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Tips for Hiring a Professional

Helpful Tips to Remember When Hiring A Professional

Does your community need to hire a professional company to do maintenance, repair, or any other work to the common areas? Here are some helpful tips when looking into hiring a professional from a community association manager or board’s perspective.

  • Does This Professional Have A License?

Associations should always hire a licensed professional versus an unlicensed professional. The Department of Consumer Affairs Contractors State License Board has more on why hiring a licensed contractor is important and how to check a contractor’s license status here.

  • Get Multiple Bids.

The old saying “you get what you pay for” rings true here. Sometimes the cheapest bid is not always best for your association, even if the budget is low. While it may be tough and time consuming to get multiple bids, this effort upfront may help you on the back end if you need to fix the project or, worst case, litigate an issue. It is recommended that association’s make a reasonable effort to get at least 3 bids from different professionals in order to get an idea how much the project will cost on average.

  • Ask for References.

If your community needs professional services, hopefully the company has done similar work before. Don’t hesitate to ask for recent references from projects and/or communities similar to yours so you can talk to other managers or board members about their experience with the company in both quality of the work and experience with the personnel.

  • Obtain A Written Contract.

While oral contracts are sometimes enforceable, it is our recommendation to always obtain a written contract when contracting for services. It is very hard to prove the existence of an oral contract in a court of law and memories fade over time. Additionally, a bid or proposal, even when signed, doesn’t always contain the necessary terms and conditions a contract may require. After a written bid or proposal is obtained, make sure a signed, written contract is also obtained. The party drafting the contract typically writes the terms most favorable to them, so we highly recommend associations have their legal counsel review or draft any contracts. Attorney review may cost more money upfront, but can save you thousands if a claim is made later on. For more information on this topic, see Epsten’s Contracting Checklist here.

  • Set Expectations Up Front.

As tedious and boring as reading a contract may be, it is imperative that both parties understand what is expected of them beforehand. If, when reading the scope of the project provided by your professional, there is a discrepancy or vague term you don’t understand, make sure to ask for clarification. Both sides need to be clear on what is expected of them before any work begins or money is exchanged. Unless your legal counsel has been involved in all negotiations or discussions regarding the project, the board and management may be in a far better position to review the scope of work and ensure it includes everything discussed, agreed upon and expected.  Your legal counsel may not be in a position to make any representations regarding the proposed scope of work if they were not included in those negotiations. As noted above, legal counsel should review or draft contracts but will likely need input from other professionals on the scope of the work.

  • Does This Professional Have Insurance?

A written contract between an association and its professional should specify the necessary insurance that the professional is expected to maintain, and provide proof of upon request, while performing work on behalf of the association. Please also note that a certificate of insurance may not always be sufficient to ensure the association and management have been added as an additional insured once a contract has been executed. Make sure to ask your professional for a certificate of insurance and a blanket insured endorsement form before you accept any proposals. Consult with your association’s insurance professional about adequate insurance requirements or proof of insurance.  It is important that both parties are protected from any liability that may occur while workers are on your property and that the common areas are protected from damage, should any occur. Worker’s compensation is also important for professionals to have, should they need it. This tip includes all professionals, including, for example, architects.

  • Are Permits Needed for The Project?

Depending on the governmental jurisdiction, permits may be required for your project. Consult with your licensed professional and make sure the contract is clear on who will be requesting and paying for permits, if permits are required. Inspections are typically needed to obtain permits, so make sure to factor in the time it will take to get your local permitting officials on scene to do any inspection.

  • Keep All Documents and Communication with Your Hired Professional.

When dealing with a project, large or small, it is recommended that the association keep all documents, communications (emails, faxes, etc.) from the hired professional. While a fully executed written contract is an association’s best line of defense if a dispute arises later on, having documents to support any discussions and advice during the process of work can also be extremely beneficial. Sometimes disputes come up months or even years later. It is also recommended to take photos before, during, and after the project is completed as well.

  • Communication with Members is Key

Once a project begins, be sure to update your members periodically. Delays, changes, and other deviations from the original plans and timelines tend to happen when projects begin. Members will appreciate any updates about how the project is progressing over time.

“No Lifeguard on Duty” Signs: Discriminatory?

