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January 2010

A Journal for California Community Association Leaders

echo-ca.org

Thank You For Not Smoking

ALSO INSIDE THIS ISSUE:

• Who Fixes What? • Whom Do You Trust? • 10 Biggest Mistakes With Roofing

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Contents 10 Biggest Mistakes in Roofing —page 26

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Thank You For Not Smoking Many associations now face an increased number of complaints from nonsmokers about their smoking neighbors and are being asked to take action. This article discusses association responsibilities and potential liabilities in relation to smoking within a common interest development.

The ECHO Journal is published monthly by the Executive Council of Homeowners. The views of authors expressed in the articles herein do not necessarily reflect the views of ECHO. We assume no responsibility for the statements and opinions advanced by the contributors to the magazine. It is released with the understanding that the publisher is not engaged in rendering legal, accounting or other professional service. If legal advice or other expert assistance is required, the services of a competent person should be sought. Acceptance of advertising does not constitute any endorsement or recommendation, expressed or implied, of the advertiser or any goods or services offered. We reserve the right to reject any advertising copy. Copyright 2010 Executive Council of Homeowners, Inc. All rights reserved. Reproduction, except by written permission of ECHO, is prohibited. The ECHO membership list is never released to any outside individual or organization.

Executive Council of Homeowners, Inc.

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One of the most important questions in a homeowner association is “who fixes what?” When these questions arise, do boards often just decide to sit down and figure it out? Or does there have to be a problem first? This two-part article will provide answers to board members and owners.

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Who Fixes What? Part I

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1602 The Alameda, Suite 101 San Jose, CA 95126 408-297-3246 Fax: 408-297-3517 www.echo-ca.org info@echo-ca.org Office Hours: Monday–Friday 9:00 a.m. to 5:00 p.m.

Whom Do You Trust?

Board of Directors and Officers

When there is war inside an association, there are usually several sides—owners, board of directors, management and, sometimes, lawyers. Each brings his or her unique perspective to the dispute, and each may distrust the views of the other. Attorney Tyler Berding discusses trust building in CIDs.

President David Hughes

10 Mistakes with Roofing and Waterproofing

Secretary Dorothy Kopczynski

Roofing replacement and other waterproofing projects are generally the most costly projects faced by association boards, which need to avoid as many complications as possible. This article covers the ten biggest mistakes a board can make in initiating such projects.

Departments

Vice President Karl Lofthouse Treasurer Diane Rossi

Directors Paul Atkins John Garvic Robert Rosenberg Richard Tippett Steven Weil

Jerry L. Bowles David Levy Kurtis Shenefiel Wanden Treanor

Executive Director Oliver Burford

28 Directory Updates 32 News from ECHO

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33 Legislation at a Glimpse 34 ECHO Bookstore 36 Events Calendar 38 ECHO Volunteers 41 ECHO Marketplace 41 Advertiser Index

On the Cover Thank You For Not Smoking—page 6 4

January 2010 | ECHO Journal

Communications Coordinator Tyler Coffin Legislative Consultant Government Strategies, Inc. Design and Production George O’Hanlon ECHO Mission Statement The mission of ECHO is to advance the concept, interests and needs of homeowners associations through education and related services to board members, homeowner members, government officials and the professionals in the industry.

ECHO 2010 Seminars Yes, it’s already next year. The 2009 seminars are behind us, but we are already preparing 2010’s events. Do not forget to mark these dates in your calendar for ECHO 2010 seminars: • Jan. 30—Marin Seminar, San Rafael • Feb. 6—Sacramento Seminar, Sacramento • Feb. 20—Central Coast Seminar, Scotts Valley • March 20—North Bay Seminar, Rohnert Park • April 17—South Bay Seminar, Campbell • June 19—Annual Seminar, Santa Clara

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January 2010 | ECHO Journal

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MANY COMMUNITY ASSOCIATIONS

now face an increased number of complaints from nonsmokers about their smoking neighbors and are being asked to take action.

By Lise K. Ström, Esq.

Thank You For Not Smoking Secondhand Smoke in Community Association Developments he issue of secondhand smoke typically arises in condominium and townhome developments, where smoke can penetrate an adjacent home through walls via air ducts or heating vents, beneath door frames and through windows. The smoker may be in any number of locations: outside in the common area; in a restricted common area location like a balcony or patio; in a common area hallway; or even in the smoker’s own unit. While the nonsmoking neighbor’s complaint may run from general annoyance to worry about health risks to actual physical reactions to the smoke, the smoker generally retorts that, like the nonsmoker, the smoker, too, is an owner and a member of the association and, as such, is entitled to access and enjoy the development, including the smoker’s unit. Thus, the association is often placed in the middle of a pitched battle between nonsmokers and smokers, where the association is called upon to resolve the dispute. Associations have been placed in a difficult spot. While smoking is legal, it has been increasingly regulated in recent years as its health risks have become more widely known. Particularly in

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California, there are more and more smoking restrictions prohibiting where, and whether, smokers can light up. California now bans smoking in workplaces1, restaurants, bars, and, most recently, in cars where minors are present.2 Various municipalities around the State have adopted ordinances prohibiting smoking, most notably, the City of Belmont, whose ordinance declares that secondhand smoke is a public nuisance and forbids smoking in apartments, townhouses, condominiums, and any other residential dwelling where there is a shared common floor or ceiling.3 Other cities, including Dublin, Santa Monica, and Calabasas, have adopted ordinances that prohibit smoking in all outdoor public areas.4 Some associations are responding to this increased regulation by adopting smoking 1 Labor Code §6404.5. Smoking is prohibited by State law in the majority of workplaces which have six or more employees, including restaurants and bars. Smoking is also prohibited within twenty feet of the workplace building. 2 Health & Safety Code §118947 et seq. 3 Belmont Municipal Code §20.5 et seq.

ECHO Journal | January 2010

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restrictions, while other associations are opting to address secondhand smoke complaints on a case-by-case basis. This article discusses association responsibilities and potential liabilities in relation to smoking within a common interest development, as well as considering whether, and how, an association might adopt a no-smoking policy.

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Can Smoking be Regulated in Association Common Areas? The ultimate answer to this question depends, of course, on what the association’s governing documents say. However, as a rule of thumb, where an association’s governing documents provide that the association owns, controls, maintains and is otherwise legally responsible for the development’s common area,5 the board of directors likely can prohibit smoking in the common area. Common area may include outdoor areas like parking structures, swimming pool and recreational areas, or even interior hallways of apartmentstyle condominium buildings. Associations are obligated to ensure that common area is maintained in a reasonably safe condition, which entails proper maintenance of the common area to avoid safety hazards that could lead to personal injury, like protruding sprinkler heads, uneven sidewalks or non-functioning outdoor lighting.6 However, this “safety dutyâ€? may be expanded in the future by a court to include secondhand smoke. In a recent California case, Birke v. Oakwood Worldwide7, the court noted that the landowner (in this case, an apartment complex) owed a duty to the resident to keep the premises “reasonably safeâ€? and that the landowner’s failure to adopt a nosmoking policy for outdoor common area could constitute a breach of that duty. The Birke decision implies that the association’s duty to maintain common area in a safe man4 Dublin Municipal Code §5.56.010 et seq; Santa Monica Municipal Code §4.44.020; Calabasas Municipal Code §8.12.010 et seq. The City of Dublin also specifically restricts smoking in apartment buildings. Dublin Municipal Code §5.56.055. In addition, the City of Santa Monica recently adopted an ordinance prohibiting all smoking in common areas of common interest developments, provided that prior notice is given to all residents. The association may decide to permit smoking in certain designated areas, subject to certain limitations. Santa Monica Municipal Code §4.44.040 5 California Civil Code §1351(b), §1364.

