8 Mar 2016

With Great Power Comes Great Responsibility Part 1 of 4

Posted by Orlando HOA Services

Imagine this: You were sleeping soundly before drips of water falling down woke you up. Apparently one of the water heaters inside the building leaked and damaged the surrounding units. Who is responsible? To clear things up, we’ll┬ástart a four-part series to help you understand who is liable for what part.

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This is one of the most frequently asked questions involving community associations. It can come up at 2 a.m. after a dishwasher flood has damaged four units; when a homeowners association is re-roofing a building and wants to demolish people’s decks to gain roof access; when an owner’s uninsured contractor makes a hole in a pipe and causes a flood; or when mold is found as a result of leaks in common areas and owners’ failure to ventilate units properly.

The question has no easy answers and usually generates heated emotions. Here are some general principles that may help you sort out the answer.

 

What Do the Governing Documents Provide?

The first place to look is in the HOA’s Declaration of Covenants, Conditions and Restrictions (CC&Rs). The most helpful provisions will usually be the following:

Definitions – Is the area in question common area, exclusive use common area or a separate interest? (In a condominium, the separate interest is a unit. In a planned unit development, it’s the lot and the residence.)

Division of Property – This section often explains who owns and maintains various areas of the development.

Powers and Duties of the Association – See what the CC&Rs say about the HOA’s maintenance responsibilities.

Owner Maintenance Responsibilities – See what it says about the owner’s maintenance responsibilities.

Reviewing these provisions will answer a high percentage of questions about who must pay for various items. If your CC&Rs are unclear about specific areas, this should be addressed when you revise your governing documents. The attorneys who prepare the revisions usually don’t know nearly as much about your building as you do; so be sure to bring any ambiguities about this subject to the attention of the attorneys who are preparing the revisions.

Try Looking at Civil Code Section 4775

After you have looked at your governing documents, the next step is to check Civil Code Section 4775. That code section is part of the Davis-Stirling Act, and it currently states:

Unless otherwise provided in the declaration of a common interest development, the association is responsible for repairing, replacing, or maintaining the common area, other than exclusive use common area, and the owner of each separate interest is responsible for maintaining that separate interest and any exclusive use common area appurtenant to the separate interest.

This is one of the few provisions of the Davis-Stirling Act that does not prevail over contradictory provisions of the CC&Rs. But if the CC&Rs don’t “otherwise provide,” then Civil Code Section 4775 controls, except as discussed later in this article.

A bill was signed by Govenor Brown in September of 2014 that will significantly alter Civil Code Section 4775. While the new law will not go into effect until January 1, 2017, it’s important that your HOA is aware of the coming changes to prepare their CC&Rs to accomodate the law. Look to ECHO to provide tools and material to best help your HOA through the process.

Read more about the changes to Civil Code Section 4775

http://www.echo-ca.org/article/how-determine-maintenance-responsibility-hoas

Do you need an expert to keep your self-managed condominium association fiscally healthy? Orlando HOA Services can help you set up good financial practices that will keep your association financially strong well into the future. Contact us at JR@Orlando-HOA.com or check out our website at www.Orlando-HOA.com.


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