Focus Magazine - May/June 2017

May/June 2017

L.A.’s Premier Source of Information for Community Associations

I Can See Clearly Now— The Rain is Gone

Save the Date:

Bowling Tournament July 28

• Drought-Busting Rains • The Wettest Season in Years • And Now to Repair the Financial Damage

Bowling Tournament

Friday, July 28, 2017

Bowlmor

3545 E. Foothill Blvd.

Pasadena, CA 91107

6:00 p.m. Registration 6:30 p.m. Tournament

No Host Bar FREE PARKING & hors d’oeuvres Team of 4 $400 Single Bowlers $100 pp Spectators $ 50 pp

Come and be part of a team…

No one is a serious bowler…

Just out to have a good time with industry friends.

Current Sponsors SOCKS

NAPKINS

Rose Paving Company, Inc.

Guard-Systems, Inc.

SOUVENIR PHOTOS

BUFFET

Nu Air Services, Inc. Park West Landscape Management

Alliance Association Bank

2017 BOARD OF DIRECTORS OFFICERS Joanne Peña, CMCA®, AMS®, PCAM®, President Horizon Management Company, 310-543-1995 Greg Borzilleri, President Elect PCW Contracting Services, 949-285-7802 Donald Campbell, CMCA®, AMS®, PCAM®, Vice President Cabrini Villas HOA, 818-504-9600 Sascha Macias, CMCA®, AMS®, PCAM®, Secretary FirstService Residential, 310-574-7426 Meigan Everett, PCAM®, Treasurer Gold Coast Property Pros, 424-238-2333 DIRECTORS Teresa Agnew Roseman & Associates APC, 818-380-6700 Angel Fuerte FRESHCO Painters, Inc., 626-482-2698 Jose H. Glez, CMCA®, CIRMS™ Cline Agency Insurance Brokers, 800-966-9566 Diane Hilliard, CCAM®, CMCA®, AMS®, PCAM® Ross Morgan & Company, Inc., AAMC, 818-907-6622 Neda Nehouray, CMCA®, AMS® HOA Organizers, Inc., 818-778-3331 Dick Pruess Castlegate HOA, 626-584-0000 Lynn Ruger Warner Club Villas HOA, 818-703-7090 Lisa Tashjian, Esq. Beaumont Gitlin Tashjian, 866-788-9998

CHAPTER EXECUTIVE DIRECTOR Joan Urbaniak, MBA, CMCA®

2017 COMMITTEE CHAIRS COMMUNITY OUTREACH Miranda Legaspi, MBA, Platinum Security, Inc. Angelique Madrigal, Ross Morgan & Company, Inc. AAMC EDUCATION Linda Healey, CCAM®, PCAM®, The Californian on Wilshire Gregg Lotane, CCAM-HR®, PCAM®, The Wilshire FINANCE Michael Lewis, CMCA®, AMS®, PCAM®, Concept Seven, LLC GOLF TOURNAMENT Ryan Dudasik, Whitestone Painters Katie Mokhlessin, BrightView Landscape Services HOA MARKETPLACE Alan Denison, Elements Landscape Management LEGISLATIVE SUPPORT Matthew Plaxton, Esq., Tinnelly Law Group MEDIATION SERVICES Matthew Grode, Esq., Gibbs, Giden, Locher, Turner, Senet & Wittbrodt, LLP PROGRAMS/LUNCHEONS Brian Moreno, Esq., CCAL, SwedelsonGottlieb Neda Nehouray, CMCA®, AMS®, HOA Organizers, Inc. PUBLICATIONS Matthew Gardner, Esq., Richardson Harman Ober PC FOCUS Magazine Matthew Gardner, Esq., Richardson Harman Ober PC Membership Directory Stephen S. Grane, Alante/MCS Insurance Services Web Site Lynne Collmann, CMCA®, AMS®, Savoy Community Association SATELLITE PROGRAMS Ruth Moffitt, CMCA®, AMS®, PCAM®, Valencia Management Group AAMC® Craig Phillips, CCAM®, CMCA®, AMS®, PCAM® International Tower Owners Assn.

SOCIAL Leslee Jones, Alliance Environmental Group Angelique Madrigal, Ross Morgan & Company, Inc. AAMC SOCIAL MEDIA Teresa Agnew, Roseman & Associates APC Lindsay Morstad, ASR Restoration & Construction WINE NIGHT Katy Krupp, Fenton, Grant, Mayfield, Kaneda & Litt, LLP Jolen Zeroski, CMCA®, Union Bank HOA Services

CAI-Greater Los Angeles Chapter

NEWSWORTHY 4 8 10 12 14 20 22 24 26

Drought-Busting Rains The Wettest Season in Years Recent Rains Bring Pest Population When It Rains, It... Well, You Know Heavy Rains and their Impact on Association Insurance Claims Winter of 2016-2017 News from Sacramento And Now, to Repair the Financial Damage Developer and Contractor Liability for Water Intrusion Problems

CHAPTER UPDATE 2 Note from the Editor’s Desk 3 Message from the President

NOTEWORTHY 11 Heal the Bay 2017 13 Uncork and Unwined at the Bandshell (Wine Tasting) 15 New Member Reception 16 Highlights from the Golf Tournament

FYI 29 30 31 32 32 32 33

M-360 National Course Membership News CAI Legal Forum: California Communities 2017 Upcoming Events Advertisers Index Advertising Information 2017 Recruiter Contest

This publication seeks to provide CAI-GLAC’s membership with information on community association issues. Authors are responsible for developing the logic of their expressed opinions and for the authenticity of all facts presented in articles. CAI-GLAC does not necessarily endorse or approve statements of fact or opinion made in these pages and assumes no responsibility for those statements. By submission of editorial content to CAI-GLAC, the author acknowledges and agrees to abide by the editorial and policy guidelines. Copyright © 2017.

