Articles Posted in Maintenance

Our 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.

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.

In the recent case of Dynamex Operations West, Inc. v. Superior Court, the California Supreme Court set forth a new test that employers should utilize to determine whether their workers are appropriately classified as independent contractors or employees.  (Dynamex Operations West, Inc. v. Superior Court (2018) 4 Cal. 5th 903.)  The new test will likely have a significant impact on the obligations and liabilities of employers for matters involving payroll taxes, worker’s compensation insurance, IRS reporting, and minimum wage and overtime requirements. In light of the Dynamex decision, all California employers, like homeowners associations, should re-evaluate whether they have appropriately classified their third-party vendors as independent contractors.

The Supreme Court simplified the test that was previously used to classify workers.  Prior to the decision in Dynamex, a multi-factor test was utilized.  The principal factor was whether the employer had the right to control the manner and means in which work was performed.  However, the courts also considered several other secondary factors, such as whether the employer could discharge the worker at will; the level of skill required to perform the work; whether the employer supplied the tools and location to work; the length of time to be worked; the method of payment (whether by time or by job); whether the worker usually performed this type of work; and the subjective beliefs of both parties.  This “totality of the circumstances” test created a substantial amount of uncertainty among employers.

The new Dynamex test, referred to as the “ABC Test,” makes is easier for employers to determine in advance whether their workers should be classified as employees or independent contractors.  Although the new test is easier to utilize, employers will now find that it is more difficult to classify their workers as independent contractors.  The ABC Test begins with the presumption that all workers are employees.  To classify a worker as an independent contractor, the employer bears the burden of proving three elements.

First, the worker must be free from the employer’s control and direction, both in actuality and in contract.  This prong is essentially a restatement of the principal factor in the pre-Dynamex test, which requires genuine independent contractors to control the manner and means in which they perform their own work.

Second, the worker must perform work for the employer that is outside of the employer’s usual course of business.  For example, a homeowners association would likely be able to satisfy Part B, when dealing with workers hired to perform janitorial or landscaping services.  This is because homeowners associations are not in the janitorial or landscaping business; rather, homeowners associations are in the business of managing and maintaining Common Interest Developments.

Third, the worker must be customarily engaged in an independently established trade, occupation, or business of the same nature of work performed for the employer.  Using the example from above, a homeowners association could satisfy Part C of the test, if it could show that its janitor or landscaper provides the same janitorial or landscaping services for other homeowners association as well.  True independent contractors have their own business cards, a separate place of business, and their own book of clients.

It is important to note that the Supreme Court specifically limited its Dynamex holding to disputes involving Wage Orders issued by the Industrial Welfare Commission.  In order words, the case’s holding should only be applied to lawsuits that allege violations of Wage Orders (i.e., involving meal and rest breaks and overtime wages).  At this point, it is uncertain whether the new ABC Test will be applied to all other legal claims brought against employers.  Nonetheless, homeowners associations that routinely hire independent contractors should carefully re-evaluate their hiring procedures to ensure that their workers are properly classified under the ABC Test.

-Blog post authored by TLG Attorney, Sarah A. Kyriakedes, Esq.

*Asked & Answered

Asked – I’m receiving calls regarding swallows nests. Folks want them removed. Pest control is reminding everyone they are protected and removing is punishable by law. We are in high time for swallow activity! Is there anything our HOA can do to address this issue?

Answered – All swallows and their nests are fully protected under the “Migratory Bird Treaty Act of 1918” by state and federal regulations. It is illegal for any person to intentionally kill, injure, take, possess, transport, sell, or purchase them or their parts. It is illegal to intentionally destroy the nest, eggs or young of a swallow without a permit. If an adult swallow is occupying a half-built nest, or a fully built nest without eggs, then the law protects it. A permit is not required to remove swallow nests under construction that do not contain an adult, any new eggs or young, or nests abandoned after the breeding season. Permits to kill swallows or destroy swallow nests are only issued by the U.S. Fish and Wildlife Service, and only in very extreme cases. An example would be concerns for aircraft safety from a nesting colony at an airport. In most cases a permit for lethal control of swallows will not be issued for swallows nesting on a residence or other buildings and causing aesthetic damage.

The best strategy appears to be preventing nest building by “exclusion”, meaning methods that deny physical access to the nest site area. Exclusion represents a relatively permanent, long-term solution to the problem, and California does not require a permit for this method if it is done before the birds arrive, during nest building when there are no eggs or young in the nest or after the birds have left for the winter.

For methods of exclusion, please see the article “Living with Wildlife” published by the Washington Department of Fish & Wildlife.

-Blog post authored by TLG Attorney, Terri A Morris, Esq.

Once again the first of the year brings new legislation impacting common interest developments. The passage of Assembly Bill 2362 adds Civil Code section 4777 to the Davis Stirling Common Interest Development Act effective January 1, 2017.  The intent of this bill was to require the same written notification of pesticide application to separate interests and common areas of common interest developments by a non-licensed pest control operator (i.e., the association’s general landscaper) as residents would receive under the existing law for pesticide application by a licensed pest control operator.

You may recall in 2014 California Code of Regulations (CCR) Sections 6000 through 6619 were adopted to govern pesticides and pest control operations. Under Section 6618(b)(1) association vendors that perform pest control services are required to provide associations with certain information concerning the application of pesticides, and associations are required to distribute that information to their residents on a regular basis.

The new Civil Code section 4777 requires associations applying pesticides to a separate interest or the common area by an unlicensed pest control operator to notify the owner and tenant of the affected separate interest, and if the operator will be using a broadcast application (spreading pesticide over an area greater than two square feet) or using total release foggers or aerosol sprays, to notify the owner and tenants of adjacent separate interests that could reasonably be impacted by the pesticide use.  The notice must contain the pest(s) to be controlled, the name and brand of the pesticide product to be used, the date, time and frequency of application (stating that the date, time and frequency are subject to change), and a healthy and safety statement to be copied into the notice.  A copy of the written notice must also be attached to the minutes of the next association board meeting.

Where pesticides are to be applied to a separate interest, at least forty-eight (48) hours prior written notice must be given to the owner and tenant of the separate interest, along with any adjacent impacted owners and tenants.  For applications to the common area, notice must be posted in a conspicuous place near the area to be treated, if practicable, otherwise, individual notice must be given to the owner(s) and tenant(s) of the separate interests adjacent the common area to be treated.  Notice to tenants may be accomplished using first-class mail, personal delivery to a tenant at least 18 years old, or electronic delivery if the tenant has provided an electronic mailing address.

Section 4777 also provides helpful definitions for terms including pest, pesticide, licensed pest control operator, and broadcast application, and the statute authorizes owners and tenants to agree to immediate pesticide application when necessary.

Blog post authored by TLG attorney, Terri A. Morris.