BY WENDY BENNER
HOAs should retain forensic experts to vi- sually inspect the property, perform infra- red testing, and if necessary, some degree of destructive testing. It’s a lot easier to fix problems if you catch them early on and you can take the sting out of the expense if you build it into your budget.
DG: How does a manager evaluate if a few leaks are a limited problem with a short term solution that they should address via simple work orders or an indication of a major issue for the HOA?
DG:
WB: Tis is a tricky one, since leaks can be one-offs due to a particularly bad storm, weird wind-driven rain or a problematic area. Unfortunately, leaks can also arise from missing building paper, improper in- stallation of many types of water proofing membranes and/or flashing, poor concep- tual design, or any other array of construc- tion defects. Ultimately, the evaluation of whether there is an issue is determined by investigating the number of leaks, the age of the community, the commonality of the reported problems, and the severity of po- tential damage. Just remember: You must consult experts if you want to be protected by the business judgment rule.
WB:
DG: For sure. Actually, the scariest thing I saw was last year. I had an HOA contact me because they were about to turn 10 years old and they wanted a letter from our office that said they performed their due diligence prior to the expiration of the statutory period to bring a claim. Tey had no reported issues from any of their members, and previous visual inspections showed no signs of leaks or damage. To err on the side of caution, the board elected to do one day of destructive testing. During this testing, they discovered severe decay and damage underneath the stucco. Had they waited and/or not performed the inspections, the magnitude of repairs would have given rise to a massive special assessment or even worse it could have bankrupted the association.
DG: WB:
Yeah, as in life, with leaks, it is the undetected and invisible damage that is often the most terrifying once discov- ered. So, what sort of documentation of leaks is helpful to assess the pervasiveness of an issue from a legal perspective?
WB:
DG: Any homeowner reported leaks, staining, cracks or discoloration of the siding or stucco is helpful. Also, any vendor reports or estimates that have the details from maintenance inspections or repair protocols for any of the building components.
DG:
Te pervasiveness of an issue cannot be fully evaluated without performing an appropriate investigation. HOAs must do more to protect the value of the prop- erty and the safety of their members.
DG: Perfect answer Wendy. WB:
DG:
WB: Often, leaks can go undetected for a long period of time; what indicators are red flags from a legal perspective?
DG: Some of the obvious indications are cracks, staining or discoloration. However, there are more nuanced things to look at like when the project was built, who built it, what type of materials were used etc.
DG:
WB: If red flags are observed, what is the best course of preliminary action to inves- tigate?
DG:
I would always err on the side of caution and call counsel. Tere are two reasons to do this, (1) you want to find out what the statute of limitations are and how much time the association has (or doesn’t have) to bring a claim and (2) you want
DG: WB:
21
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32