All rights reserved. Reproduction in whole or in part without written permission is prohibited. CAI is a national, not-for-profit association created in 1973 to educate and represent America’s residential community association industry.

National Office Address: 6402 Arlington Blvd. #500, Falls Church, VA 22042 Tel: 888/224-4321 • Web Site: http://www.caionline.org

On the Cover

Muir Terrace Homeowners Association Monterey Hills Courtesy of Ferris Painting, Inc.

Stay Connected:

130 N. Brand Blvd., Ste. 305 Glendale, CA 91203 Office: 818-500-8636

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1

coverage is important before damage occurs, not when you are arguing with your provider about repairs. Take this opportunity to evaluate whether your policy meets your needs and provides adequate protection.

T

Pamela De Armas provides the counter-point on insurance: from the homeowner perspective. Since homeowners have a completely separate policy, it is important for communities to make it clear what the Association covers. That way, homeowners can make sure their coverage helps them sleep well at night.

Note

Sue Nelson takes a look at how to repair your Association’s finances after a damaging storm and rainy season.

From reserve reallocation to increased operating expenses, managing the aftermath of stormy season is more than repairing physical damage. Sue offers some thoughts on how to plan and prepare for this upcoming year.

he last few years have been a roller coaster of weather.

From droughts to snowpack, floods, and mudslides, the dramatic changes in conditions force our communities to re-evaluate their budgets. In this issue, we wanted to provide a few views on how to prioritize spending and plan for a different year.

from the Editor’s Desk

First, David Rauch and Mark Adams take us through the unexpected rainy season. You may see some of your challenges reflected in their pictures.

They identify a few areas that may have seen damage after heavy exposure and settling. They also provide some tips on how to approach the maintenance checklist, and where to turn for help.

Michael Ayala talks specifically about the challenges that landscaping faces.

The seesaw of drought and flood can significantly impact how our communities address re-planting and irrigation. Mike reminds us to that there will still be issues lurking beneath the surface, so don’t assume the rain solved all of your landscaping challenges.

While the rain was certainly needed, not all of the moisture brought relief.

Isaac Camacho lays out some increased complaints you should expect from community critters. Rain brings new food sources, and new damage to structures that can encourage access to your community.

Anthony Menke shares a few thoughts on insurance coverage. Thinking about

In our News from Sacramento, based on AB690 (a live bill in Sacramento), Sarah Sapien dives into an explanation about the confusing world of escrow fees. Buyers often complain about the number of fees tacked on, so this article can help untangle the issues, and provide managers and boards with the answers from sellers and your new homeowners.

Richard H. Levin gives us the legal perspective on how to assess the liability for certain water problems. It makes sense to investigate whether water damage results from the rain itself, or from previous maintenance or repairs. Work with your vendors and boards to identify damage and eliminate defect concerns.

Enjoy the information, and enjoy your summer!

Warm regards, — Matthew Gardner, Esq. Editor

CAI-GLAC does not necessarily endorse or approve statements of fact or opinion made in these pages and assumes no responsibility for those statements. Authors are responsible for developing the logic of their expressed opinions and for the authenticity of all facts presented in articles.

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www.cai-glac.org | May/June 2017

2017 CAI-GLAC Super Sponsors Platinum

Accurate Termite & Pest Control ALLBRIGHT 1-800-PAINTING Alliance Association Bank Critter Busters, Inc. Ferris Painting, Inc. Fireplace Solutions The Chimney Sweeper Guard-Systems, Inc. Hi Tech Painting & Decorating, Inc. Kasdan Lippsmith Weber Turner LLP Pacific Western Bank Payne Pest Management Preferred Commercial Painting, Inc. ProTec Building Services Select Painting & Construction, Inc. Sherwin-Williams Paint Silicon Beach Insurance Services Steven G. Segal Insurance Agency, Inc. Union Bank HOA Services Whitestone Painters Gold Beaumont Gitlin Tashjian Behr Paint Corporation Best Alliance Foreclosure & Lien Services Fenton, Grant, Mayfield, Kaneda & Litt, LLP McKenzie Rhody, LLP MeterNet Sub-metering & Billing Solutions Mutual of Omaha Bank/CondoCerts SKY Painting Steve Little Insurance Agency SwedelsonGottlieb Tinnelly Law Group Vista Paint Corporation Silver

American Heritage Landscape Animal & Insect Pest Management, Inc. ASR Restoration & Construction Association Reserves, Inc. Benjamin Moore & Co. BrightView Landscape Services CertaPro Painters of Pasadena CertaPro Painters of Sherman Oaks Cline Agency Insurance Brokers Fenceworks, Inc. FRESHCO Painters, Inc. General Pavement Management, Inc. Miller Law Firm NuAir Services, Inc. Park West Landscape Management Rose Paving, Inc. Reserve Studies Incorporated SAX Insurance Agency Securitas Security Services USA, Inc. WICR Inc. Decking & Waterproofing Wolf, Rifkin, Shapiro, Schulman & Rabkin, LLP

Bronze

Association Lien Services Bentley Community Management, Inc. Berding & Weil, LLP Design Build Associates Master Property Improvement Co., Inc. Oakridge Landscape Poindexter and Company, CPAs R.E.A. Advisors, Inc. We thank our 2017 sponsors who have made a substantial contribution to ensure our continued success this year.

