Sunday, December 12, 2010

Maintenance Manuals for New Associations: How Much Maintenance is enough?

by Tyler P. Berding and Steven S. Weil
(Editors note: This article was originally published earlier this year and prompted the question in the post below)
Many of the statutes in the Davis-Stirling Common Interest Development Act (“Act”) address common area maintenance and the calculation and levying of assessments needed to maintain and reserve for that maintenance. Directors and managers face the challenge of implementing these statutory directives, a task especially difficult during an economic downturn. Decisions have to be made: what must be repaired, what can be deferred; should we replace a component with a “short term” fix or with one that is more costly but will last longer? When the CC&Rs say common areas must be maintained in “First Class condition” is that different than requiring simply that common areas “be maintained”? Answering these and similar questions can affect habitability, enjoyment of the project and property values.
For new developments, the issues are even more complex. Title 7 of Division 2 of the California Civil Code (“Title 7” which, before its enactment, was called “SB 800”) creates new standards and special statutory maintenance requirements for residential common interest developments constructed after 2003.1 These requirements, which can require compliance with a project “Maintenance Manual,” pose special risks for managers and directors because the failure to comply could reduce the recovery available to associations in construction defect claims or create liability to members or others if the new maintenance standards are breached.
The association's governing documents can add yet another dimension. Typical CC&Rs for new projects often contain specific requirements that the board must follow, including complying with the provisions of the maintenance manual and conducting all necessary inspections specified in such manuals.
Most maintenance manuals are detailed, but the “maintenance” that is required usually consists not of repairs, per se, but rather periodic inspections of various components. The ones that we have reviewed have few actual specifications for work to be performed for which contractor's bids could be obtained. Nevertheless, must the manuals be followed completely and if they are not, what is the consequence? This article is intended to help boards and managers navigate the liability risks created by the new maintenance standards contained in the manuals.
Click the title link above to read the rest of this article...