Published February 21, 2023

 

Like many Californians, you may be so used to seeing “No Lifeguard on Duty” and “Caution” signs posted around public pools and spas that you just glance at the verbiage and do not give it a second thought.   Like public pools and spas, common interest developments (CIDs) with pools and/or spas are required to post “No Lifeguard” and “Caution” signs pursuant to Sections  3120B.4 and 3120B.7 of the California Code of Regulations. The same is required for all other public pools and spas.

What CIDs may not be aware of is the sign verbiage required by Cal. Code Regs. Section 3120B.4 and 3120B.7 just a couple of years ago likely violated fair housing laws.  CIDs were therefore stuck between their obligations to post the required pool/spa sign verbiage and avoid enforcing discriminatory rules; however, a 2019 update to Cal. Code Regs. Section 3120B.4 and 3120B (effective January 1, 2020) removed the discriminatory components.

Now, CIDs must not only change the sign verbiage accordingly, but they should also review their Pool and Spa Rules to ensure the language is not discriminatory.

Change in Required Sign Verbiage

Prior to the 2019 update, Cal. Code Regs. § 3120B.4 required “No Lifeguard” signs to state “NO LIFEGUARD ON DUTY” in addition to ”Children under the age of 14 shall not use pool without a parent or adult guardian in attendance”.  However, a US Discrict Court in California found that such restrictions discriminated against families wih children (protected by federal and state  fair housing laws), in that it treated families with children differently and less favorably than adult-only households.  (See United States v. Plaza Mobile Estates (2003).)  After the 2019 update, the required verbiage changed to “NO LIFEGUARD ON DUTY” followed by “Children should not use pool without adult supervision”.  Similarly, the “Caution” sign verbiage for spas changed from “Unsupervised use by children under the age of 14 is prohibited” to “Children should not use spa without adult supervision.”  (See Cal. Code Regs. § 3120B.7 for additional required verbiage.)  The amendments to both provisions removed reference to a specific age and altered the prohibitory language to mere suggestions.

What Should Your Community Do?

  1. CIDs with pools and/or spas should update their “No Lifeguard on Duty” and “Caution” signs to reflect the current, non-discriminatory language in Code Regs. §§ 3120B.4 and 3120B.7.
  2. In addition, they should review their Pool and Spa Rules to ensure they do not treat families with children more harshly than adult-only households.

PRACTICE TIP:  Avoid any reference to specific ages or familial dynamics in your CID’s  Pool and Spa Rules.

Although restrictive Pool and Spa Rules may be well intentioned, any such discriminatory language would only be acceptable if the CID could successfully articulate a compelling business necessity and the language is “the least restrictive means to achieve that end”.   (Fair Housing Council v. Ayres, 855 F. Supp. 315, 318-19 (C.D.Cal.1994).

Do you have questions regarding your Pool or Spa  Rules? Our firm is happy to review or draft a new set of rules for your community.  Please contact us.

 

What Duties Does an Association Have to Maintain Video Recordings?

Victor Valley Union High School District v. Superior Court (2022) 86 Cal. App. 5th 940.

What Duties Does an Association Have to Maintain Video Recordings?

By Joseph A. Sammartino, Esq.

 

Technology is advancing at an ever-increasing pace.  The cellphones in our pockets are not just phones, — they­­  take pictures, send email and text messages, provide GPS navigation, play music, run hundreds of apps that do almost everything, and they have better higher resolution video capability than movie studios had in the 1990s.  As technology improved and shrunk (and became much less expensive), video cameras for security surveillance have become so commonplace that most people do not notice them and go about their daily lives as if the cameras were not there.  But what happens when one of those cameras – in one of our communities – records activity that leads to an inquiry that does not get resolved which turns into a dispute and ultimately becomes a lawsuit?  What duties does an association have to maintain those video recordings or face possible sanctions under the Code of Civil Procedure for spoliation of evidence?

On December 22, 2022, the Fourth District Court of Appeal issued its opinion in the case of Victor Valley Union High School District v. Superior Court (Doe).  The court, in a different context, set forth the most current guidance on maintaining video recordings and other potential evidence.  The facts of the Victor Valley case are tragic and hopefully extraordinarily rare: two male high school students took a third male student, who was unsupervised, but who typically had full-time adult supervision both in and out of the classroom, from the cafeteria into a bathroom where they sexually assaulted him.  The school had video cameras in the cafeteria, and the assistant principal and a security officer reviewed the footage from the cafeteria cameras from a three-day period.  The third day of video included the recording of the two students taking the third student from the lunch table toward the locked bathroom.  Fourteen days later, because no one took any steps to preserve the video because each thought the other was saving it, the video was recorded over and lost forever.