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6 See, e.g., White v. Cox, 17 Cal.App.3d 824 (1971); Frances T. v. Village Green Owners Assn., 42 Cal.3d 490 (1986) 7 169 Cal.App.4th 1540 (2009)

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January 2010 | ECHO Journal

ner may include addressing the harm of secondhand smoke. Although we do not know the outcome of the Birke case because it was returned to the trial court for further proceedings, this decision suggests that California courts may be growing sympathetic to secondhand smoke complaints made by residents and that community associations could be found liable for not having outdoor common area smoking restrictions. Can Smoking be Regulated in Restricted Common Areas? Again, the ultimate answer to this question depends on what the association’s governing documents say. Association control over restricted common area, like balconies and patios, can be difficult to determine. On the one hand, restricted (sometimes also called “exclusive use”) common area is a type of “common area” and, as such, can be regulated for all the same reasons that unrestricted common area can, as discussed above. Often, the governing documents make the individual owner only nominally responsible for the upkeep and maintenance of the restricted common area by, for example, requiring owners to keep their balcony or patio in a “clean and sanitary condition.” This language typically means owners are expected to sweep their balconies or patios regularly and keep them free of debris and garbage, not that owners are obligated to maintain, repair, or replace their restricted common area. Usually, in situations like these, major repairs to the restricted common area and other maintenance work are performed by the association. In cases where the CC&Rs place minimal duties on owners, the association effectively controls and maintains the restricted common area and therefore may have the authority to ban smoking in these locations, just as it does with respect to unrestricted common area. On the other hand, some association governing documents make individual owners largely responsible for maintaining and otherwise controlling restricted common area, especially areas adjacent to an owner’s residence, such as a patio or a backyard area. Often in townhome developments, the governing documents will require owners to take full responsibility for maintaining backyard areas and patios, including the obligation to repair the patio slab, paint or maintain the fence, and maintain backyard landscaping.8 It may be more difficult for the association to ECHO Journal | January 2010

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assert that it has the authority to restrict smoking and other activities in these areas. Can Smoking be Regulated in Units? Most governing documents provide associations with limited control over residents’ conduct in an effort to preserve property values and maintain a harmonious community. In fact, association boards of directors have a fiduciary duty to the association to make decisions and take actions in good faith that, in the board’s considered judgment, are in the best interests of the association;9 and one of the association’s primary tasks is to enforce the CC&Rs in an even-handed, consistent manner.

Locally Owned and Operated

In general, restricting activities inside a residence is typically limited to extraordinary circumstances. Owners are responsible for maintaining everything within their dwellings, generally only subject to the association’s right to enter to address emergencies or situations of neglected maintenance causing damage to the common area. Moreover, the governing documents often provide that each owner is entitled to the quiet enjoyment of his/her residence. However, many governing documents restrict inhabitants from “noxious or offensive conduct” that may be, or become, an unreasonable annoyance or nuisance to others in the community. Nonsmokers often cite this “nuisance” restriction and demand that the association enforce it on their behalf, claiming that the smoke wafting from a nearby residence, balcony, or patio into their home constitutes a nuisance. While an association is allowed to consider the cost, potential results, and other impacts and concerns that may result from enforcing the CC&Rs, failure to enforce the governing restrictions could subject the association to legal liability.10 In addition, the transfer of smoke from one unit to another may be blamed on faulty construction or poor maintenance, and the nonsmoker may demand that the association correct these problems as well.

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9 Corporations Code §7231; see also Raven’s Cove Townhomes, Inc. v. Knuppe Development Co., 114 Cal.App.3rd 783 (1981); Lamden v. La Jolla Shores Clubdominium Homeowners Assn., 21 Cal.App.4th 249 (1999).

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10 Cohen v. Kite Hill Community Association, 142 Cal.App.3d 642 (1983); Duffey v. Superior Court, 3 Cal.App. 4th 425 (1992).

Adopting No-Smoking Restrictions: Practical Considerations There is no legal requirement that an association must adopt smoking restrictions, but there is legal support permitting associations to implement a smoking ban, or limitations, in common area, restricted common area, and even within units. Associations contemplating a no-smoking policy would do well to survey owners for feedback, in addition to examining the structure of the building(s), ventilation systems, weather-stripping of doors and windows and related building components to determine how realistic, effective and desired a smoking ban may be in the community. Requiring smokeless ashtrays, the installation of an air filtration system or other measures to effectively diffuse the smoke may offer workable limitations on smoking in communities with smokers. Other considerations for a no-smoking policy may include a “grandfathering” provision to protect existing owners who smoke, or designating certain locations and/or times for smoking. Even with a valid smoking restriction in place, enforcement can be difficult. How will smoking in the community be monitored and policed? What amount of smoking constitutes a “nuisance”? Moreover, the association must be careful to ensure that its nosmoking policy is applied to all members in a fair and even-handed way, or else the association may potentially be subject to legal liability. Even without a no-smoking policy, associations must be aware of the potential liabilities they face when fielding a complaint from a resident about secondhand smoke, including heightened attention by members to this issue, and the allegation that the association is enforcing the governing documents in an unfair and discriminatory manner. Conflicts are inevitable in associations, especially in the close quarters of condominium and townhome living, and the fact that smokers believe that they have a right to smoke in their own homes while nonsmokers believe that they have a right not to be exposed to harmful secondhand smoke. For better or worse, associations are being placed in the uncomfortable middle of the battle between nonsmokers and smokers.

Lise K. Ström is an attorney in private practice in the South Bay who provides legal services to residential, mixed-use, and commercial community associations with a focus on green development and green conversions.

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By Beth A. Grimm, Esq.

Who Fixes What? Part I

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January 2010 | ECHO Journal

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ONE OF THE MOST IMPORTANT questions in a homeowner association is “who fixes what?” When these questions arise, do boards often just decide to sit down and figure it out? Or does there have to be a problem first? This twopart article will provide answers to board members and owners. ne of the most important questions in a homeowner association is “who fixes what?” On top of this very basic question, others come up and this two-part article will provide answers. • What exactly is the problem? • What is the correct “fix”? • How do you figure out who is responsible if the HOA/Condo documents are not clear on the subject? • What does the Davis-Stirling Act tell you and which controls, the governing documents or the Act? • Can the board decide who fixes what if the documents do not say?

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• What if the board is too slow; can an owner fix it and get reimbursed? • What if the reverse is true—the owner is too slow. Can the board do the work and get reimbursed by the owner? • What is the benefit of having a maintenance policy? • Can the board just adopt a policy or do owners have to vote on it? • What if someone causes the damage that needs to be repaired; are they responsible to fix it? When these questions do come up, do boards just often decide to sit down and figure it out, or does there have to be a problem first? (Suggestion—don’t wait for the problem.)

ECHO Journal | January 2010

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Budget Time: It comes up for the board at budget time—how much money do we set aside in the operating budget for maintenance this year? What about reserves? What do we save up for? What work needs to be done to prolong the life of the buildings, roofs, fences, etc.? What are the responsibilities of the association? Problem Reported By Owner (or Board Member): It comes up anytime an owner finds something that needs to be fixed, and comes to the board with a request to make the repair or a request for reimbursement for something the owner repaired. Problem Reported By Outside Party: It often comes up at time of sale when there is a termite report indicating that damage due to termites or dry rot is necessary. Accidents: It comes up when a bathtub overflows or an icemaker pipe bursts and floods out the neighbor below. The questions tend to arise more often in a condominium complex or a townhouse where the residences are in the same building or anytime that the housing is attached than in a single family detached home (any of which might be in a common interest development), but they can come up in any situation where the regulatory documents are unclear.

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Types of Projects and Common Maintenance Issues Condominium—Comprised of Units and Common Area In a condominium, the owners usually own the buildings and structures housing the units (called common area) as tenants-incommon (often including carports and recreational facilities and the like) and each owner owns the airspace in his or her unit. Owners (or residents/tenants by delegation of rights) often have exclusive use of a balcony, deck, patio and sometimes a garage or carport space. In a condominium, owners are usually responsible for the paint on their walls, the flooring on their floors, and often for the plumbing fixtures within the unit space such as the toilet, flange, outlets, tub and shower drains, etc. Sometimes the owners are also responsible for cable, wiring and plumbing that serves their units if the point of the separate service is outside the unit. The association usually maintains the buildings, foundations, and structures in a condominium development and everything outside the unit and pays for it by collecting assessments.

