June, 1999 - California - Professional
property managers face numerous and time sensitive tasks when
their associations are faced with construction defect claims.
The following outline will provide a tangible
understanding of the time involvement of management company
executives and staff. Although
management strives to assist with each of these activities, most
fall outside the scope of the standard contract with an
association and are subject to additional costs to the
association. Contracts
should be modified to address these added costs due to the
increasing number of claims being filed every year.
Initial
Recognition of Construction Defects:
-
Identification
of defects vs. maintenance
-
Repair
invoices and coordination
-
Maintenance/repair
requests
-
Correspondence
from homeowners regarding repairs
-
Meetings
with affected homeowners
-
Phone
calls/memos to board members regarding trends
-
Additional
site inspections
-
Pull
archived documents for attorneys
-
Pull
and permit inspection of homeowners association documents
1. Minutes
2. Correspondence with board of directors, etc. per
list of documents.
-
Permit
and schedule preliminary site inspection by construction
consultants
-
Attend
extra board of directors meetings regarding initial and
final presentation of results
-
Coordinate
disclosures to homeowners with counsel.
Selection
of Defect Counsel:
-
Recommendations
to board
-
Interviews
-
Selection
-
Contract
negotiations
-
Notification
to homeowners
Pre-litigation
requirements by legislation:
-
Follow
timetable and guide board of directors
- Meetings
with developer representatives
-
Notification
to homeowners regarding options
-
Meetings
with homeowners regarding options and builders offer, if any
Litigation:
-
Increased
time at monthly board meetings and extra meetings
-
Special
homeowners association meeting to discuss surveys and
pre-litigation matter
-
Educating
new board members and officers
-
Telephone
contact with board
-
Pre-deposition
and deposition
-
Expert
invoices and reconciliation
-
Obtaining
and investigation of outside financing for litigation
-
Proxy
solicitation for loans
-
Attend
mediations and mandatory settlement conferences
-
Pre-trial
preparation
-
Trial
attendance
-
Calls
from prospective buyers, sellers, real estate agents,
special escrows.
-
Additional
accounting time to review invoices, pay vendors, negotiate
terms and work with consultants
-
Make
mandatory loan payments and manage cash flow.
Reconstruction:
-
Work
with/interview one to three qualified reconstruction experts
-
Prioritize
repairs for settlement purposes
-
Consider
and discuss settlement offers (net to HOAs)
-
Set
up investment of settlement monies; interview investment
advisors and selection
These
duties are not anticipated as part of regular management
contracts and vary from association to association.
Therefore, all manager involvement cannot be predictably
quantified in advance. Association
boards should be prepared to look towards their management team
as an integral part of the litigation process and an important
service provider to their community.
Associations should be prepared to pay for these
additional services.
Depending
on which law firm the association chooses to guide them through
construction defect claims, the time noted above can increase if
the firm does not have uniquely qualified staff members, such as
construction consultants or client services and accounting
departments, to help alleviate additional requirements often
left to the manager.
© Copyright 2008 The Miller Law Firm. All rights Reserved.
If you experience problems or have questions, contact us at Info@ConstructionDefects.com.
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