Importantly, the court set forth the rules clearly and concisely: the safe-harbor provision of the California Code of Civil Procedure section 2023.030, subdivision (f), “shields a party from sanctions for the spoliation [meaning the loss or destruction] of electronic evidence only if the evidence was altered or destroyed when the party was not under a duty to preserve the evidence, and the duty to preserve relevant evidence is triggered when the party is objectively on notice that litigation is reasonably foreseeable, meaning litigation is probable and likely to arise from an incident or dispute and not a mere possibility.”

While the court’s words are clear, they leave an important practical question unanswered: when is litigation likely to arise from an incident or dispute and instead of being a mere possibility?  That is a question that could be argued and debated before courts for decades without a clear, simple answer.  From a lawyer to a client, the simplest and best answer to that question is the age-old advice: better safe than sorry.  If there is video footage (or other evidence) that relates to any incident, issue, or dispute, it would be much better to take the steps necessary to preserve that evidence until final resolution is reached rather than to take the chance that an appellate court might decide years later that litigation was likely to arise and, therefore, to impose monetary sanctions against an association for destroying evidence that should have been preserved.

 

Formation and Use of Executive Committees

 

By Karyn A. Larko, Esq. 

A committee is a group of persons appointed by an association’s board of directors to perform a specific task or tasks.

The scope of authority of a committee is largely dependent on its composition. A committee composed solely or partially of persons other than board members is generally tasked with advising the board on specific matters or exercising powers granted to that committee by the governing documents (e.g., some architectural review committees (“ARCs”).

Conversely, executive committees (“ECs”) are composed of two or more current directors and only current directors in accordance with California Corporations Code § 7212. ECs are given decision-making power that would otherwise be exercised by the board. An example of an EC is a litigation committee comprised solely of directors, established to communicate with the association’s legal counsel and make decisions pertaining to a lawsuit. Another example is an ARC comprised solely of directors tasked with exercising the board’s authority under the governing documents to approve or reject architectural applications.

Forming an EC

An EC should be formed when a board needs to delegate tasks for which it is responsible. This need may arise when a board is dealing with a complex, time-consuming matter that is ongoing and necessitates attention between board meetings. This need also exists when a dispute exists between a director and the association. In the latter example, the interested director (i.e., the director whose interests are contrary to the association’s interests) should not serve on the EC due to their conflicting interests.

California Civil Code § 5350 requires directors to recuse themselves from voting on certain matters. In some instances, it may also be prudent to form an EC to address these matters.

ECs should not be formed to exclude a director from generally participating in board discussions and votes. However, if a director is jeopardizing the interests of the association by, for example, revealing confidential or privileged information to others, it may be appropriate to form an EC to exclude that director from meetings whereat the Board discusses matters that, if made public, might expose the association to liability or disadvantage the association in a dispute. Your boards should consult with their association’s legal counsel before forming an EC for this purpose as taking this action can also create legal issues for the association.

Why Form an EC?

There are benefits to having ECs. An EC comprised of directors willing and able to volunteer more time to the association can address complex, time-consuming matters more quickly than the entire Board. Additionally, since an EC has fewer members, scheduling meetings and coming to a collective decision on matters is often easier. Finally, if less than a quorum of directors serves on an EC, the EC meetings are not subject to the Open Meetings Act (i.e., the meetings are not subject to the same notice and agenda requirements as board meetings).

In the event of a dispute involving a director, especially a dispute that could lead to litigation, there are important additional benefits to establishing an EC of disinterested directors (i.e., directors not adverse to the association in the matter) to handle the dispute. By establishing the EC, the board can prevent the interested director from obtaining privileged or confidential communications and documents related to the matter (e.g. correspondence between the EC and the association’s legal counsel, expert findings), thereby better protecting the association’s attorney-client privilege and its interests. The board can also avoid the appearance of impropriety and better protect the association and directors individually against potential liability.

In order to preserve the association’s attorney-client privilege, however, all EC meetings pertaining to the director dispute must be held in executive session and all legal guidance, EC discussions, meeting minutes and other documents and information related to the dispute cannot be disclosed to persons outside of the EC, including other directors.