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Commonly, the real arguments happen over doors, windows, ceiling replacement, drywall, plumbing pipes in the wall, balcony rails and floors, patio slabs, and the like because there is no mention of these things in the documents. These seem as if they should be part of the units but commonly are left out of the description. With regard to windows and doors, when they are mentioned in the definition of a unit, sometimes it is in terms of surfaces or glass only, and not the entire item. Balconies and slabs are commonly areas of confusion. Often, at least in original documents, there is little clarification. In my experience in reviewing condo documents, most often the association is responsible for the balcony structural parts including the railing and flooring and the owners are responsible for keeping the balconies clean and free of debris and must take measures not to damage the flooring, such as protecting plants with water retainers so flooring does not rot from over-watering. Responsibilities can be different, of course. One starts with the governing documents to look for language or clues as to what the responsibilities are. Other documents that might be helpful to the determination of the developer’s intent as to how maintenance responsibilities would be defined are the first few reserve studies done by the developer. However, caution is advised because sometimes important components are left out because they were not contemplated by the original plans but added later, or they were not yet built out when the original component list was put together. Planned Developments (Often Called PDs, Comprised of Lots and Common Area) In a townhome situation where the homes are attached, the association does not own the separate interest lots (those owned by individual owners), but still it often has responsibility for roofs and painting of the buildings that house the townhomes and sometimes has responsibility for siding replacement, foundations, etc. Arguments often arise about responsibility for siding, usually when it comes time to paint, because it is common that the board is told by the painting contractor that the siding is shot and won’t hold the paint or allow it to do its weatherproofing work. So, what does one do when the question comes up that requires a determination of responsibilities with regard to maintenance?

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January 2010 | ECHO Journal

Single Family Homes with Shared Amenities Usually, responsibility for maintenance is simple in a common interest development where the homes are completely separate from each other. Still, issues can arise over things like fencing, where some of the fences are on the border of common area property and some are between two lots, or some fencing is original and some was added; the added fencing may be under a different responsibility situation. It could happen if the association has any responsibility for roofs, painting or even landscaping front lawns, which is sometimes the case. In these situations issues may come up over who is responsible for tree root damage if the association or owner maintains the trees, and the roots cause damage to areas that are the responsibility of another party altogether, or if one of the parties cannot fulfill their responsibility because of the action or nonaction of the other party. An example of this might be when the association is responsible for the front lawns or roofs, but these areas cannot be properly maintained unless the owner maintains the irrigation system, or if the owner has installed satellite dishes, solar installations or otherwise caused damage to the roofs before they should have needed to be replaced. The Basics What exactly is the problem? One has to identify a problem correctly in order to determine responsibility for it. Water leaks are notoriously complex. An owner might see mold around a window frame and ask the association to replace the window and/or frame. The association might tell the owner the window frame and window are the owner’s responsibility. All the time the parties are fighting over this, it may be that the real problem is a roof leak trailing along the eaves or inside the walls and culminating at the window. What is the correct “fix”? Once a problem has been diagnosed properly, then a proper “fix” needs to be identified. The parties may fight over what the proper fix is. In one California case, after the trial court judge and the appellate court judges disagreed, the California Supreme Court ultimately found that (very general interpretation) if the board had a plan in place to address damage or a problem (in this case the problem involved termite damage and eradication), and the owner disagreed with that plan (board wanted to do

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Order the book today from ECHO Call 408-297-3246, fax 408-297-3517 or email: info@echo-ca.org ECHO Journal | January 2010

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Affirmative Management Services Feeling ignored by your property manager? Need to get more things done?

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Interpreting Governing Documents Questions: What do the association documents say? This is the first place to go! How do you figure out who is responsible if the HOA/ condo documents are not clear on the subject? First, it is important to understand the hierarchy of the documents. It is as follows, unless the documents state otherwise: The Articles of Incorporation is the charter document and is filed with the State of California Secretary of State. The Bylaws are the organizational document and should contain the voting rights; meeting requirements (membership and board meetings); the nomination and election requirements; board duties, authority and responsibility; and hearing and notice processes and matters related to running the corporation. The “CC&Rs� (Declaration of Covenants, Conditions and Restrictions) are within a document that is recorded with the local county recorder and the legal impact is that owners have constructive legal notice of their presence by virtue of the fact that they are recorded in the public records. So this is where you want to have all regulations and restrictions on the properties and the owners’ rights, responsibilities, and use/maintenance of the properties. The CC&Rs generally take precedence in the order of integrity over the other documents if there is a conflict. However, be advised, there may be language or original filing processes in/of the documents themselves that causes arguments over this premise. Finally, yet importantly, were the association rules adopted pursuant to authority in the governing documents (which is required)? These carry weight but not as much as the CC&Rs and other documents mentioned. The arguments over rules tend to arise because of differences of opinion about whether (1) clear authority exists, (2) the board exceeded its authority in adopting the rule, (3) proper rules adoption procedures were followed, and/or (4) whether the board can add detail and rules that “go further� than what the documents say exactly.

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18 January 2010244-0909 | ECHO Journal Phone: (408)

spot repair and eradication as working on various areas and owner wanted tenting and the works), the court would not second-guess the board, but would respect the board’s judgment. The case is Lamden v. LaJolla Shores Clubdominium (1996).

On the web: www.thehoamanager.com

Continued on page 37

Learn how to handle the toughest issues facing your homeowner association Seminar Agenda 8:00 a.m.

Registration and Continental Breakfast

8:45 a.m.

Welcome

9:00 a.m.

Legislative Update Sandra Bonato, Esq. See what Sacramento is doing—and wants to do— to your community.

Oliver Burford

9:30 a.m.

You be the Judge! David Feingold, Esq. Feuding neighbors, leaking decks and slanderous statements. Become a sitting judge and see if you agree with how the courts handled association disputes in 2009—and take away valuable lessons to apply immediately.

10:20 a.m.

Break

10:45 a.m.

40 Days and 40 Nights Glenn Youngling, Esq. Follow our fictional director Fred Freetime through his last 40 days—and 40 nights. From agendas to meetings to minutes and beyond. After this session you will handle every common issue with ease, by simply asking, “What would Fred do?”

11:35 a.m.

12:25 p.m.

12:55 p.m. 1:00 p.m.

Have to Do Something! Wanden Treanor, Esq. From sounds to smoke to sleaze, the demands on a community association board of directors to “Do something” are greater than ever. Learn when and how to respond and apply extraordinary solutions to ordinary problems. Questions and Answers All Speakers Bring your questions and concerns, get some answers and, most importantly, find out that you are not alone. Drawings for Door Prizes Adjourn

Don’t leave your association to fate. Learn how to deal successfully with the most pressing issues facing you and your association by attending the Marin County Seminar.

Marin County Seminar Saturday, January 30, 8:00 a.m. to 1:00 p.m. Embassy Suites, 101 McInnis Pkwy., San Rafael Member Registration Cost: $45 Yes, reserve _____ spaces for the Marin Spring Seminar. Amount enclosed: $__________ (attach additional names) Name: ______________________________________________________ HOA or Firm: ________________________________________________ Address: ____________________________________________________ City: __________________________ State: _____ Zip: ____________ Phone: ______________________________________________________ Visa/Mastercard No. _____________________ Exp. Date: ________ Signature: ___________________________________________________ Orders will not be processed without payment in full. Fees for cancelled registrations will not be refunded. Return with payment to: ECHO, 1602 The Alameda, STE 101, San Jose, CA 95126 Telephone: 408-297-3246; Fax: 408-297-3517

20

January 2010 | ECHO Journal

By Tyler P. Berding, Esq.