Contact the Chapter Office at 818-500-8636 to sponsor a program or an event.

CAI-Greater Los Angeles Chapter

Message

FROM THE President

I

visited Carlsbad CA in early April, and the Flower Fields were in full bloom and more spectacular than ever due to our recent rains. As they say, April showers bring May flowers, and if you have taken a drive up or down the coast recently, you have undoubtedly noticed that wild flowers are blooming in abundance, turning hillsides a vibrant green with splashes of color—a gorgeous sight to see!

The resort where I was staying in Carlsbad had construction going on that appeared to be rain-related. Planters had been excavated, exposing large area drains that most likely had backed up due to tree root invasion, flooding the planters. The restaurant across the street from the resort, and a number of shops in the quaint downtown area, were also in the middle of repair projects that appeared to be rain-related, with roofs and windows being repaired/replaced. As desperately as Southern California needed the rains we experienced this winter to

pull us out of a serious drought, the damage those rains caused is still evident in badly-cracked and potholed streets, tarped roofs, and the type of construction that I observed in Carlsbad. Needless to say, our winter rains have made for a busy spring for our community association managers and service providers, and the construction projects I have described probably sound all too familiar to many of you.

CAI’s National Conference was held at Caesars Palace in Las Vegas May 3-6, and CAI-GLAC was honored with an Achievement Award for its Coaching to Credentials: A Manager Mentoring Program. Congratulations to Anda Bewhite and the Education Committee for the creation of the Coaching to Credentials program, which pairs seasoned managers holding the PCAM® designation with newer managers to guide them on their “Path to PCAM.” And congratulations to the following of our manager members who attended the Conference and were formally inducted into the elite group of managers who have earned the Professional Community Association Manager (PCAM®) designation: Sascha Macias, FirstService Residential Michael Sukey, The Promenade Owners Association Dawn Suskin, Playa Vista Parks & Landscape Corporation Their commitment to our industry and the time, energy, skill and experience required to successfully complete the challenging coursework necessary to achieve the PCAM® designation is to be applauded.

With summer approaching, there are several Chapter events I want to remind you of: our Super Heroes Bowling Tournament on Friday, July 28, and Uncork and Unwined wine tasting on Saturday, August 19. Check your email for e-flyers with more information.

— Joanne Peña , PCAM® 2017 Chapter President

To learn more about CAl’s newest service and how mediation can benefit you, call the Chapter Office at 818-500-8636.

CAI-Greater Los Angeles Chapter

May/June 2017 | www.cai-glac.org

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Garage Flooding lll By David Rauch and Mark Adams

Assessment and Prevention Plan When wind-driven rains hit this past winter ProTec, along with many general contractors and roofers in Southern California, were inundated with leak calls and emergency building repairs. The backlog of problems has been severe; we’re still circling back and making repairs to buildings that sustained leaks during last winter’s drought-busting rains.

The most common problems that resulted from these heavy winter rains were roof and building leaks. But there were many other types of building/common area problems caused by the heavy rains. Problems included: zz Tremendous number of roof leaks due to gutters not working zz Many interior and exterior electrical shorts from water intrusion zz Roof gutters overflowing due to clogged gutters and downspouts zz Gutters installed at tile roofs were undersized (too small) and exposed during heavy rains zz Drainage problems: zz Garage sump pump failures or line clogs zz Elevator pit sump pump failures zz Garage flooding (see picture) zz Residential (first floor) flooding zz Concrete drainage ditch failures zz Area drains clogged zz Parking lot drain-grate obstructions zz Erosion problems zz Fallen trees on buildings (see picture)

zz Fallen fences zz Underground electrical vaults submerged under water and shorting zz Scuppers on balconies clogged and flooded downstairs units zz Believe it or not – lightning struck the rebar in a block wall and exploded it If your community doesn’t have a preventive maintenance program, you probably paid a premium price dealing with the on-going leaks and the resultant building repairs. And, your community manager worked overtime to keep all your members safe and dry through the tarping, sand-bagging, and the subsequent repairs.

If you do have a preventive maintenance program, you were most likely prepared for the rains. A building maintenance program provides a maintenance technician who works one or Continued on page 6

Fallen Trees on Buildings

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CAI-Greater Los Angeles Chapter

REPRESENTING COMMUNITY ASSOCIATIONS IN

ALL AREAS OF REAL ESTATE LAW

• Drafting and enforcement of Bylaws and CC&Rs • General litigation, including mediation and arbitration of disputes with owners • Construction defect litigation • Insurance bad faith litigation • Collection of delinquent assessments • Providing general business advice to homeowners associations.

11400 West Olympic Boulevard Ninth Floor • Los Angeles, CA 90064 (PH.) 310.478.4100 • (FAX) 310.478.6363 www.wrslawyers.com

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DROUGHT-BUSTING RAINS Assessment and Prevention Plan

and other expensive repairs. Ultimately, you will receive the longest-life and thus the greatest value from your assets.

Continued from page 4

How do you know if your community needs a maintenance program? All attached condos, midrise and high-rise communities, master associations and most planned developments (with common area) need a maintenance program. If you are currently spending any money on building component replacement or repairs it is a sign you need a maintenance program. Every building and most common area components, including concrete, require maintenance.

more days per month to perform the myriad of maintenance tasks at your community, but especially those things that prevent water intrusion (and other emergencies) during rains.

A big part of your preventive maintenance program is having a list of all of the monthly, quarterly, bi-annual or annual tasks that need to be completed to avoid premature aging of your building component and also to prepare for the winter rains or other emergencies, such as fires and earthquakes.