Forming an EC

Have your boards review their governing documents prior to establishing an EC. The governing documents may already establish the EC, grant the board committee-making authority or, conversely, limit the board’s committee-making authority, as well as impose requirements on how ECs are formed or who may serve on them.

Unless otherwise provided for in the governing documents, ECs may be formed by a resolution or charter adopted by a quorum of the board pursuant to Corporations Code § 7212. A resolution is an official expression of the opinion or will of the board that includes the reasons for that opinion or will. A charter is a founding document that is typically more detailed than a resolution and outlines the EC’s responsibilities and authority.

When forming an EC, your boards should consider: 1) whether any directors have conflicts of interest that disqualify them from appointment or perceived conflicts that make appointment unwise; 2) whether certain directors have knowledge and experience that would benefit the EC; 3) the time commitment needed to serve on the EC; 4) whether the governing documents dictate which directors serve on the EC (e.g. based on the offices they hold); 5) whether California law dictates the composition of the EC (e.g. Civil Code § 5501 requires the treasurer to serve on an EC that reviews the association’s financials); and 6) the willingness of directors to serve on the EC.

The board should also keep in mind that if the EC is composed of a majority of the board, the same notice and agenda requirements for board meetings will apply to EC meetings. Having said this, the authority of an EC composed of a quorum of the Board is less likely to be challenged. Thus, ECs established to handle controversial matters should generally include a quorum of the board.

 

Multiple Choice Questions (correct answers in bold)

An executive committee may be composed of two or more:

a) current and former directors.

b) current directors and general members.

c) current directors and non-member experts on the matter.

d) current directors only.

 

Which of the following is not an appropriate reason for a board to form an executive committee?

a) a complex, time-consuming matter has arisen for the association

b) a majority of directors do not like the personality of another director

c) a dispute exists between a director and the association

d) the governing documents have granted the Board the authority to do so

 

Which of the following statements pertaining to executive committees is accurate?

a) An executive committee must be formed by a quorum of the board, and all executive committee meetings must be properly noticed pursuant to the Open Meetings Act.

b) An executive committee may be formed by a quorum of the board, in which case the executive committee meetings must be properly noticed pursuant to the Open Meetings Act.

c) An executive committee may be formed by a quorum of the board, but, in either case, notice of executive committee meetings should not be provided to the membership.

d) An executive committee may not be formed by a quorum of the board, and notice of executive committee meetings should not be provided to the membership.

 

 

*This article was originally published in The Law Journal Winter, 2022 and was adapted from the original article, Formation and Use of Executive Committees, as authored by Karyn A. Larko, Esq.

 

The New Normal

 

By Rhonda R. Goldblatt, Esq.

We are now entering the third year of the COVID-19 pandemic. Summertime Is approaching, and with the new season comes questions regarding how associations should manage their common area recreational facilities during the current phase of the pandemic.

Governor Newsom declared a State of Emergency on March 4, 2020, quickly followed by a Stay at Home Order on March 19, 2020. The State of California and local municipalities began Issuing COVID-19 regulations soon after, including regulations, restricting gatherings, mandating mask-wearing, limiting the use of pools, gyms, and playgrounds, setting forth cleaning protocols, and more. These regulations often arrived and changed at rapid-fire pace. Association managers, like many Californians across a wide swath of Industries, struggled to keep up with the changes.

The COVID-19 regulations in place during the last two summers provided some sense of structure (albeit and often onerous and confusing one) as associations were required to follow the law. What other option was there?

Now, many COVID-19 regulations have been rolled back, but California’s State of Emergency remains in place. The pandemic, unfortunately continues, mutating into different strains that dominate the news and bring more uncertainty. We have not entirely returned to a pre-COVlD world, as much as we wish to do so. So how, to approach the upcoming summer?

Associations may consider doing the following:

Defer to the law. New governmental restrictions, such as mask mandates, may come into place in the event of new surges. Associations can consider adopting rules that mirror existing governmental restrictions verbatim in order to bolster the reasonableness of those rules. Or, associations can simply refer residents to the governmental regulations for a more hands-off approach.

Address clashes. At least anecdotally, it seems that confrontations are on the rise as Americans enter the third year of a difficult, stressful pandemic. Associations should Investigate and appropriately address any governing document violations, including nuisances, harassment violations, or hostile environment harassment based on a protected status.