Whom Do You Trust? The Essential Ingredient in Effective Management of Community Associations hen there is war inside a community association, there are usually several sides—the owners, the board of directors, management, and sometimes, lawyers. Each brings his or her unique perspective to the dispute, and each may distrust the views, or worse, the motives of the other. That they should all be working together to manage a project that is inherently unmanageable is beside the point—when there is a lack of trust, cooperation goes by the boards, and issues that should be open to easy solutions instead become a battleground. Why are we wasting good ink to discuss disputes that are often inconsequential in the scheme of things? Because lack of trust can paralyze a community association just when economics require unprecedented cooperation. Examples? Board members who are convinced (by themselves or others) that they must follow the dictates of a statute may pursue enforcement measures that are too rigid for the situation. Owners who lack an understanding of the history of an association, its economic condition, or the legal authority under which it operates may believe that rules can be ignored. Attorneys who lack sensitivity to the emotional side of a dispute among board members may try to resolve the

W

issue with formality when flexibility and consideration of human nature is required. Owners with short-term interests may reject the needs of longer-term residents. Managers who lack the confidence to confront wayward board behavior with strong leadership may fear losing favor and perhaps the account. There are hundreds of other sources of friction within a community association, but all of the foregoing have one thing in common—a breakdown in trust among the principal players. This can happen in various ways. A clash of egos; lack of education or experience; a history of conflicts among individuals or between individuals and the board of directors; personal “vendettas;” and outsized expectations. In each case, the conflict often has its roots, not in the practical reality of the issues at hand, but rather in the unwillingness of one party to trust the motives of another. Why someone has taken a particular position often becomes more important than what is actually at stake. A suspicion of motives can distract the search for truth. So how do we instill trust? Let’s look at each of the principal players. The Board of Directors. The board of directors of a typical community association is composed of

ECHO Journal | January 2010

20

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volunteers. They have a big responsibility and it is no wonder that responsibility weighs heavily on them. Most of the directors we know are conscientious, self-sacrificing individuals who sincerely want “to do the right thing.” Many have business training that equips them with experience and knowledge vital to their management role. But associations are not exactly like businesses. There is a big political factor at play as well. Owners make demands, fail to obey the rules or are simply apathetic. Any or all of this can frustrate a well-meaning board. Sometimes it may be more convenient to simply hide behind the rules rather than try to deal with human nature. The advice of managers or attorneys will typically be to follow the statute or the governing documents because that’s the most logical (and lawful) thing to do. But the right path may not always be just to follow the rules. The right path may also require a human touch, flexibility and a willingness to explore creative solutions that create relationships—and develop trust. Owners. Many owners have little inclination to understand the operations of their community association. They are busy people, with work and family concerns, and their homeowner association is way down the list. Apathy reigns supreme. That is, until something affects them personally: A proposed increase in assessments; closing the pool in the winter; enforcement of parking restrictions; a roof leak. When their lives are negatively impacted, owners are sometimes quick to assume that someone screwed up. Their lack of involvement in the day-to-day operations, their infrequent attendance at meetings, their failure to read bulletins or newsletters has isolated them from their board and management. Isolation breeds mistrust. Management. Managers are rightfully cautious. Like board members, they have a big responsibility. They are paid to insure that the association is maintained properly, respects the governing documents and makes sound business decisions. Directors may assume that a cautious manager lacks the willingness to manage aggressively. On the other hand, if the manager comes on too strong, the board may interpret that as recklessness or, worse, that the manager is usurping board authority. Any of these doubts will sew seeds of mistrust, and when we don’t trust someone, their motives become our primary focus rather than their performance. Attorneys. Lawyers are employed to give legal advice and, in the case of a community

New election rules: $500 In today’s economic crisis, there may be some items that associations can cut to reduce costs. ECHO membership is not one. Let’s face it, educated board members are better fiduciaries, which helps them to avoid costly law suits and possibly personal liability. ECHO is the premier resource in California for board member education. ECHO offers new articles each month with practical and easy to understand advice about current California requirements, and what may be on the horizon. ECHO staff is available by phone or E-mail to answer members’ questions about association problems or to recommend competent professional services when necessary. And with discounted member rates at more than a dozen educational events throughout the year, ECHO is simply the best educational resource for California homeowners. Avoid Litigation Each year, as a member benefit, ECHO sends every board member a copy of the updated Community Association Statute book. Every issue of the ECHO Journal and every seminar examine one or more aspects of compliance with association law, because one of the major causes of expensive litigation is ignorance of the law.

Mailing ballots: $200 Make Better Financial Choices Many associations struggle to understand reserve funding requirements and strategies, the benefits and disadvantages of using special assessments, proper collections practices, and even how to determine what components the association is required to maintain. At a time when wise financial planning is essential, ECHO members have access to a wealth of articles about reserve funding, budgeting, insurance, collections, and much more. Fight Costly Regulation Every year, Sacramento legislators introduce more legislation that confuses the job of California board members and increases the costs of compliance. ECHO is committed to fighting unnecessary regulation in California and promoting the interests and welfare of common interest developments. Hire Competent Professionals ECHO offers a variety of articles and publications to help members evaluate their service providers, including questions to ask prospective management firms and contractors. All ECHO Journal articles are available to members at no cost, and publications are sold to members at a discount.

Avoiding a lawsuit: Priceless. Spend a Little, Get a Lot The cost of ECHO membership is minimal. In a worsening economy, associations are looking to cut big expenses from their budgets. Yet, ECHO membership is as little as 25¢ per unit each month. For that small cost, here’s what every board member receives as part of being a member of ECHO: • A subscription to the ECHO Journal • An annual copy of the current Community Association Statute book • Unlimited access to ECHO’s library of past articles • Telephone consultations with ECHO staff about their problems • Reduced fees for ECHO events • Discounted prices on publications • And much more… In These Tough Economic Times, ECHO Membership is a Necessity As the only California organization devoted exclusively to board member and homeowner education, ECHO is a one-of-a-kind resource that your association can’t afford to lose.

be your greatest allies in a world where rigidity and formality seem to be taking over. This is especially true when the stakes are not high. Rule enforcement for the sake of enforcement alone will most certainly erode the members’ trust in the board and management. Likewise, frequent owner complaints about matters that have few real consequences are guaranteed to cost the member respect and trust in the eyes of the board of directors. Let the small things go. Be as good as your word. If you promise to do something, do it. Directors who offer to investigate an issue to satisfy a member can do no worse in the trust department than failing or forgetting to follow through on the promise. Managers who, when asked to explain say, an invoice or an accounting and then ignore the request or (and this is much worse) provide an explanation that is not based in fact, will lose the trust of the members quickly. An attorney who takes refuge in legalese or who tries to overwhelm his or her audience as a means of winning a debate will lose more than just the debate—whatever trust they had will evaporate and their future effectiveness will be compromised.

association, that usually means interpreting the governing documents or state law. Often the board members have different assumptions or wish a different outcome. It may be tempting to try to satisfy everyone, but posturing or wavering to make the client happy is a fool’s errand. A lawyer who has the courage of his or her convictions is actually more likely to gain the client’s trust. Because of the political nature of a community association client, a lawyer can’t just know the law—he or she has to be trusted, by both members and the board, to be effective. Here are a few guidelines on gaining and maintaining trust in the management of community associations: Lay your cards on the table. No hidden motives. Be upfront with your reasons for taking a particular position. Explain them logically with careful adherence to the facts. Glossing over the facts or altering them to suit your purpose will give others reasons not to trust you. As a board member or manager, make sure you understand the facts and whatever professional advice you have been given and that your position squares with both. As an owner, be sure that you have all of the information you need to understand 24

January 2010 | ECHO Journal

the dispute and the rules that govern it. Be clear with everyone as to why you are advocating your position. Keep your emotions in check. Stay rational. It’s hard to trust someone who lets his or her emotions control them. Board members are often targets of abuse or misstatements by owners. Owners may feel powerless when dealing with the association. Managers are often caught in the middle. Those situations are frustrating and can open the door to emotional rather than rational thoughts and actions, usually at precisely the time when calm deliberation is required. Communicate well and often. As stated above, be open. Regardless of whether you are a board member, a manager, or an owner, open dialogue will dispel suspicion and engender greater trust. Attorneys must not be afraid to share the basis for their opinions with their clients. Regular reporting, including face to face meetings, will keep clients in the loop and keep them on your side. Be willing to compromise. Flexibility with enforcement of the rules; creativity when applying them; and always maintaining a sympathetic ear toward possible compromise will

Don’t let suspicions distract you. When we become suspicious and we begin to doubt another’s motives, we lose our normal rational perspective because our suspicions distract us. A low ratio of emotion to rationality is critical to negotiating disputes. In fact, an open admission of your own motives may instill trust in the opposition because suspicion is exchanged for understanding. It may not resolve the dispute, but it can serve to open meaningful dialogue. Trust garnered over a decade or more can be lost in a moment over some hasty comment, a transparent motive, a departure from the truth, or an emotional outburst. Regaining that trust may take years, or it may never happen. Community associations rely on contracts and statutes for their authority, but their leaders need trust for legitimacy. The law dictates the rules but cannot dictate trust.

Tyler Berding is a founding partner of Berding|Weil, LLC, a community association law firm located in Alamo, CA. He has taught real estate and community association law at California State University East Bay and is the immediate past president of ECHO. Questions or comments can be directed to Dr. Berding at www.berding-weil.com or www.condoissues.com.

