“Maintenance and Safety in Community Associations” – KSN attorney Jason Orth discusses the maintenance and safety factors community association boards should follow when evaluating the association’s common elements. He also reviews building codes, reserves, document retention, and other legal concerns. (19 mins.)
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Episode Transcription
Nikki: You’re listening to the KSN podcast and today we’re talking about maintenance and safety in community associations. Welcome to the KSN podcast where you’ll hear from KSN attorneys as they share their experience and insight on legal issues surrounding community associations, collections, property tax appeals, and landlord tenant law. I’m Nikki and today we’re joined by KSN attorney Jason Orth. Jason concentrates his practice in the area of construction related litigation, as well as commercial litigation. Hi, Jason, welcome to the podcast.
Jason: Hi Nikki. Thanks for having me here. It’s great to be here.
Nikki: Our topic today is maintenance and safety within community associations and Jason, we know that board members have a duty to maintain and improve property values within their condominium, homeowner and townhome associations. So, how does a board satisfy that obligation?
Jason: Well, you know what, Nikki, that’s a very good question, especially in light of current topics that are happening with associations all over the country. In general, there’s three things that a board must do to satisfy its obligation and these three things are that the board must address upkeep and infrastructure concerns that impact the health and safety of community residents. Number two, adequately inform themselves as to the condition of the property and any common elements or common areas. And number three, where appropriate, seek the advice of professionals, such as engineers, architects, and contractors, to determine what work, if any, needs to be performed.
Nikki: All right, Jason, today let’s discuss three maintenance and safety factors that should be considered by board members, community leaders, and property management when they exercise their duties. So, starting with number one, what can you tell us about looking for warning signs?
Jason: That’s probably the easiest thing for a board to do because they’re the ones who are living at the property, they’re the ones who are living with the building every single day. So, there’s certain safety red flags within the community that can originate from an emergency or a natural disaster. For instance, a flood or in certain parts of the country, earthquakes or hurricanes, in this area, a tornado. They can also be caused by construction defects, climate conditions, and the effects of time. One of the largest effects on buildings is the age of the building and the damage that can be done by age over time. As properties age, they can show signs of distress and this may include but is not limited to mechanical components that are not fully functional or have reached end of life and this includes air conditioning, boiler systems, water and plumbing systems and the like, corrosion and salt water oxidation, compromised retaining wall, groundwater or storm water buildup, dry rot in wooden parts of the building and foundation issue.
Nikki: And so, if a board member or anyone in the community were to notice any of the issues that you just listed and discussed, what steps do you recommend for them to take next?
Jason: The first thing that must remembered is that the board has a lot of resources available to it and one of those resources is the professionals that it surrounds itself with and those professionals include property managers, legal counsel, licensed architects, and engineers and trade contractors, such as electricians, elevator maintenance companies, fire prevention companies, plumbers, HVAC companies, mechanical companies, et cetera. All these people can provide valuable insight to the board and advise them as to what steps, if any, need to be taken and if what they are identifying as a problem is really a problem that needs to be addressed. Now, all of these professionals can identify and address potential issues with the building, including building code violations, construction issues, including construction defects from the original building construction and construction have to do with capital improvement, deferred maintenance issues, historic building standards, inspections of the mechanical systems in the building in general, municipal regulations, permit requirements, re-certifications, structural engineering and safety violations. Now, these professionals often prove necessary to assist the board with this decision-making process. Additionally, these resources can assist the board with preparing budgets and setting reserves for the community. A board needs to know what the condition of its building is before it can prepare a budget and set reserves, and these professionals will help the board in that manner.
Nikki: I mean, you’re absolutely right, Jason. You need to be able to plan a budget based off of how the condition of your building is. Associations are always shying away from doing special assessments. So, if they’re taking part and they’re doing their duties, and they’re making sure that the building is up to code and everything, they can better plan for that. So, let’s say an association found an issue, they go ahead and they contact a professional to fix it; can they just forget about it and then move on then?
Jason: Absolutely not. A board is now permitted to [Inaudible: 05:12] its responsibilities. Once a board knows about a problem and it has contacted the professional, it needs to follow through on what the professional says needs to be done. In short, board members are going to want to stay proactive. A community should have a plan to monitor and evaluate the condition of the property on a regular basis. Additionally, certain municipalities like Chicago, for example, have mandatory inspections, such as critical inspections in the building facades and other portions of the community that must be conducted at certain intervals and a board can’t just assume that a building is in good condition because everything looks good or because no one is reporting any problems. It needs to rely on these professionals and it needs to have a plan in place for making sure that the building from top to bottom, inside out is in good condition and in a safe condition.