With your list in hand you, the community manager, your board member maintenance liaison and your maintenance contractor can create a simple maintenance plan which outlines what your maintenance technician will do and when.

This list of tasks, when coupled with dates for completion turns into a schedule of maintenance tasks and a basic preventive maintenance plan.

Your building maintenance technician can not only perform carpentry, electrical, painting, lighting or roofing needs, but also those odd-ball tasks such as installing motion sensors on lights, replacing sump pumps in the fountains, graffiti removal and a myriad of other unique building fixes.

If your roofs are getting older and are prone to roof leaks, your community may require a roofing maintenance or guttercleaning program which is performed one or two times per year. This is not work that your maintenance technician should do, but he can oversee the project. Special insurance and fall protection equipment is required for work over six feet in height.

The ultimate goal of the building maintenance program is to get the longest possible life out of each building component.

Another goal is reducing emergencies such as roof leaks, floods

When soliciting bids for your maintenance program make sure the following elements are included: 1. Same building maintenance technician each month (retains history of the community): You want your maintenance technician to have multiple trade skills including carpentry, dry-wall, concrete, stucco, windows and doors, masonry, lighting, electrical and painting skills.

2. Provide a Quarterly Photo Walk-through Report: your contractor should provide detailed logs of work performed, as well as updates or progress towards your annual maintenance plan completion. Each quarter a walk-through should be performed, and a resultant report highlighting maintenance and repair issues should be prepared and submitted to the board.

3. Supervision: Your contractor should provide account manager oversight of your program. In addition, if your technician is ill or goes on vacation, the supervisor or another technician needs to step in and take over so the program is not interrupted.

4. Material House Discounts: You contractor should provide back-up labor, office support and should give your HOA material discounts at supply houses.

5. Flexibility: Your contractor should allow the number of contracted hours to increase or decrease depending on the needs of your community.

6. Specialty Trades at Same Low Rate: Will your contractor provide electrical, plumbing, roofing and welding at the same low contract rate or will they charge a higher rate?

7. Larger Capital Projects: Your contractor should be able to perform larger capital projects over an extended period of time at the same low contract rate; i.e. replace one deck per month for 36 months.

8. Correct Insurance: Your contractor will need both Workers Compensation Insurance for all the tasks performed along with General Liability Insurance without the HOA exclusion.

Muddy Sidewalk 6

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9. Licensing: Finally, your contractor will need to have “at least” a General Contractor’s B license, if not several specialty C trade licenses.

CAI-Greater Los Angeles Chapter

The cost for a preventive maintenance program is less than repairs in two respects. First, the repair rate (and certainly the nighttime emergency rate) is higher than your maintenance program rate. You are also keeping building components from breaking down, so you are eliminating repairs in the first place. Your maintenance budget should be no less than eight hours per month for routine preventive maintenance.

Erosion Problems Hillside Collapse

Excellent community managers always take a proactive role in assisting their managed association(s) with the implementation of these programs. It is only through teamwork with great vendors and contractors that a community manager can become an excellent community leader.

J. David Rauch (far left), ProTec’s President, and Mark Adams, (near left) ProTec’s Director of Construction, oversee 330+ technicians, building engineers, plumbers, inspectors, and janitors serving HOAs throughout Southern California and Nevada.

David and Mark can be reached at drauch@goprotec.com and madams@goprotec.com, respectively.

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CAI-Greater Los Angeles Chapter

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I

n its history, California has always been subject to a varying degree of severe weather conditions—from periods of extreme dryness and heat to periods of violent storms coupled with rains. This past winter season fits perfectly into this paradigm, as it was the wettest we have had in years.

The Wettest Winter Season in Years SSS By Mike Ayala

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As a landscape contractor we took it upon ourselves in late 2016 to prepare our associations for the proverbial “worst.” Sandbags, straw waddle and other emergency flood/erosion supplies were stored onsite and at our yards. We also assembled emergency response teams whose primary focus was to assess damage and either act on the spot or call in the appropriate agencies to handle any situation. We certainly learned a lot from all our experiences during this rainy season, as we hope many associations did as well.

Many of the severe challenges we faced were downed trees, uprooted trees, minor landslides, clogged drains, improperly-maintained drainage basins, etc.—all which posed a challenge to commuter and pedestrian transport.

Park West was on call for associations we maintain as well as others that we don’t—ready to handle any challenge presented.

Our most severe issue occurred in an association in southern Los Angeles County, where four trees went down in less than two hours. Park West had

assembled emergency response teams who has been trained in all manners of rain-related emergencies—most importantly, who to call in certain situations and when to back away and focus on everyone’s safety before trying to solve the problem.

When we arrived at the scene, there were 10 Melaleuca trees that had split, and multiple trunks and branches had fallen on numerous cars, structures and even power lines. We assessed the situation, and teams, using chain saws and other equipment, were able to remove the trees limbs that were blocking walking and driving paths, along with alerting the appropriate agencies who were needed to handle the electrical and structural issues.

Another incident involved two pine trees that were uprooted off a slope and came down across a main city center street. In this case, we were able to chainsaw the trunks away from the street so that car traffic could move through safely. The material was kept onsite, and we returned the following day to finish cutting and remove all remaining tree parts.

We all certainly learned a lot through this rainy season and are still dealing with some of the challenges presented.

Fuel modification zones are rife with plant material that had never been present before. This is elongating the eradication process and requiring

CAI-Greater Los Angeles Chapter

“

e certainly W learned a lot from all our experiences during this rainy season, as we hope many associations did as well.”

additional manpower and support to ensure our communities are prepared for fire season.