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10 Biggest Mistakes With Roofing and Waterproofing Projects oofing replacement and other large waterproof-

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ing projects are generally the most costly projects

This process results in bids that cannot be compared, causing confusion and poor decision making. A specification can be as small as one page for a small project and could be prepared by a professional community manager. But it must be complete and detailed for large projects (prepared by an architect or roofing consultant). The job specifications should be prepared only after the final product selection is made. Product manufacturers’ specifications are generic and cannot contain

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that association boards face. Such projects are done only occasionally at an association. Because of the importance and cost of such work boards need to avoid as many complications as possible. This article covers the ten biggest mistakes a board can make in initiating such projects.

26

January 2010 | ECHO Journal

all the special details that every project has. The details are critical for roofing projects.

contract is usually the largest one an HOA will ever have to sign.

2. Signing a Contract Prepared By a Contractor Without Consulting the Association’s Legal Counsel This mistake is made by many associations attempting to save money. All major contracts should have, at minimum, a thorough review and comment by counsel. Even better is to have the association attorney write the contract. Roofing can be more complex than other types of work, especially related to warranties. A roofing

3. Asking the Manager to be the Project Manager for a Major Construction Project Community managers are well trained in the duties of association management, especially those who have achieved their CCAM or PCAM. However, there is no Continued on page 30

ECHO Journal | January 2010

27

Directory UPDATES Updates for listings in the 2008 ECHO Directory of Businesses and Professionals.

Additions to Member Listings Comcast 1900 S. 10th St. San Jose, CA 95112 Contact: Stephan Ballentine Tel: 408-918-6058 Fax: 408-294-7280 Email: stephan-ballentine@cable.comcast.com Comcast is a cable operator providing cable television, high speed internet and home phone service to residential and commercial customers. Cox Associates, LLC P.O. Box 67369 Scotts Valley, CA 95067 Contact: Robert Cox Tel: 831-708-2916 Fax: 831-708-2917 www.rcogroup.com Email: rcox@rcogroup.com Signature Painting 1545 Third Ave. Walnut Creek, CA 94597 Contact: Brian Mitchell Tel: 415-336-0374 Fax: 415-336-0374 www.signaturepainting.us Email: brian@signaturepainting.us Signature Painting specializes in providing professional painting services for homeowner associations and apartment buildings throughout Northern California.

28

January 2010 | ECHO Journal

Changes to Member Listings Advance Construction Technology, Inc. 6451 Via Del Oro, Suite B San Jose, CA 95119 Tel: 408-365-0196 Fax: 408-365-0199.

6(59,1* &20081,7,(6 7+528*+287 1257+(51 &$/,)251,$ 672&.721 +4 ‡ )5(0217 PLEASANTON ‡ &233(5232/,6 ‡ 02'(672 ‡ 6$17$ &/$5$

M & C Association Management Services provides community association management and developer services to Fremont, Pleasanton, Santa Clara, Stockton, Modesto, Copperopolis and the surrounding foothills. Since 1990, our sole focus has been to deliver performance that enriches communities and enhances the lives of the people we serve. M & C is proud to be an Accredited Association Management CompanyŽ (AAMCŽ), which is the Community Associations Institute’s highest GHVLJQDWLRQ DZDUGHG WR PDQDJHPHQW ÀUPV

3OHDVDQWRQ ‡ )UHPRQW ‡ 6DQWD &ODUD Stockton 209.644.4900 ‡ 0RGHVWR ‡ &RSSHURSROLV For management proposal information, please visit www.mccommunities.com or email info@mccommunities.com ECHO Journal | January 2010

29

Ten Biggest Mistakes Continued from page 27

formal training for them in management of construction projects. It takes years of training and experience to be a competent construction manager. Many of the largest management firms have a policy against their managers’ performing project management for construction due to high liability exposure for the firm. 4. Giving Large Advance Deposits for Materials to Contractors Many associations are led to believe they are obligated to give contractors material deposits before starting the project. This is mistake that can place the CID’s funds in jeopardy. All successful contractors have credit accounts with their suppliers, usually for 30 days or more. If a bidder cannot fund their payroll until the first payment, the association should reconsider doing business with that company.

Pay only for pre-agreed benchmarks of construction completed and materials verified onsite. 5. Making Progress Payments Based on Percentage of Completion Instead of Measurable Completed Work Measuring the amount of progress in percentage is difficult for both parties, especially for the association and its manager. A good rule is to pay only for pre-agreed benchmarks of construction completed and materials verified onsite. 6. Failure to Start Planning 3–5 Years in Advance of Need This is a common mistake, and there are many reasons this can happen. Five years is not too early to start planning a major roof project. Better planning can help to limit or eliminate emergency assessments, disgruntled members and excess costs, not to mention delay causing high emergency repair costs. Continued on page 33 30

January 2010 | ECHO Journal

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31

News from ECHO

Ten Biggest Mistakes With Roofing and Waterproofing Projects Roofing replacement and other large waterproofing projects are generally the most costly projects that association boards face. Such projects are done only occasionally at an association. Because of the importance and cost of such work boards need to avoid as many complications as possible. This article covers the ten biggest mistakes a board can make in initiating such projects. 1. Soliciting bids without specifications. 2. Signing a contract prepared by a contractor without consulting the association’s legal counsel. 3. Asking a community manager to be the project manager for a major construction project. 4. Giving large advance deposits for materials to contractors. 5. Making progress payments based on percentage of completion instead of measurable completed work. 6. Failure to start planning 3 to 5 years in advance of need. 7. Accepting the lowest bid without full evaluation of all bids including interviews with bidders. 8. Believing that the city inspector will validate the installation and verify all parts are done correctly. 32

January 2010 | ECHO Journal

9. Making the final payment without obtaining the closeout documents (permit, warranty, lien releases). 10. Assuming all roofs are equal and all contractors are equal. What’s the Bottom Line: • Get a current roof survey by an independent roof professional to start the process. • Retain professional help (roof consultant or architect) for guidance with product selection. • Obtain complete custom specifications for your project, not generic specs. • Obtain bids from pre-qualified contractors who have experience with the product you have selected. • Obtain a roofing contract from your attorney or the roofing professional. • Arrange for independent service to monitor the contractor and approve the work.

Thank You For Not Smoking Many community associations now face an increased number of complaints from nonsmokers about their smoking neighbors and are being asked to take action. The issue of secondhand smoke typically arises in condominium and townhome developments, where smoke can penetrate an adjacent home through walls via air ducts or heating vents, beneath door frames and

through windows. The smoker may be in any number of locations: outside in the common area; in a restricted common area location like a balcony or patio; in a common area hallway; or even in the smoker’s own unit. While the nonsmoking neighbor’s complaint may run from general annoyance to worry about health risks to actual physical reactions to the smoke, the smoker generally retorts that, like the nonsmoker, the smoker, too, is an owner and a member of the association and, as such, is entitled to access and enjoy the development, including the smoker’s unit. Thus, the association is often placed in the middle of a pitched battle between nonsmokers and smokers, where the association is called upon to resolve the dispute. Some associations respond to this increased regulation by adopting smoking restrictions, while other associations are opting to address secondhand smoke complaints on a case-by-case basis. There is no legal requirement that an association must adopt smoking restrictions, but there is legal support permitting associations to implement a smoking ban, or limitations, in common area, restricted common area, and even within units. Associations contemplating a nosmoking policy would do well to survey owners for feedback, in addition to examining the structure of the building(s), ventilation systems, weather-stripping of doors and windows and related building components to determine how realistic, effective and desired a smoking ban may be in the community. Requiring

smokeless ashtrays, installation of an air filtration system to effectively diffuse the smoke may offer workable limitations on smoking in communities with smokers. Other considerations for a nosmoking policy may include a “grandfathering” provision to protect existing owners who smoke, or designating locations and/or times for smoking. Even with a valid smoking restriction in place, enforcement can be difficult. How will smoking in the community be monitored and policed? What amount of smoking constitutes a “nuisance”? Moreover, the association must be careful to ensure that its no-smoking policy is applied to all members in a fair and even-handed way, or else the association may potentially be subject to legal liability. Even without a no-smoking policy, associations must be aware of the potential liabilities they face when fielding a complaint from a resident about secondhand smoke, including heightened attention by members to this issue, and the allegation that the association is enforcing the governing documents in an unfair and discriminatory manner. Conflicts are inevitable in community associations, especially in the close quarters of condominium and townhome living, and the fact that smokers believe that they have a right to smoke in their own homes while nonsmokers believe that they have a right not to be exposed to harmful secondhand smoke. For better or worse, associations are being placed in the uncomfortable middle of the battle between nonsmokers and smokers.