Clean smarter. Hopefully, the longer the pandemic goes on, the more we learn about how COVID-19 and its mutations spread. Associations should rely on their cleaning and janitorial professionals regarding best practices for maintaining common area facilities in as reasonably safe a condition as possible.

Continue to rely on experts. Associations can and should continue to rely on qualified experts like cleaning professionals, legal counsel, and Insurance representatives to minimize the associations’ liability, Including with regard to managing the common area and holding meetings and events.

With these steps, associations can ready themselves for the upcoming summer, as we settle into the “new normal” of the post-shutdown world.

 

 

 

* This article was originally published in CAI San Diego  Community Insider  Magazine in the Summer  2022 edition and was adapted from the original article, The New Normal as authored by Rhonda R. Goldblatt, Esq.

Use of Association Technology by Members

By Rhonda R. Goldblatt, Esq.

 

  • Does your community have a media room?
  • Does your community offer computers for use by residents?

If so, this article is for you! Stay safe and ensure your community has a record of who is using association technology and how.

Logging into Association-Owned Devices

Some community associations allow residents to access the internet on association-owned devices, such as tablets or computers located in a community clubhouse or business center. However, it is important for such associations to consider implementing safeguards to keep residents accountable for their online activity and restricting accessing to certain websites and content, or in some unusual cases completely restricting access to the internet.

One method of monitoring and restricting access is requiring each resident to log in to association-owned devices using a unique, association-assigned username and password. This will make it easier for the association to track the activity of each resident, if needed. The association may also want to consider blocking specific residents from using its devices at all. For example, certain residents may be barred from accessing the internet as a result of prior criminal activities.

Our firm is not an expert in cybersecurity or information technology (“IT”). Therefore, we recommend consulting with a qualified expert regarding securing an association’s devices, implementing resident log-in requirements, restricting access to undesirable websites, etc. We also recommend consulting with association counsel regarding the type of digital safeguards each community is authorized to implement.

Finally, associations may want to consult with their insurance broker and legal counsel to ensure they’re adequately protected from potential liability in connection with a homeowner’s misuse of an association-owned device.

Here’s to (safely) surfing the Web!

Use of Timers to Stay on Schedule During Board Meetings

One of the key components to running an efficient board meeting is to start on time and end on time. Easy enough, right? Well, we know that is not always the case.

Although most of us are meeting experts, the one challenge many of us face is when discussion goes on too long. Whether it’s discussion on an agenda item, homeowner forum or otherwise – it is difficult to interrupt someone when they are passionate about their topic and wont allow you or anyone else to get a word in edgewise.

So, here is an age-old pro-tip, with a techy twist… Use a (web) TIMER!

Meeting virtually? Even better! Open your web browser, search “Google Timer,” (or any other web browser you like), enter your time limit for the discussion at hand, click on the full-screen icon and share your screen via the virtual meeting platform.

As long as you notify your participants in advance that timers will be used to stay on schedule, you are golden. When the timer goes off their time is up.

If the meeting is virtual and they continue to speak, give them a courtesy 5 seconds and then take advantage of the “mute” audio feature.

You’re welcome. We are always here to help!
– Epsten, APC

Potential Liability for Non-Employee COVID-19 Infections: See’s Candies, Inc. v. Superior Court

Employers may be held liable for COVID-19 (“COVID”) infections of non-employees, as evidenced by a recent California Court of Appeal decision.

In the recent case of See’s Candies, Inc. v. Superior Court, (Dec. 21, 2021, No. B312241) [2021 Cal. App. LEXIS 1076], the California Court of Appeal, Second District, found that an employer that has not taken adequate measures to prevent the spread of COVID in the workplace may be held liable if an employee contracts COVID at work and spreads it to a third-party, such as a spouse, if the third-party suffers a resulting injury. The court did not resolve the extent to which the employer’s duty of care reaches, however.

In See’s Candies, Matilde Elk caught COVID in March 2020 from working in close proximity to others on a packing line for her employer, Elk quarantined in her home, where her husband resided. Her husband subsequently caught COVID and died a month later.

Elk and her daughters sought wrongful death damages, including for loss of love and care. Elk claimed her husband’s death results from her employer’s failure to implement adequate safety measures, such as social distancing in the packing line room and restrooms.