The rains really affected the landscape community in a multitude of ways.

One of the other challenges was staying on rotation. As most of you reading this know, we work by rotating through communities; staying on strict rotational schedules is critical to our

CAI-Greater Los Angeles Chapter

success. With a multitude of rain days creating unsafe working environments, it made it problematic to keep on our rotations. To adjust, just like many other landscapers, we worked on weekends and on overtime to ensure our communities were kept looking great.

Attention to the programming of irrigation controllers was also essential to ensure that precious water resources

were not being wasted while Mother Nature was providing associations with all the water they needed, and then some, for free! It was critical that irrigation management teams constantly check schedules and keep up on the weather forecasts in an effort to never have systems running in periods of rainfall.

Despite all the challenges, we are all experiencing an amazing spring bloom.

Years and years of salt build up in the plants root systems has been washed away, allowing the plants root fiber to uptake necessary nutrients from the soil. I’m sure, as you drive around, you are seeing vibrant blooms and refreshed plant material—something to look forward to throughout the duration of this year. Enjoy!

Mike Ayala is a branch manager with Park West Landscape Management, a landscaping company serving communities and businesses throughout Southern California. Reach him at mayala@parkwestinc.com.

May/June 2017 | www.cai-glac.org

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A

ny significant change in environment leads to a significant change in behavior.

Believe it or not, your ability to forecast and prepare for changes in behavior in and around your community is directly related to how effective you can be at resolving unanticipated issues.

During the rains, if the option was available, more people worked from home, or worked less. People stayed in, when otherwise they would go out for entertainment, and cooked at home or ordered in when they otherwise would have eaten out. So, why does that matter in property management? It matters mainly for two reasons: (1) people will consume more of the community’s resources and amenities; and (2) people will produce more waste than normal.

Increased Consumption Remember that every community has many resources and amenities that are used daily.

Abnormal amounts of use could exacerbate problems that you may not be aware exist.

For example, a minor undetectable problem with an elevator could become exposed when use suddenly increases. During recent rains, a community prone to pinhole leaks in San Clemente experienced an overwhelming amount of plumbing problems and leaks as the plumbing system attempted to meet the higher and more constant demand of people staying indoors. A number of communities reported issues with water heaters that struggled or all together failed at the task of trying to keep up with a sudden rise in demand. Even your electrical systems are vulnerable to potential problems when a sudden high number of people try to stream Stranger Things and plug in their arsenal of devices while working from home.

Increased Waste

By Isaac Camacho

Consumption of anything is impossible without producing some kind of byproduct, which more often than not, is pure waste. Let’s consider three of the most recognizable types of waste: trash, leftovers and debris. There is another population you don’t like to think about in your community: the pest population. When there is an unpleasant change in the environment like rain, they too adapt and seek shelter. The recent rains motivated the pest population in your community to move in deeper. They likely found new vulnerabilities in your structures to gain access and when they came in to find leftovers and food debris, they considered this a welcome reception. Some communities immediately saw a noticeable change in traffic, but chances are that most communities will not see the evidence of increased pest activity until the environment is disturbed again—in the summer.

Isaac Camacho is the Marketing and Sales Director for Accurate Termite and Pest Control and has been involved in the CID industry over 8 years. Isaac has served on his own board of directors, as committee chair, and committee member for multiple CAI committees across multiple chapters.

Isaac can be reached at isaac@accuratetermitecontrol.com.

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CAI-Greater Los Angeles Chapter

With the CAI-GLAC Blue Tent, the Outreach Committee had ocean-themed background scenes where participants of the beach cleanup gladly posed with their friends, family and doggies stopped by to snap a quick photo at the tent. The Outreach Committee handed out recyclable canvas bags that contained information about CAI-GLAC. The event participants were eager to find out about CAI and the Greater Los Angeles Chapter as they stopped by.

Some knew about HOAs as they currently lived in a HOA or some knew of HOAs from friends/ family that lived in a HOA Community in Los Angeles.

On May 20 2017, Mother Nature granted a beautiful sunny day, perfect for a beach cleanup at Toe’s Beach in Playa del Rey. Together with Heal the Bay, your very own CAIGLAC Outreach Committee participated in the monthly NothinButSand clean up. Hundreds of volunteers were present as they diligently helped gather ocean-bound trash in Playa del Rey and Ballona Creek.

CAI Outreach Committee Members gathered ocean-bound trash that included cigarette butts, water bottle caps, and pieces of paper, among other things that would have landed up in the ocean. It was a great way to spend a Saturday morning at the beach with family, friends and the community.

Miranda Legaspi, MBA, Platinum Security CAI-GLAC Outreach Committee Co-Chair If you'd like to join the committee, please contact Miranda at mlegaspi@platinumsecurity.com.

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When It Rains, It… Well, You Know lll By Anthony Menke, CPCU Since heavy rains in California happen less frequently than celebrity sightings at coffee shops, many people don’t pay a great deal of attention to roof maintenance or waterproofing on their homes until these items fail during a downpour. This is particularly problematic in condominiums and townhouses in which multiple residents share the same roof. When the roof leaks in a condo and the water insidiously sneaks through the walls causing structural damage, the immediate reaction is to contact the insurance agent or broker and file a claim for water damage.

This is a prudent measure and completely logical. After all, insurance is there to cover us when sudden unexpected events result in property damage, right? Yes, BUT it is important to remember that an insurance policy contains conditions and exclusions that limit the scope of the coverage. Here are a couple of exclusions that are important to keep in mind.