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Ten Biggest Mistakes Continued from page 30

7. Accepting the Lowest Bid Without Evaluating All Bids Including Interviews with Bidders Associations try to save themselves personal time by simply selecting the low bid, assuming all contractors are the same and bids are the same, which is not true. The lowest bid may have critical exclusions that could result in the highest final cost. 8. Believing that City Inspectors Will Validate the Installation The typical city permit/inspection service is limited to a structural wood inspection and a final (completed) inspection. Seldom do the city inspectors make sufficient job-inprogress visits to verify the work is done per code or manufacturer’s specs. 9. Making the Final Payment Without Obtaining the Closeout Documents (Permit, Warranty, Lien Releases) The closeout documents should be demanded and a final payment withheld until they are in the manager’s hands and verified correct for the project. There are two

kinds of warranties: workmanship and product, and they are different documents. Nearly all local city or county building departments provide a signed-off permit card when they are notified the roof is done. However, they may not actually go up on the roof. 10. Assuming All Roofs Are Equal and All Contractors Are Equal The fact is all roofs are custom fabricated onsite to some degree or other. Most roofs are assembled one nail at a time by a real person with tools. Installers have their good and bad days like all humans. Roofs of the same brand and type may be installed quite differently by contractors. Metal flashings can vary widely from contractor to contractor and they are critical for the waterproofing. Reusing metal components is sometimes suggested as a way to reduce the roof cost, but it is a poor idea. Actually, these components are some of the lowest-cost parts of the roofing system. The Bottom Line • Get a current roof survey by an independent roof professional to start the process.

• Retain professional help (roof consultant or architect) for guidance with product selection. • Obtain complete custom specifications for your project, not generic specs. • Obtain bids from pre-qualified contractors who have experience with the product you have selected. • Obtain a roofing contract from your attorney or the roofing professional. • Arrange for independent service to monitor the contractor and approve the work.

Carl Brown is the general manager at AWS Consultants Inc. He is a member of RCI, an international association of professional consultants, architects, and engineers who specialize in the specification and design of roofing, waterproofing and exterior wall systems, from which he holds the certification of Registered Roofing Observer. He has been a local roofing consultant for 12 years, serving mostly common interest development projects. ECHO Journal | January 2010

33

2008 ECHO Business & Professional Directory $20.00 Non-Member Price: $25.00

Condominium Bluebook 2010 Edition $18.00 Non-Member Price: $25.00

Homeowners Association and You $13.00 Non-Member Price: $20.00

This directory lists all business and professional members of ECHO as of December 2007. Current addresses, telephone and fax numbers, email addresses, and a short description are included. This directory is an invaluable tool for locating service providers that work with homeowner associations.

This well-known compact guide for operation of common interest developments in California now includes a comprehensive index of the book and a chapter containing more than 200 frequently-asked questions about associations, along with succinct answers.

A practical problem solving guide to all aspects of community association living. Written by two long-time association residents, it provides an insightful overview of community living from the viewpoint of experienced owners in readable language. Recently revised and expanded.

Robert’s Rules of Order $7.50 Non-Member Price: $12.50

The Board’s Dilemma $10.00 Non-Member Price: $15.00

A step-by-step guide to the rules for meetings of your association, the current and official manual adopted by most organizations to govern their meetings. This guide will provide many meeting procedures not covered by the association bylaws or other governing documents.

In this essay, attorney Tyler Berding confronts the growing financial problems for community associations. Mr. Berding addresses board members who are struggling to balance their duty to protect both individual owners and the corporation, and gives answers to associations trying to avoid a funding crisis.

Homeowners Associations— How-to Guide for Leadership $35.00 Non-Member Price: $45.00 This well-known guide and reference is written for officers and directors of homeowners associations who want to learn how to manage and operate the affairs of their associations effectively.

Community Association Statute Book—2010 Ed. Coming Soon! Contains the 2010 version of the Davis-Stirling Common Interest Development Act, the Civil Code sections that apply to common interest developments and selected provisions from the Civil, Corporations, Government and Vehicle Codes important to associations.

California Building Guidelines for Residential Construction $52.50 Non-Member Price: $60.00 This easy-to-read manual is an excellent tool to understand a new home. It contains chapters covering more than 300 conditions that have been sources of disputes between homeowners and builders, offers homeowner maintenance tips, and defines the standards to which a residence should be built.

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Questions & Answers About Community Associations $18.00 Non-Member Price: $25.00 For 12 years, Jan Hickenbottom answered homeowners’ questions in her Los Angeles Times column on community associations. Now collected in one volume, readers can find answers to almost any question about CIDs.

Reserve Fund Essentials $18.00 Non-Member Price: $25.00 This book is an easy to read, musthave guide for anyone who wants a clear, thorough explanation of reserve studies and their indispensable role in effective HOA planning. The author gives tips to help board members mold their reserve study into a useful financial tool.

The Condo Owner’s $15.00 Answer Book Non-Member Price: $20.00

2009 ECHO Annual Seminar Program Book $15.00 Non-Member Price: $20.00

An excellent guide to understanding the rights and responsibilities of condo ownership and operation of homeowners associations. The question-and-answer format responds to more than 125 commonly-asked questions in an easy to understand style. A great resource for newcomers and veteran owners.

This 300+ page reference book contains the presentation outlines, text and handouts from the sessions at the 2009 ECHO Annual Seminar held on June 13, 2009. It also contains vital information for association directors, such as assessment collection policies, internal dispute policies, and much more.

Dispute Resolution in Homeowner Associations $20.00 Non-Member Price: $25.00 This publication has been completely revised to reflect new requirements resulting from passage of SB 137.

Publications to answer your questions about common interest developments Now Order Online at echo-ca.org

Bookstore Order Form Board Member’s Guide for Contractor Interviews $20.00 Non-Member Price: $25.00

Executive Council of Homeowners 1602 The Alameda, Suite 101, San Jose, CA 95126 Phone: 408-297-3246 Fax: 408-297-3517 TITLE

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This report is a guide for directors and managers to use for interviews with prospective service contractors. Questions to find out capabilities and willingness of contractors to provide the services being sought are included for most of the contractor skills that associations use.

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Yes! Place my order for the items above. Board Member’s Guide for Management Interviews $20.00 Non-Member Price: $25.00 This guide for use by boards for conducting complete and effective interviews with prospective managers takes the guesswork out of the interview process. Over 80 questions covering every management duty and includes answer sheets matched to the questions.

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AMOUNT

ECHO Events Calendar

Dates for your calendar Thursday, January 7, 2010 North Bay Resource Panel 11:45 a.m. Contempo Marin Clubhouse 400 Yosemite Rd., San Rafael Friday, January 8 East Bay Resource Panel 9:30 a.m. Angius & Terry 1900 N. California Blvd., Suite 950, Walnut Creek

Wednesday, February 3 Maintenance Resource Panel 12:00 Noon ECHO Office, 1602 The Alameda, San Jose

Monday, January 11 Accountants Resource Panel 6:00 p.m. Francesco’s Restaurant Oakland Tuesday, January 12 Central Coast Resource Panel 12:00 Noon Pasatiempo Inn, Santa Cruz Wednesday, January 20 Wine Country Resource Panel 11:45 a.m. Eugene Burger Mgmt. Co. 6600 Hunter Dr., Rohnert Park Thursday, January 21 San Francisco Luncheon 11:45 a.m. St. Francis Yacht Club San Francisco

Saturday, January 30 Marin County Seminar 7:30 a.m. to 1:30 p.m. Embassy Suites Hotel 101 McInnis Parkway San Rafael

Saturday, February 6 Sacramento Seminar 8:00 a.m. to 1:00 p.m. Marriott Rancho Cordova 11211 Point East Dr., Rancho Cordova Wednesday, February 10 South Bay Resource Panel 12:00 Noon Il Fornaio 302 S. Market St., San Jose Friday, February 12 East Bay Resource Panel 9:30 a.m. Angius & Terry 1900 N. California Blvd., Suite 950, Walnut Creek