Under the California Worker’s Compensation Act, Labor Code §§ 3200-6002, an employer’s liability for an employee’s workplace injury is generally limited to worker’s compensation. California courts had long established that this restriction on workplace injury remedies also applies to injuries collateral to or derivative of a workplace injury. See’s Candies argued that this rule, known as the “derivative injury doctrine,” should therefore limit its remedies to Ms. Elk’s family members to worker’s compensation, rather than open the door to widespread civil liability and remedies.

The court disagreed with See’s Candies. The court paralleled the circumstances in this case to a 1997 California Supreme Court Case, Snyder v. Michael’s Stores, Inc. (16 Cal. 4th 991) in which a minor with cerebral palsy and other disabling conditions claimed such conditions were a resulting injury of her exposure to toxic levels of carbon monoxide while in utero. This exposure occurred because her mother, while pregnant, was working as an employee at Michael’s when an incident involving carbon monoxide occurred. The Court found that the derivative injury doctrine did not remove the company’s civil liability to the baby because the harm to the baby was not dependent on, or derivative of, the harm to the mother. Rather, the harm to the baby was a result of her own exposure to carbon monoxide as a fetus.

In See’s Candies, the appellate court held that the derivative injury doctrine only applies when the third-party’s injury is derivative of the employee’s injury in the purest sense, meaning the injury to the third-party would not have happened in the absence of the injury to the employee. The court explained that, like the mother in Snyder, Elk merely served as a conduit of a pathogen and whether she had been harmed by the pathogen itself was irrelevant to the claims of her family members.

What Does this Mean for Your Association?
This case serves as a reminder that the best way your Association can protect itself from COVID liability is to follow the applicable governmental orders designed to help prevent the spread of COVID. As we all know, these orders change from time to time.

If you have any questions regarding the current orders or how to implement them, please contact us. We are here to help!

Governor Newsom Expands Drought Emergency Statewide

On October 19, 2021, California Governor Gavin Newsom declared a drought emergency statewide authorizing the ban of wasteful water use and boosting conservation efforts.

California residential community associations should refer to Civil Code sections 4735(c) and (e) and 4736(a) which are triggered by the Governor declaring a state of emergency due to drought. Those sections provide as follows:

Civil Code §4735 (c):

  • “…an association, shall not impose a fine or assessment against an owner of a separate interest for reducing or eliminating the watering of vegetation or lawns during any period… [during which] …The Governor has declared a state of emergency due to drought…”

Civil Code §4735 (e):

  • “An owner of a separate interest upon which water-efficient landscaping measures have been installed in response to a declaration of a state of emergency described in subdivision (c) shall not be required to reverse or remove the water-efficient landscaping measures upon the conclusion of the state of emergency.”

Civil Code §4736 (a):

  • “A provision of the governing documents shall be void and unenforceable if it requires pressure washing the exterior of a separate interest and any exclusive use common area appurtenant to the separate interest during a state or local government declared drought emergency.”

Please contact us or your association’s legal counsel should your community have any questions regarding compliance with the Civil Code during a statewide drought emergency.

Helpful Suggestions to Avoid Construction Contracting Mistakes

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* Originally Published in the CAI-CV April, 2021 Edition of Quorum Magazine

By Jon H. Epsten, Esq. CCAL
Founding Member and Co-Managing Shareholder at Epsten, APC

I have been fortunate to represent common interest developments for close to thirty-eight years.  At the onset of my career I became involved in assisting associations with contracting for repairs, including major renovations and many post litigation reconstruction projects in the millions of dollars.  The basic rules of contracting for this type of work have not changed much over the years. What has changed is the complexity of the work and the insurance issues.

Our cottage industry has expanded over the years from cookie cutter “stick-built” homes constructed over hundreds of acres to much smaller foot prints and to more vertical construction with complex and ever-changing construction methodologies integrated with construction materials that oftentimes equally complex to install and repair.

To assist community managers and boards of directors through the contracting process I have put together some issues for the Board to consider which address problems I have encountered over the years. These issues are not exhaustive but touch upon the obvious issues which are often over-looked and can result in even a simple project failing.  Not every project will go well no matter how much work is put into the selection of the contractor. The goal is to minimize risk and when things aren’t going well have a good exit strategy or resolution process in the construction contract.