Commercial property coverage for condominiums is typically written on a “Special Form” basis regarding covered causes of loss. In a nutshell, this means that if there is damage to the covered property, the insurance carrier will pay for it unless it is specifically excluded. The above exclusions are standard in Special Form policies. So, if a heavy rain penetrates a building because a section of the roof is worn out, or flashing around a window was improperly installed, or the waterproofing around a patio door has eroded over time, it is likely that the insurance policy will NOT cover the claim.

It is important to bear in mind that wind is not generally an excluded peril in a condo policy. So if the wind blows a tree limb or other object into the building creating an opening for rainwater to enter, or the wind blows hard enough to cause damage to the structure allowing water entry that loss will most likely be covered.

Insurance can definitely protect us from the unexpected, but if an Association has put off its maintenance in an effort to save money, the insurance may not be able to prevent the Board from being thunderstruck by repair costs from a heavy rainstorm.

l “Wear and Tear” l “Faulty, inadequate or defective” repair, workmanship, construction…

Anthony Menke is a broker at Cline Agency Insurance Brokers in Santa Monica, an insurance agency dedicated to serving community associations. He can be reached at anthony@ timothycline.com.

Insuring Common Interest Developments Throughout The West

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CAI-Greater Los Angeles Chapter

CAI-GLAC WIne TAsTInG & LIGhT MeAL

August 19, 2017 4:00 – 8:00 p.m.

Central Park Bandshell at Playa Vista 12045 Waterfront Drive • Playa Vista, CA 90094

$75 per person Casual Attire Sign up now at CAI-GLAC.org Net proceeds to benefit the California Legislative Action Committee

Current sPonsors Best of ClAss

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Heavy Rains and their Impact on Association Insurance Claims A Unit Owners Viewpoint

By Pamella De Armas, CIRMS

E

arlier this year there was a deluge of rain in California.

Even though we needed the rain, too much came down in too short a time and caused serious issues for many homeowners.

Southern California was not prepared for the widespread flooding and all-time rainfall record. We were hit with the strongest rainstorms since 1995. Devastating loss due to the rain was experienced across the state.

The good news is there are no longer any areas of drought in northern California and conditions in southern California have drastically improved!

The bad news is due to the lack of rain, many community associations deferred maintenance on their roofs, gutters or drains.

There was definitely an increase in insurance claims for “leaky roofs,” “overflow of outside area drains” and flooding due to the rain. This caused much frustration between unit owners and their board of directors. Unit owners suffered damage to their interiors and found out the hard way that there was no coverage under their association’s insurance. Many were maintenance issues and were not covered by insurance.

The unfortunate misconception is “the association’s insurance is responsible for everything.” Many unit owners assume that their association’s insurance covers a leaky roof and the damage it caused. In many cases the unit owner is responsible for the interior betterments under their own Condo Unit Owners Policy. This has been a hard lesson for many.

14

www.cai-glac.org | May/June 2017

Below are two examples of claims denials—both due to rain: “You presented a claim for damages to the floor. Our research found that the damages were the result of water intrusion through the roof. The claimed damages to the floor are considered to be an owner improvement.

The CC&Rs for the property were reviewed and it was determined that owner improvements are the responsibility of the owner, not the HOA. Since the HOA is not responsible for any owner improvements, your policy does not provide coverage.”

“You presented a claim for weather-related water damage. We inspected the damages with the unit owners on March 8. Our research found there was no damage to the exterior from a covered cause of loss that allowed the water to enter. Also, the damage to the flooring on the first floor was caused by surface water. Since there was no damage to the exterior from a covered cause of loss, and surface water is a named exclusion, your policy does not provide coverage.”

Moving forward — Who insures what? Every unit owner should review the Insurance Section of their CC&Rs to understand what they are responsible to insure. Secondly, it is wise for the Board of Directors to make certain their CC&Rs require unit owners to have their own HO6 policy. This will definitely reduce difficult situations for boards and move in the right direction of a more harmonious community lifestyle, at least regarding insurance.

Pamella De Armas is the CEO and President of Silicon Beach Insurance Services, serving communities throughout Southern California. She can be reached at pam@ siliconbeachinsurance.com.

CAI-Greater Los Angeles Chapter

Membership Committee Hosts First New Member Welcome Reception

On May 18 Membership Committee members and Chapter Board of Directors representatives gathered in the Chapter Office to host an afternoon welcome reception for fifteen new members.

Our new members had the opportunity to see the Office, learn more about our benefits and programs, join a committee and make new industry friends. The Committee plans to hold this event again later in the year.

Our thanks to the Membership Committee for all their hard work: Committee Chair Mahendra Sami (Union Bank HOA Services), Ramona Acosta (Tinnelly Law Group), Mimi Cortes (SAX Insurance Agency), Brian Gladous (Association Lien Services), Brian Gholston (Valley Alarm), Joanne Peña (Horizon Management Company), Kim Province (The Miller Law Firm), Gina Roldan (ProTec Building Services), Alisher Sabirov (S.B.S. Lien Services), Eliot Smith (Rose Paving Company), A.J. Tigner (Black Tie Window Washing) and Les Weinberg (Reserve Studies Inc.).

CAI-Greater Los Angeles Chapter

May/June 2017 | www.cai-glac.org

15

TPC Valencia 26550 Heritage View Lane • Valencia, CA 91381 There’s Always Time for Golf!