Wednesday, February 17 Wine Country Resource Panel 11:45 a.m. Eugene Burger Mgmt. Co. 6600 Hunter Dr., Rohnert Park

Wednesday, March 17 Wine Country Resource Panel 11:45 a.m. Eugene Burger Mgmt. Co. 6600 Hunter Dr., Rohnert Park

Saturday, February 20 Central Coast Winter Seminar 7:30 a.m. to 1:30 p.m. Hilton Santa Cruz/Scotts Valley 6001 La Madrona Dr., Santa Cruz

Thursday, March 18 San Francisco Luncheon 11:45 a.m. St. Francis Yacht Club San Francisco

Thursday, March 4 North Bay Resource Panel 11:45 a.m. Contempo Marin Clubhouses 400 Yosemite Rd., San Rafael Monday, March 8 Accountants Resource Panel 6:00 p.m. Francesco’s Restaurant Oakland Tuesday, March 9 Central Coast Resource Panel 12:00 Noon Pasatiempo Inn, Santa Cruz Friday, March 12 East Bay Resource Panel 9:30 a.m. Angius & Terry 1900 N. California Blvd., Suite 950, Walnut Creek

Saturday, March 20 North Counties Seminar 8:00 a.m. to 1:00 p.m. Rohnert Park Comm. Center 5401 Snyder Ln., Rhonert Park Saturday, April 17 South Bay Spring Seminar 8:00 a.m. to 1:00 p.m. Campbell Community Center 1 E. Campbell Ave., Campbell Thursday, May 20 San Francisco Luncheon 11:45 a.m. St. Francis Yacht Club San Francisco Friday and Saturday June 18 and 19, 2010 ECHO Annual Seminar Santa Clara Convention Center Santa Clara

Regularly Scheduled ECHO Resource Panel Meetings Resource Panel Maintenance North Bay East Bay Accountants Central Coast South Bay Wine Country Legal

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January 2010 | ECHO Journal

Meeting First Wednesday, Even Months First Thursday, Odd Months Second Friday, Monthly Second Monday, Odd Months Second Tuesday, Odd Months Second Wednesday, Even Months Third Wednesday, Monthly Quarterly

Location ECHO Office, San Jose Contempo Marin Clubhouse, San Rafael Angius & Terry, Walnut Creek Francesco’s Restaurant, Oakland Pasatiempo Inn, Santa Cruz Il Fornaio, San Jose Eugene Burger Management Co., Rohnert Park Varies

Who Fixes What? Continued from page 18

Determining Whether Davis-Stirling Act Provisions Control Over Governing Documents It is important to understand what the law (codes and cases) says and when the law controls and when the documents control. Often, the law does give a hint by the words “unless the documents otherwise provide” (documents control), or “notwithstanding anything in the governing documents” (law controls). Sometimes cases have been decided that “overrule” what documents say. Examples stand out in the areas of allowing pets, approval of drought resistant landscapes, and choices of roofing materials. As for maintenance responsibilities, I know of no cases that overrule the documents or application of the Davis-Stirling Act in the area of maintenance in any California homeowners association. One caveat: I must except consideration of the complicated area of construction defect issues as this article does not address responsibilities related to pursuit of or use of damage awards from developers

flowing from a construction defect claim. And, I want to mention that maintenancerelated cases tend to focus on the actions of boards and whether there was a breach of fiduciary duty or negligence rather than overruling common document provisions. Sometimes it’s easy to interpret the documents, and sometimes it is not. When the governing documents are not clear, the law can step in to provide a definitive answer. Sometimes, the answer is still not clear. Let’s take what should be a simple topic, namely, roof maintenance. Who is responsible to replace the roof? Look in the documents first. What do they say? If the documents require the association to maintain and replace roofs, the association should save for the work and must perform it. If they don’t specifically mention roofs, the next inquiry is: are they part of common area or part of the owner’s separate interest? In a condo, roofs are usually part of the common area. In a PD, they are usually part of the owners’ individual property (lot). To determine ownership, check for definitions of unit in a condo (usually airspace) and residence unit or l o t in a planned development

(usually includes everything on the lot). But, do not stop there because the requirements for maintenance of the roof may not align with ownership. In other words, the association may have responsibility for the roof but not have responsibility for dry rot in the framing of the residence unit, even though both are within the owner’s lot. In Part II of this article, which will appear in the next ECHO Journal, you will find out how such things as The Davis-Stirling Act, negligence and past practices affect the outcome of who fixes what, and how to set policy to avoid the disputes that commonly arise over such things as water leaks that involve both common area and individual units.

Beth A. Grimm is a Bay Area attorney who authors books, writes articles and newsletters, is active in ECHO and other groups that serve the public who live in CIDs. She is frequent contributor to the ECHO Journal and speaker at ECHO seminars. She hosts a website, www.californiacondoguru.com, with free information for homeowners, board members and managers. ECHO Journal | January 2010

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ECHO Honor Roll

About

ECHO Honors Volunteers Tyler Berding 2009 Volunteer of the Year ECHO Resource Panels Accountant Panel Richard Schnieder, CPA 707-576-7070 Central Coast Panel John Allanson 831-685-0101 East Bay Panel Scott Burke, 408-536-0420 Mandi Newton, 925-937-0434 Legal Panel Mark Wleklinski, Esq. 925-280-1191 Maintenance Panel Brian Seifert, 408-536-0420 North Bay Panel Diane Kay, CCAM, 415-846-7579 Stephany Charles, CCAM 415-458-3537 San Francisco Panel Jeff Saarman, 415-749-2700 South Bay Panel Geri Kennedy, CCAM 650-348-2691 ext. 1006 Kimberly Payne, 408-200-8470 Wine Country Panel Maria Birch, 707-584-5123

Legislative Committee Paul Atkins Jeffrey A. Barnett, Esq. Sandra Bonato, Esq. Jerry L. Bowles Joelyn Carr-Fingerle, CPA John D. Garvic, Esq., Chair Geri Kennedy, CCAM Wanden Treanor, Esq.

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January 2010 | ECHO Journal

SF Luncheon Speakers John Allanson Jeffrey A. Barnett, Esq. Tyler P. Berding, Esq. Ronald Block, PhD. Doug Christison, PCAM, CCAM Karen Conlon, CCAM Rolf Crocker, CCAM Ross Feinberg, Esq. David Feingold, Esq. Tom Fier, Esq. Kevin Frederick, Esq. John Garvic, Esq. Beverly Gordon, CCAM Sandra Gottlieb, Esq. Beth Grimm, Esq. Brian Hebert, Esq. Roy Helsing Stephen Johnson, CFP Julia Lave Johnston Garth Leone Nico March Kerry Mazzoni Larry Russell, Esq. Steve Saarman Nathaniel Sterling, Esq. Debra Warren, PCAM, CCAM Steven Weil, Esq. Mark Wleklinski, Esq. Glenn Youngling, Esq.

Seminar Speakers April 25—South Bay Seminar Patrick Falconio John Gill Ann Rankin, Esq. Brian Seifert Steven Weil, Esq. September 19 Central Coast Seminar Jacquie Berry John D. Garvic, Esq. Linnea Juarez Lise K. Ström, Esq.

October 17 Peninsula Fall Seminar Brian Campisi Joelyn Carr-Fingerle, CPA John D. Garvic, Esq. Kerry Mazzoni

Recent ECHO Journal Contributing Authors August 2009 Tyler P. Berding, Esq. Damon Burk Michael Gartzke, CPA Patrick Hendry Tracy Neal, Esq. Judy O’Shaughnessy David C. Swedelson, Esq. September 2009 John D. Garvic, Esq Roy Helsing John Schneider October 2009 Tyler P. Berding, Esq. John D. Garvic, Esq. Geri Kennedy, CCAM Karl Lofthouse Marcia Nylander Dick Tippett November 2009 Ken Bade, PCAM Matt Malone, Esq. Ann Rankin, Esq. December 2009 Sandra M. Bonato, Esq. William S. Erlanger, CPA Lucinda Hoe Marilyn Lincoln Steven S. Weil, Esq.

