Improve Operations, Increase Property Values and Strengthen Community Engagement
BY JOHN F. BAUMGARDNER, ESQ. – CHAPMAN & INTRIERI, LLP
A community’s character and property values can be directly related to the maintenance of an association’s common areas. Community upkeep can also impact an association’s membership level of satisfaction, either positively or negatively. To safeguard an association’s ability to effectively and efficiently conduct maintenance, it must tackle long-term, strategic planning related to its maintenance, repair, and replacement obligations. Effective longterm, strategic planning will identify and ensure compliance with an association’s obligations, engage the membership in decision making, and evaluate alternatives to current practices.
Identifying And Ensuring Compliance With Association Maintenance Obligations
An association’s maintenance obligations are often provided within the association’s governing documents. These obligations are generally established by the original builders of the property to designate common areas maintenance vs. separate interest maintenance. Depending on the type of community (i.e., condo vs. single family homes), the vast majority of these critical maintenance obligations may fall on either the association or individual homeowners. Although these documents cover most maintenance obligations, additional obligations can be found within the Davis Stirling Act (Civil Code § 4775) and product warranty information for manufactured products (i.e., windows, doors, appliances, HVAC systems).These homeowner and association maintenance obligations detail the minimum level of upkeep required to ensure specific building components last their expected life and that there are sufficient reserve funds to cover their replacement. The association can meet many of these obligations through community inspections which can be performed by managers or professional inspection companies. Additionally, performing these inspections based upon the association’s maintenance calendar, which identifies replacement timelines and maintenance requirements for major reserve items, allows an association to be proactive in managing its common area components. Using proactive inspections allows a community manager and association to detect failing/defective components, identify necessary repairs, and defer unnecessary maintenance. Inspections can also be used to distinguish common area damage caused by association property and damage caused by homeowners. These practical maintenance strategies help save managers and associations time and money.
Developing Proactive Planning Through Community Engagement
By using maintenance and long-term planning strategically, an association can tap into its membership’s creativity, knowledge and expertise. Throughout the planning process, an association can provide information to the membership related to its on-going and future maintenance obligations as well as possible cost-efficient alternatives. This information can be provided through town hall meetings and/or community notices. Using these tools, an association can provide its proposals and strategic plans to the membership while receiving direct feedback from the membership. If some members become fully engaged in the process, a board can appoint a special committee to examine the association’s maintenance protocol and long-term alternative practices or building components, subject to limitations in governing documents or statute. (e.g. Corp. Code § 7212.) If meeting participation or community engagement is minimal, an association can draft and distribute homeowner surveys to identify membership priorities related to the associations’ maintenance, repair, and replacement obligations. This permits members to provide their opinion without requiring their attendance at board meetings or participation in a special committee.
Developing Long-Term Proactive Maintenance Strategies
Based upon community feedback, the association can create a proactive maintenance strategy that reduces costs, introduces more efficient components and environmentally sustainable products. In order to develop its long-term maintenance strategy, the association must first determine the remaining useful life expectancy of its major components, which are generally listed within the reserve calculation. However, be aware that Civil Code § 5570 (B) (2) notes that “[c]omponents with an estimated remaining useful life of more than 30 years may be included in a study as a capital asset or disregarded from the reserve calculation . . .” If the association is responsible for a major building component that is disregarded from the reserve calculation, managers should similarly determine the remaining life expectancy and ensure that it is included on future reserve calculations once the life expectancy falls below 30 years. Following the determination of remaining useful life expectancy, the association can begin to evaluate varying replacements to maximize efficiency. Building components which can provide savings for the association include energy efficient mechanical and heating equipment, low-e glass/ windows, LED lights, drip irrigation vs. sprinklers, use of solar panels, and drought tolerant, native plants. When replacing major components, an association should also consider alternatives that provide longer life expectancy. Some examples include using cementitious siding and trim products instead of wood and tile roofing instead of composite shingles. A thorough evaluation of these components can be performed by a manager, association, or member committee through properly licensed vendors and contractors. These requests for information or proposals allow an association to proactively tap into the extensive knowledge and expertise of the prospective vendors. These proactive steps will also ensure that an association’s reserve budgets properly consider the true cost of replacing major components. If these steps are taken too late, an association may not be able to commit to its strategic goals due to unexpected costs, necessity of emergency action, or simply by lacking the knowledge of alternative products.
Lastly, if major components are failing unexpectedly within 10 years of construction, it may be necessary for the board to retain a licensed contractor to investigate the cause of the failure. If the component is defective, a claim under the Right to Repair Act (SB800) may be necessary to recover funds to compensate the association for any repairs and damages.
ABOUT THE AUTHOR
John F. Baumgardner, Esq. is an attorney with the law firm
Chapman & Intrieri, LLP located in Roseville. He specializes in
CID and Civil Litigation and has been serving the community
association industry for the past 4 years.
Chapman & Intrieri, LLP is a proud member of @CACMchat and contributor to The Law Journal which is mailed out to all members quarterly. In the issue just released, be sure to check out the the article entitled, “Improve Operations, Increase Property Values and Strengthen Community Engagement” written by John F. Baumgardner, Esq. Not a member of CACM as of yet? We invite you to join at www.cacm.org.