Here is an analogy. I grew up working on boats in San Diego. I learned that the process of painting a boat is a monumental task. But, it’s not spraying the paint on the hull that is difficult, rather it is preparing the hull for the paint that takes the most work.  Planning and preparation for your construction project is the difficult part of the project not necessarily the actual work being performed.

One of the most common mistakes is not defining the scope of work in enough detail. The absolute key to a good contract is a solid definition of the scope of work. By way of example, it is prudent to have an arborist define the scope of tree trimming while it may be prudent to have an architect define the scope of a roof repair or replacement.  Attorneys do not define scopes of work. The scope should be defined by the professional in the discipline. For you do-it-yourselfers there are resources on the web that contain plans and specifications for work (e.g. asphalt paving, painting, landscaping and irrigation). No matter what methodology you undertake to arrive at the scope of work you must always have a clearly defined scope of work in the contract.

I recently had a contractor argue successfully that their scope did not include painting the siding after the siding installation. He understood when bidding that the association was painting the siding. He referred back to the scope of work and while not specifically excluded, painting was not specified in the contract. Spend time understanding the scope, read and re-read the scope and incorporate all the scope documents (plans and specifications) into the contract and consider incorporating illustrative diagrams or photographs into the scope that show the site conditions. The scope needs to clearly define what is being repaired, the locations, the means and methods of repair and the material specifications, including warranties.

A very basic and old school approach to contracting is to interview contractors prior to selecting a contractor to perform work. This basic rule can bring out a lot of issues and calm nervous board members concerns.  That said, interview with a purpose. Just recently, I suggested to a board they interview a plumbing contractor.  I was not asked to attend. I called the manager the next day and asked how the interview went and she replied, the board only had two questions and they weren’t even sure what to ask. Take interviewing the contractor seriously.

  • A list of questions should be developed so you are always comparing apples to apples when interviewing a contractor for the job.
  • Check out their references.
  • Speak to other association boards of directors of similar sized communities the contractor has performed similar work for in the past.

I have found that a board interviewing contractors and taking the time to speak to other communities who used the same contractor(s) yields good information to make informed decisions. Do not just speak with the associations on the contractor’s reference list. They have typically been chosen because they will give the contractor a glowing review. Use your industry contacts to see if there are other projects not on the contractor’s list and get their input too. For example, when a problem arose on the project did the contractor deny responsibility or did it acknowledge the issue and work with the association to find a solution.

Many of us have to visually observe things to understand them. For me, it is no different with construction. By way of example, I need to see the paint colors, how the flashing will lay up against the fascia, and how the new windows compare to the windows that remain in place. I encourage my clients when possible, to have the contractor perform prototype repairs or illustrative mock-ups. Mock-ups and prototype repairs allow the board to better understand the work, adjust the work prior to formally committing to it and use the prototype or mock-up to explain the work to the owners or other contractors who may have to integrate their work with others.

Prior to starting work it is important to communicate with the owners and residents about what they can expect. Ideally, the contractor will assign a liaison to assist management and the board with communications with the residents and owners.  Good communication leads to a successful project. Regular communications between the contractor and the board is also important. Consider inviting the contractor to your regular board meetings to answer owners’ questions and address the board on the progress of the work.

Your Community Association Manager is your consultant, but do not assume the manager has the time and/or expertise to handle a construction project. These projects can be time consuming and can take away from day to day association issues that need to be addressed. Always discuss with your manager their role in any construction project; set expectations early. It is possible you may need to hire a third party to administer the work. If the management of the work is being delegated to a committee make sure the members are knowledgeable in construction or willing to learn about the work to be performed – don’t take the first volunteer who raises their hand.

I am often asked, does an attorney need to review the construction contract? Answering, yes, appears self-serving, but in fact oftentimes these contracts are fraught with poison pills such as antiquated insurance provisions, indemnity language and limitation of liability provisions. Those provisions need to be reviewed by counsel and understood by the board. Another key consultant is your association’s insurance agent. Make sure your agent reviews the insurance provisions in the construction contract.

It’s difficult for me to conclude this article when I have so much more to say! Let me leave you with some closing thoughts.

  • Take the time you need to get the contract that gets the work done properly.
  • Don’t overly complicate or delay the process.
  • Use professionals, and board members remember, what you may do if you were the contracting party is not necessarily what the association should do (e.g. offering cash incentives to a contractor).
  • And lastly, always keep in mind that price variances in bids are a signal that bidders may not be bidding the same scope.