ECHO What is ECHO? ECHO (Executive Council of Homeowners) is a California non-profit corporation dedicated to assisting community associations. ECHO is an owners’ organization. Founded in San Jose in 1972 with a nucleus of five owner associations, ECHO membership is now 1,525 association members representing over 150,000 homes and 325 business and professional members.

Who Should Join ECHO? If your association manages condominiums or a planned development, it can become a member of ECHO and receive all of the benefits designated for homeowner associations. If your company wants to reach decision makers at over 1,525 homeowner associations, you can become an associate member and join 325 other firms serving this important membership.

Benefits of ECHO Membership • Subscription to monthly magazine for every board member • Yearly copy of the Association Statute Book for every board member • Frequent educational seminars • Special prices for CID publications • Legislative advocacy in Sacramento

ECHO Membership Dues HOA Size 2 to 25 units 26 to 50 units 51 to 100 units 101 to 150 units 151 to 200 units 201 or more units Business/Professional

Rate $120 $165 $240 $315 $390 $495 $425

ECHO Journal Subscription Rates Members Non-members/Homeowners Businesses & Professionals

$50 $75 $125

How Do You Join ECHO? Over 1,800 members benefit each year from their membership in ECHO. Find out what they’ve known for years by joining ECHO today. To apply for membership, call ECHO at 408-2973246 or visit the ECHO web site (echo-ca.org) to obtain an application form and for more information.

Fire Alarm Systems Fire Sprinkler Systems Testing, Service, Design & Installation

Tele-Entry & Access Control Emergency Exit Lighting Automated Gates Fire-Rated & Rollup Doors For Information please call: 650 988-9508 or 888 988-9508 or e-mail info@statcomm.com Lic # 675521 Underwriters Lab #UUFX.S8915 Diamond Certified

Find the Answers to your Questions on Condo Ownership

408-295-7767 or 877-295-FLOW

www.aquatekplumbing.com

Complete Service and Repair Plumbing Copper and CPVC Repipes AquaTek Plumbing, Inc. has been servicing residential and commercial customers faithfully since 1982. Call us today for more information about AquaTek and the full spectrum of plumbing services we provide. An excellent guide to understanding the rights and responsibilities of condo ownership and homeowner associations operation. The question-and-answer format responds to more than 125 commonly-asked questions in an easy to understand style. A great resource for newcomers and veteran owners. Order today from ECHO! Call 408-297-3246 Fax 408-297-3517 Email: info@echo-ca.org ECHO Journal | January 2010

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Maintenance By Richard Tippett

A Tragi-Comedy In Three Acts

How To Get One More Year From Your Roof Or “Our Members Couldn’t Agree...” Act I You discover that your roofs are worn out, but you don’t have the reserves to replace them. Act II Fortunately, you agree on what to replace them with. Unfortunately, you can’t agree on how to pay for the work. Act III It is now too late to plan to do any serious reroofing for the balance of this winter. Even if, without a specific reroofing plan, you could get several competitive bids, you would pay a premium price for the reroofing work because of the time of year. You would certainly not be able to get any guarantee that the work would be completed before spring arrives. It is far better now to plan for reroofing after May. Shift roofing funds from early in this year’s budget to later in the year. For the winter and early spring months retain only enough in the budget for temporary repairs—10¢ per square foot should be more than sufficient. If you have not yet done so, and whether or not you have had serious roof leaks, have the following work done: 1. Clear all roof drains, gutters and downspouts of leaves, dirt and debris. 2. Inspect all flat roofs. Repair all splits and cracks and reseal around vents and at scuppers. 3. Replace or repair any missing shingles, shakes, artificial shakes, tiles or broken flashings. 4. Arrange with roofing repair companies or roofing contractors for 24-hour emergency service throughout the winter. You can locate such companies through your association management company or by looking for contractors who advertise roofing repair work in your local 40

January 2010 | ECHO Journal

telephone Yellow Pages. The ECHO office will supply a list of member roofing contractors. Prior to having any work performed by a roofing firm, your board of directors or management company should do the following things: 1. Ensure that the contractor has a ready supply of roof repair materials, particularly if yours is a single-ply roof or artificial shake roof of any type. If your roof is covered by a warranty, ensure that the repair contractor is approved by the material manufacturer to make repairs under the warranty. 2. Negotiate hourly or per-call, not-to-exceed repair rates. These should not be more than $85 per hour per worker, including materials. 3. Establish the speed of response that you expect from the repair contractor, with penalties for non-performance. 4. Develop a list of names and phone numbers of both your representatives and the contractor’s personnel who are “on call” and responsible for receiving reports of and correcting roof leak problems. Finale Most importantly, get the planning for your reroofing project underway immediately. It takes time to set up the funding, to prepare specifications, solicit bids from qualified contractors, and otherwise prepare to initiate work when good weather arrives. If you don’t, you will be reading this same script one year from now!

Richard Tippett is the principal at ERTECH, Inc., Watsonville, CA. Dick is a member of the ECHO Board of Directors and the Central Coast and the Maintenance Resource Panels.

ECHO Marketplace

Adver tiser Index

The place to find business and professionals for your association Affirmative Management . . . . . . . . .18 American Asphalt . . . . . . . . . . . . . .28

Advertise your business to thousands of association directors in California in the ECHO Journal.

American Management Services . . .10 Angius & Terry . . . . . . . . . . . . . . . . .3 Applied Reserve Analysis . . . . . . . . .22 AquaTek Plumbing . . . . . . . . . . . . .39 A.S.A.P. Collection Services . . . . . . . .9 Association Reserves . . . . . . . . . . .17 Bayridge Group . . . . . . . . . . . . . . . .14 Berding | Weil . . . . . . . . . . . . . . . . .44 Coastal Termite Control . . . . . . . . .16 Collins Management . . . . . . . . . . . .37 Community Association Banc . . . . . .16 Community Management Services . .28 Compass Management . . . . . . . . . .11 Condominium Financial Mgmnt . . . .14 Cool Pool Service . . . . . . . . . . . . . .22 Cornerstone Community Mgmnt . . . . .8 Draeger . . . . . . . . . . . . . . . . . . . . .11 Ekim Painting . . . . . . . . . . . . . . . . .31 First Bank Association Bank Srvcs . .30 Flores Painting . . . . . . . . . . . . . . . .29 Focus Business Bank . . . . . . . . . . .10 Helsing Group . . . . . . . . . . . . . . . .14 Hill & Company. . . . . . . . . . . . . . . .41 M&C Association Services . . . . . . . .29 M. L. Nielsen Construction . . . . . . .30 Massingham and Associates . . . . . .31 Pelican Management Group . . . . . . .16 PML Management Corp. . . . . . . . . .39 Pollard Unlimited . . . . . . . . . . . . . .31 Pro-Craft Builders . . . . . . . . . . . . . .18 Professional Association Service . . .18 R. E. Broocker Co. . . . . . . . . . . . . .22 REMI Company . . . . . . . . . . . . . . . .17 Real Estate Property Management . .24 Saarman Construction . . . . . . . . . . .9 Scuba Pool Rerpair . . . . . . . . . . . . . .8 Statcomm . . . . . . . . . . . . . . . . . . .39 Steve Tingley Painting . . . . . . . . . . . .2 Varsity Painting . . . . . . . . . . . . . . . .33

ECHO Journal | January 2010

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North Counties Seminar Full-Page Ad

Sacramento Seminar Full-Page Ad

Condominium Conversions Did You Get What You Paid For?

Condo conversions are not new condominiums. They are older rental apartments that were converted to condos. So, what’s wrong with that? Nothing, if the financial plan that came with your condo is up to the task of maintaining a building with 20-30 years of deferred maintenance. How do you know? You probably don’t unless someone

has taken a close look at the homeowner association’s budget and compared it to the actual condition of the buildings. The fact is, very few condominium conversions were sold with repair budgets that are adequate to meet the needs of the project. What does this mean to you? If the budget is inadequate, it will mean either increased homeowner assessments or a gradually deterio-

rating condominium project. Or both. In either case, you didn’t get what you paid for. If you’d like to know the truth now about what you bought, call us. If you want to wait and see what happens, ok, but either way, we’ll be here when you need us. Berding | Weil, LLP 3240 Stone Valley Road West Alamo, California 94507 925-838-2090 www.berding-weil.com

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