Having the schedule in place for these inspections will help prevent the community from running a file of the inspection requirements set forth by the governmental entities and by the manufacturer portions of the building, such as HVAC and plumbing. In evaluating a community’s upkeep requirements, it is important to keep in mind that there have been significant changes in new construction, building materials and technology. Additionally, building codes are constantly evolving. For instance, in Chicago, there was a large issue with buildings using EIFS or stucco on the exteriors of their buildings. Developers like to use this because it is inexpensive and easy to apply but over time it was determined that those materials are not proper for the Northern climates. It was more appropriate for places like Arizona and Florida and the warmer climates. So, you had all these buildings in the city that had stucco and EIFS installed that just was not appropriate and was not water tight. These buildings needed to deal with this issue by hiring structural engineers and by hiring other professionals to advise them how to remove the EIFS and how to apply a new material that would make the building watertight. Additionally, in certain instances, the buildings were able to sue the manufacturers of the EFS products and the parties who installed them, including the developers. So, in that instance, it was important for a board to know that not only did it have a problem with the EIFS, but then it also had a lot of avenues to resolve those problems such as warranty claims and claims against the developer and the contractors who provided it.
Now, a lot of times you see these board members and they tend to get daring headlights or overwhelmed. They’re just normal people who are volunteers to try and help the building. These people are not experts and everyone acknowledges that they’re not experts. Everyone knows that board members are not going to be aware of all the revised building codes or the due diligence inspection and reporting standards that go under scrutiny after a disaster, such as a building collapse or a flood, but a board shouldn’t allow itself to be paralyzed by the often-daunting task of keeping a building in good condition and making sure that it is safe. That is why the professionals are out there. So, the boards need to take advantage of the professionals that they surround themselves with. Now, it’s inevitable that all the buildings and properties will have maintenance issues. However, newly constructed communities are not immune from maintenance issues. For instance, there’s a lot of buildings where their facades soon after they are installed, start to fail for one reason or another.
Now, you weren’t expecting a newly installed facade to start to fail, but it happened. So, the board needs to be prepared to deal with issues from day one. It can’t just rely on a building being new and assume that nothing is going to happen to it. Additionally, high-rise condominium and apartment complexes continue to add amenities such as electric car charging stations, fitness centers, pools, rooftop decks, green spaces, etcetera. All of these areas need to be kept well maintained and the technology that’s necessary to maintain these areas needs to be kept up to date and maintained. A board needs to use the professionals it surrounds itself with in order to do this. Now, staying proactive also minimizes the odds of having unforeseen circumstances arise, whether you live in a downtime condominium, or a sprawling suburban HOA, board members must preemptively plan and deal with repair and safety issues. Fears of increasing assessments or levying special assessments can lead to underfunded reserves. Deferred maintenance can discourage sales, however, ignoring the warning signs and poor planning can create a very costly crisis. A board cannot just be dictated by its bottom line in the cost that could be associated with maintenance, repair and replacement. A board must take into account the safety of the building and the safety of the persons in the building and ultimately that is what its fiduciary duty is, is to protect the building and those people.
Nikki: You hit the nail on the head there, Jason. The safety of everybody in the building and taking care of any issues that arise. Jason and I are going to take a quick break, but when we get back, we’ll continue discussing maintenance and safety measures in community associations.
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Nikki: And we’re back. I’m here with attorney Jason Orth and we’re discussing maintenance and safety issues in community associations. So, Jason, before the break, you mentioned that associations should remain proactive in maintaining a plan to monitor and evaluate the condition of the property on a regular basis and as a part of being proactive in following up an inspection and building codes, for example, that you had mentioned, does this include any records that govern the association?
Jason: Absolutely. A board needs to have a solid paper trail and record of what it has done and what it has considered needs to be done in making this decision. Associations want to ensure that they are safeguarding their record. Governance of community associations requires a great deal of documentation and these documents include budgets, meeting minutes, owner information, voting records, and insurance policies and these represent just a small sample of the records that a board must maintain and archive. Now, there’s certain documents that are related specifically to the maintenance and safety of a building and some of the maintenance and safety documents that should also be safeguarded are designs and blueprints. Typically, you get those from the developer at turnover or from the contractor during capital improvements, permits, permit applications and permit drawings, those should all be maintained as well. Surveys of the property, construction documentation and that includes contracts, bids, proposals, change orders, any emails with your contractors or subcontractors sign offs at the end of the process, payout information checks given to the contractors and subcontractors, as well as any other warranties and documents that the contractor gives you.