CAI members and guests braved a chilly and drizzly day to enjoy this year’s Golf Tournament at TPC Valencia on May 15. Tee sponsors carried out the “Space Wars: Galaxy of Golf” theme with innovative decorations and offerings.

Our thanks to the Golf Committee for its great planning and hard work: Co-chairs Ryan Dudasik (Whitestone Painters) and Katie Mokhlessin (BrightView Landscape Services), Teresa Agnew (Roseman & Associates, APC), Ann Bitter (Common Interest Services, Inc.), Brian Fleming (Wilshire Regent HOA), Julia Gomes (Accurate Termite & Pest Control), Sean Kargari (Association Reserves, Inc.), Jeff Koscher (HAR-BRO, Inc.), Gary Lieberman (Payne Pest Management, Inc.), Jay McMullen (Allstate Landscape Services, Inc. dba Southwest Greens), Tempe Miller (Vet-Sec Protection Agency, Inc.), Ashley Neff (HAR-BRO, Inc.) and Jeff Stephens (Preferred Commercial Painting, Inc.).

16

www.cai-glac.org | May/June 2017

First Place Net

First Place Gross

Eric Macias Guillermo Amador Robert Bellucci (Not pictured)

Scott Shaw (Not pictured)

GUARD-SYSTEMS, INC. FOURSOME

ROSE PAVING COMPANY FOURSOME

Eliot Smith

Closest to the Pin #4 (Men’s and Women’s) Putting Contest Winner Ken Bunnell with Dan Ryan CONTEST SPONSORED BY MCKENZIE RHODY LLP

Ashley Neff and Erik Mendez Reverse Raffle Winner Ashley Neff

CONTEST SPONSORED BY CERTAPRO PAINTERS OF PASADENA

Longest Drive Winner (Women’s)

Longest Drive Winner (Men’s)

Mic Montalvo

Rod Martinez with Jennifer Silva

CONTEST SPONSORED BY DUNNEDWARDS PAINTS

CONTEST SPONSORED BY DUNNEDWARDS PAINTS

CAI-Greater Los Angeles Chapter

Thank You to our Sponsors

Best The Decormeat Tee! ed

Souvenir Photos

Securitas Security Services USA, Inc. Championship

Pacific Western Bank Starship Lunch

MeterNet Sub-metering and Billing Solutions Tinnelly Law Group Beverage Cart

Alliance Association Bank American Heritage Landscape Bloody Marys

Servpro of Burbank, Chatsworth, Van Nuys & Crescenta Valley Breakfast

Select Painting & Construction Putting Contest

McKenzie Rhody LLP Chewbacca Buffet

Steven G. Segal Insurance Agency Best Decorated Tee — Whitestone Painters

CENTERPIECES

The Miller Law Firm Golf Towels

Rose Paving Company Contest Hole

Straightest Drive #5 (Women’s) Debbie Langford CONTEST SPONSORED BY VALLEY ALARM

Closest to the Pin #9 (Men’s) Rod Martinez with Eric Macias CONTEST SPONSORED BY GUARD-SYSTEMS, INC.

CertaPro Painters of Pasadena Guard-Systems, Inc. Hi Tech Painting & Decorating SKY Painting Valley Alarm Swag Bags

Sherwin-Williams Paint Meet & Greet Hole

Closest to the Pin #11 (Women’s and Men’s) Russell Hoffman and Ashley Neff CONTEST SPONSORED BY HI TECH PAINTING & DECORATING

Honesty Award Joanne Peña and Andrew Mori With Katie Mokhlessin Sal Navarro and Allan Peña (Not pictured) BRIGHTVIEW LANDSCAPE SERVICES FOURSOME

WINNER NOT PICTURED Straightest Drive #5 (Men’s) Ean Belafsky CONTEST SPONSORED BY VALLEY ALARM

ALLBRIGHT 1-(800) PAINTING American Technologies, Inc. Animal & Insect Pest Management Dunn-Edwards Paints LandCare Master Property Improvement Co., Inc. Park West Landscape Management ProTec Building Services, Inc. SAX Insurance Agency Steve Little Insurance Agency Vet-Sec Protective Agency, Inc. Vista Paint Corporation Whitestone Painters Club Pro

Nu Air Services, Inc. Valencia Management Group

Closest to the Pin #16 (Men’s and Women’s) Katie Krupp and Brian Voorhees with Tiger Cho CONTEST SPONSORED BY SKY PAINTING

CAI-Greater Los Angeles Chapter

May/June 2017 | www.cai-glac.org

17

Fore!

Winter of 2016 –2017

WE REPRESENT COMMUNITY ASSOCIATIONS

Since 1987 we have limited our practice to providing a full range of legal services for • Condominiums • Planned Developments • Cooperatives • Homeowner Associations There is no substitute for experience!

Ventura County 805.650.7899

www.lawforhoas.com www.hoalawblog.com 20

www.cai-glac.org | May/June 2017

Orange County 949.476.3789

Los Angeles 310.207.2207 California 800.372.2207

San Francisco 415.762.1889 CAI-Greater Los Angeles Chapter

¾¾¾ By Stephen S. Grane As we all know, the winter of 2016-2017 was a drought-ending season for California, to say the least. Instead of saying (as we did in years past), “When is the rain coming?”—this year we were saying, “When is the rain going to stop?” You would have thought that claims for water and wind damage would have gone up greatly. For our agency, this just was not the case. We found that our northern California associations were impacted more significantly than those in southern California.

One of the most significant findings at our agency: associations that had a regular maintenance program in-place versus those that were a little lax on their maintenance, weathered the storms much better than those who did practice regular maintenance.

