Construction Defects

A failure in a building or land and/or its components which could be caused by design, workmanship and construction errors and/or deficiencies in the materials used in construction which may or may not result in damages. The definition of a defect was further defined by the legislature when it enacted Civil Code Section 896 and 897 which is applicable to residential properties where the seller executed the purchase agreement on or after January 1, 2003.

Cigarette Smoke

Cigarette smoke is deemed a health hazard by various governmental agencies, and cigarette smoke that emanates from one area of association property to another constitutes a nuisance. Associations are increasingly taking steps, whether by CC&R amendment or rule adoption, to prohibit or restrict smoking in common areas, exclusive use areas and even inside units. The laws establishing smoke-free environments are evolving to support smoke-free condominium associations (at least in common areas).

Cost Plus Contracts

Cost Plus construction contracts call for the owner to pay the actual cost of the work plus a negotiated fee to the contractor, which fee may be either a fixed amount or some percentage of the contractor’s cost. Cost plus contracts are typically used on projects where the scope of work is not fully known or completed, or where certain facets of the work are uncertain. It is imperative that a cost plus contract clearly define all items to be included as costs. The cost plus contract with a guaranteed maximum price (“GMP”) is almost identical to the cost plus contract except that in the cost plus with a GMP, the contractor commits to complete the scope of work for an amount not to exceed the guaranteed maximum price, thereby shifting the risk of excess construction costs to the contractor.

Common Interest Development or “CID”

This is the generic term used to describe the types of developments that are subject to the Davis-Stirling Act, specifically condominium projects, planned developments, stock cooperatives and community apartment projects. This is defined in Civil Code section 4100. Requirements for establishing a common interest development are found in Civil Code section 4200, and there is a requirement that no common interest development can exist if it has no common area. (Civ. Code §4201)

Consumer Product Safety Commission

The CPSC (www.cpsc.gov) is the independent federal agency regulating the manufacture and sale of thousands of consumer products ranging from barbecue grills to deck chairs to swimming pools. It also collects information on potential hazards associated with consumer products and has the power to order the recall of products already being sold.

Civil Actions

A lawsuit brought in a court of law in which typically alleges that a  party, the plaintiff, has incurred a loss and/or seeks affirmative relief as a result of another party’s (the defendant) actions or inactions A civil action typically seeks monetary relief and/or  equitable relief.  Typical civil actions include breach of contract actions, negligence, breach of CC&Rs and statutory violations.

CC&Rs

A recorded document (generically referred to as the “declaration” of “conditions, covenants and restrictions” or “CC&Rs”) setting forth use restrictions governing the common interest development, making membership in the association, and payment of assessments, mandatory. “CC&Rs” may also refer to recorded amendments of the original CC&Rs. For CC&Rs first recorded after January 1, 1996, the declaration has to contain a legal description of the development, a statement identifying the development as one of four types of common interest developments, the name of the association, the use restrictions, and (occasionally) other statutorily-mandated items. Civ. Code §§4250, 4255.

Community Apartment Project

A community apartment project is one of the four types of CIDs that are considered common interest developments in Civil Code section 4100. This type of CID is unusual and quite rare. There are only a couple of them we have seen in La Jolla, although there are others elsewhere in California. They are often mislabeled “co-ops,” but they are different from stock cooperatives although they share some characteristics in common with both condominiums and stock cooperatives. In a typical community apartment project, an association owns no real property, but it is responsible for the operation and management of the development as in any other CID. The owners either have a percentage ownership or equal fractional ownership interest in the entire development, including the separate interests (i.e., apartments or interior airspaces). Owners do not own but rather have an exclusive right to occupy the unit. Some community apartment projects may not have separate CC&Rs but were created solely by covenants recorded in the original grant deeds to the first purchasers. See Civil Code section 4105.

Contact Information

Associations should ensure that there is always a point of contact for members to reach out and express concerns, report emergencies and request repairs. Including this information in your annual disclosures, as well as in assessment statements, ensures clear open lines of communication. That being said, the board is not required to be the point of contact for an association as that is typically the role of a manager.

Classes of Members

Membership classes are memberships that differ in their voting rights. They typically exist in developer-controlled associations and different and usually greater voting rights for developers than members in board elections and votes to amend the governing documents. Developers are typically entitled to three votes for each property owned until one of several triggering events occurs. Owners are typically called Class A members and developers are Class B members. When a specified triggering event happens, Class B members become Class A members with one-for-one voting rights. See Bureau of Real Estate (“BRE”) Reg. 2792.18. In master associations, there may be Class C members under which the developer is entitled to elect a majority of the board until a specified triggering event occurs. See BRE Reg. 2792.32.