Inspection reports; for instance, if you have an engineer come out and take a look at your building, you’re going to want to maintain all those email communications and any reports that a professional give you just so you have a paper trail to substantiate what the consultant told you. And so, that future boards also know what’s already been inspected and what that inspector or consultant had recommended to be done. Structural audits are also very important for that same reason. Repair, replacement and restoration records, that’s important because the association wants to know when the work was done, when products were installed and who did that work. This will help them make warranty claims and it will also help them plan for repair and replace them down the line when they’re preparing budgets and reserves. Civil violations of fines should also be kept and maintain so that the association can dispute any issues that may arise in the future with the city or if a village states that some work wasn’t done, you will have the records to show that the work was done and you will be able to show that to the inspector to address their concerns.
Reports and communications from consultants and professionals, we touched upon that. Save all your emails, reports, letters, anything that you have from your consultant or professional, save that and make sure that is kept by the board for future use. Information regarding claims made to insurers and lastly communications with owners and residents regarding conditions in the community. You’re going to want to have a good solid record of complaints made by unit owners and then what was done by the board in response to that complaint.
Nikki: And so, Jason, I mean safeguarding records and maintaining robust document retention policy with all of these documents, they go hand in hand, right?
Jason: Absolutely, yes. A well drafted document retention policy assists with association operations and record keeping of the organization. It exhibits transparency and allows the board members to be more prepared in the event of board turnover, which happens all the time, unit owner issues, litigation, fines, and Federalist statute and local government requirements. Now, the Association’s legal counsel can help the association in drafting a document retention policy, but drafting the document retention policy is only half the battle. Once the document retention policy is drafted and the board has it, it needs to be followed and it can’t just be followed by this year’s board or next year’s board. It has to be followed by every board and as long as every board is consistent and they keep these records in locations where they could be easily found either in paper or electronically, then the board is going to avoid these issues when they arise and they’re starting to look for things and can’t find them. I would recommend that a board to the extent possible keeps them in two formats, both paper and electronic, and that the Association’s secretary should have a copy of all these records and then hand them off to the next secretary when there’s a turnover on the board and that will also eliminate the loss of documentation that sometimes occurs when you change property management companies.
Nikki: I mean, yes, Jason, as much as we talk about, you know, there’s board turnover quite frequently, being able to have those documents readily available in one or two formats and keeping them up to date and being able to pass them along, definitely will just be setting the next board up for success and it allows them to continue to keep up with the document retention policy and keeping the association legal and making sure that everything is followed and the safety of everybody that’s living there is being considered. So, Jason, before we go today, do you have any final recommendations for our listeners?
Jason: Yes. I cannot help, but urge that these boards must remain proactive. They must proactively review documents with legal counsel on a regular established basis to ensure that the association has correct, up to date information. Just remember the more current and up to date you are, the better situated your association and your board is going to be to deal with any issue that may arise in the safety of the building in the future.
Nikki: That was KSN attorney Jason Orth. Jason concentrates his practice in the area of construction related litigation, as well as commercial litigation. KSN is an experienced legal resource, ready to provide you with quality advice and exceptional service. We look forward to demonstrating how we have earned the trust of thousands of clients over the past 35 years. If you’d like to reach Jason or anyone of KSN’s experience attorneys, please call 855-537-0500. You can also visit ksnlaw.com and complete the contact form to send us a message. Thanks for listening.
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Please note the material contained on the KSN Podcast is for informational purposes only and does not constitute legal advice. No attorney-client relationship is established by your review or receipt of the information contained on the KSN Podcast. You should not act on the information discussed on the KSN Podcast without first obtaining legal advice from an attorney duly licensed to practice law in your State. While KSN has made every effort to include up-to-date information on The KSN podcast, the law can change quickly. Accordingly, please understand that information discussed on the podcast may not yet reflect the most recent legal developments. Material is not guaranteed to be correct, complete, or up to date. KSN reserves the right to revise or update the information and statements of law discussed on the podcast at any time, without notice, and disclaims any liability for your use of information or statements of law discussed on the podcast, or the performance of the podcast generally. The KSN Podcast may be considered advertising in some jurisdictions under applicable law/s and/or ethical rules/regulations. © 2021 Kovitz Shifrin Nesbit, A Professional Corporation.