elevation Inspections

SB 326 introduces Civil Code Section 5551, which sets forth brand new requirements for associations with three or more multifamily dwelling units. For these associations, all exterior elevated elements that are supported in substantial part by wood or wood-based products, such as decks, balconies, stairways, and walkways, must be visually inspected every nine (9) years by a licensed structural engineer or architect (“Inspector”). The inspections are intended to determine whether the exterior elevated elements are in a generally safe condition and performing in accordance with applicable standards. These new requirements follow in the wake of a catastrophic balcony failure that resulted in a number of tragic deaths.

While the concept of visual inspections may sound fairly straightforward, the mechanics of the required inspections under Civil Code Section 5551 track unique and complex extrapolation protocols commonly employed in construction defect litigation. As a preliminary matter, not all elevated elements are required to be inspected. Rather, a statistician must be enlisted to prepare a randomized list of all the elevated elements qualifying for inspection (i.e. the total universe of those components that extend beyond the exterior walls of the building to deliver structural loads to the building from decks, balconies, stairways, walkways, and their railings, that have a walking surface elevated more than six feet above ground level, and that are supported in whole or in substantial part by wood or wood-based products). The randomized list must be prepared in such a way that the results of the inspections are representative of the project as a whole, within a margin of error of five (5) percent. This protocol allows for limited visual inspections (which will be a significant savings for the association), but provides confidence that those inspections are representative of the global onsite conditions.

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contractorportal_12columnOur industry depends on a close network of skilled industry professionals who are dependable and responsive.  Emergencies are common, particularly in condominium developments where breaks in shared or common water lines can lead to disaster.  Quick action by association vendors can extinguish the root cause of the emergency and potentially reduce, if not eliminate, thousands of dollars of damage.  Ideally, the vendor’s scope of work should be limited to those actions only; however, vendors occasionally wade into dangerous waters when they (albeit innocently) strike up conversations with residents about damage responsibility.  Do the following real-life examples sound familiar to you?

A plumbing invoice states:

“Service call.  Performed leak detection.  Source of leak found to be Owner responsibility.  Water line is leaking and needs to be replaced.”

A resident says the following to the association’s community manager, “Your roofer told me that the ceiling leak is the HOA’s responsibility.  Why shouldn’t I believe him?  Wasn’t he hired by the HOA?”

Community managers and board members routinely rely upon trained vendors to provide competent services in one of two (2) contexts: preventative maintenance and reactionary repairs.  As to the latter, reactionary repairs, which are usually of an emergent nature, may involve vendor entry into a separate interest and the presence of a concerned resident.  In that circumstance, residents have been known to question the vendor regarding loss responsibility.   Cornered, the vendor might feel obligated to provide an answer.  Vendor communication in that regard is rarely beneficial to the association – especially in those infrequent situations where the resident seeks to manipulate the dialogue to develop a potential legal claim.

When working at a residence, vendors should try to limit resident dialogue except as necessary to perform the work that they were hired to perform.  Why? Vendor opinions regarding fault or responsibility may not be correct.  Responsibility likely depends upon a review of the association’s governing documents, among other things.  Most vendors are not trained to analyze the responsibility allocations set forth in the association’s declaration; indeed, a responsibility allocation in one context may not necessarily be the same in another situation because governing documents usually differ.  Second, vendor statements can create public relations challenges for management and board members when they try to explain to an upset resident why the vendor’s in-field statements are not accurate.  Most significantly, vendor representations could potentially bind the association under a legal theory called ostensible agency.

Ostensible agency occurs when the principal (i.e. the HOA) intentionally, or by want of ordinary care, causes a third person (i.e. the resident) to believe another (i.e. the vendor) to be his agent who is not really employed by him (Civil Code Section 2300).  Under California law, a resident can argue that the vendor is an [ostensible] agent of the association by proving that the association carelessly created (by want of ordinary care) the impression that the vendor was an agent or employee of the association; and that the resident was harmed because he or she reasonably relied on his or belief (California Civil Jury Instruction 3709).

How do management professionals and board members avoid the possibility of binding statements by an unassuming vendor?  Exercising ordinary care by vendor education at the outset of the vendor relationship.  If possible, vendor agreements should include contract language which prohibits vendor communication (orally and in writing) with residents regarding responsibility after a loss.  Before repair work begins, vendor employees should be told that their role is limited to stopping the problem and, if warranted, developing a repair plan.  They should be reminded that they have been hired by the association, and as such, are obligated to report their factual findings only to the association; vendor invoices should not include responsibility or fault determinations.  Perhaps most importantly, vendors should be forewarned about the possibility of resident confrontation – and instructed to politely tell residents that their responsibility inquiries should be directed to management or the board for review.

California HOA lawyers Existing vendor and association relationships can be strengthened by a mutual understanding of the vendor’s expectations when interfacing with a resident.  It is critical that vendors and HOA leaders stay aligned so that potentially inaccurate in-field responsibility determinations do not become the basis of a future legal action involving the association.

-Blog post authored by TLG Attorney, Kumar S. Raja, Esq.

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