The few claims that did come in were for water intrusion from parts of the roofs that were blown

off, causing water damage to the residence. We had one claim where an entire fence line blew over due to the high winds. These claims were covered by the insurance companies we represent, due to stormrelated damage.

This past winter has been a wakeup call for associations to have a good maintenance schedule in place.

The best advice I can give associations is to keep a regular maintenance program in place in order to nip problems in the bud before they happen.

Additionally listening to their Property Management Team, to be prepared for future problems that might come up.

Stephen S. Grane is a broker at Alante Insurance Services, a full-service insurance agency serving community associations throughout California. He can be reached at steveg@mcsins.com.

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CAI-Greater Los Angeles Chapter

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www.BentleyCM.com May/June 2017 | www.cai-glac.org

21

news

from sacramento

AB 690 has passed the Assembly and been referred to the Committee on Transportation and Housing and Judiciary.

It pertains to conflicts of interest and disclosures. Sarah Sapien provides an explanation and justification of transfer fee charges.

Why do Management Companies Charge Transfer Fees for Escrow-related Items? ¡¡¡ By Sarah Sapien

H

omeowners and real estate agents are sometimes surprised to find that the association’s management company charges a transfer fee for escrow related items. They are often confused by the amount of the charge, which can range from $300 to $1,000, and the ten-day quoted turnaround time. To understand why the fees are charged, it is important to understand the process of the management company and the duties of the escrow informational officer.

Per the State of California, escrow requests must be responded to within ten calendar days. Management must meet that requirement, but aims to process requests more quickly than the law demands. Some escrows are straight forward and only require a standard set of documents and a standard questionnaire. As management companies continue to become more technologically advanced, many of them have acquired the ability to provide a standardized questionnaire and set of documents instantaneously via Web transactions.

For customized requests, however, it is possible to log as much as ten or more hours in phone calls, e-mails, and miscellaneous requests for a single escrow.

One example of a customized request would be when the lender requires that the lender’s questionnaire form be completed rather than a standard form. Customized requests will generally come with higher fees because they often require more research and/or take additional time to interpret the questions and match the management company’s dates and records to the required lender form.

Occasionally lenders request that the association purchase additional insurance or pass resolutions to benefit the lender.

If the request is submitted by the current owner, the manager will obtain bids for items that incur cost. The Board will then need to meet and decide if the requests and additional costs are approved. In some cases it is necessary to seek legal counsel, all of which increases the process time.

22

www.cai-glac.org | May/June 2017

It is common for the potential buyer to have maintenancerelated questions and want information on how to process an architectural request to remodel once escrow closes. In an effort to avoid fees or in an attempt to speed up the process, buyers’ agents and potential owners sometimes will contact the Board members directly. This is not recommended since it can result in the buyer, seller, or lender receiving incorrect information. More often than not, attempting to circumvent the process creates situations that increase the time it takes to process requests. Once misinformation has been shared, it may take a manager and an escrow informational officer additional working hours to ensure that the association is only providing correct information for a single sale.

There is also a small but not insignificant amount of time involved with updating and maintaining records and documents. For example, the City of Santa Monica, requires that management track units that are smoking or nonsmoking. All units that are sold after November 22, 2012 can only be deemed as non-smoking. The management company must update and maintain their records to reflect the proper status. This is just one example of customized tracking that may affect the escrow-related fees.

Typically, the base monthly fee for management services covers processing requests from homeowners, maintaining association documents, and providing guidance to the Board members. Escrows are handled differently because the frequency of sales increase and decrease based on factors outside of the association’s control. Due to the fluctuation, management cannot accurately anticipate the amount of work that will be required for escrows, which is why many will separate out that cost and charge it per event.

Lastly, it is essential to have a well-qualified employee handling escrow-related matters. Real estate laws are complex and, if not followed thoroughly, the handling of escrows can become an area for legal exposure. Small management companies often pay top dollar for employees who can process escrow requests while medium and large management firms often staff departments specifically for that purpose. Due to education costs and payroll rates for qualified employee retention, the hours spent on escrow-related transactions can be costly to a management company.

All of these factors together are some of the key reasons why management companies charge transfer fees for escrow related items.

Sarah Sapien is the escrow informational officer for Management Professionals, Inc. She processes all escrow related requests for MPI as well as three additional community management companies. Sarah can be reached at sarah@mpimail.net.

CAI-Greater Los Angeles Chapter

What is CLAC? The California Legislative Action Committee (CLAC) is a volunteer committee of the Community Associations Institute (CAI) consisting of homeowners and professionals serving community associations. CAI is the largest advocacy organization in American dedicated to monitoring legislation, education elected state lawmakers, and protecting the interests of those living in community associations in California.

About the Organization

#ilovemyhoala Do you live in a common interest development in Los Angeles County?

We want to hear from you!

Submit a short story (about 300 words) telling us why you like your HOA and win a $50 gift card if it is chosen for publication in FOCUS Magazine.

Send it to ilovemyhoala@gmail.com.

zz Is a non-profit, non-partisan committee composed of two Delegates and one Liaison from each of the eight CAI California chapters. zz Represents over nine million homeowners and property owners in more than 45,000 associations throughout California. zz Comprises association homeowners, board members and the professional business partners that service them. zz Is NOT a PAC (Political Action Committee) and makes no financial campaign contributions. zz Depends solely on the donations of the community associations, their boards of directors and those who serve HOA members.

CLAC’s Mission To safeguard and improve the community association lifestyle and property values by advocating a reasonable balance between state statutory requirements and the ability and authority of individual homeowners to govern themselves through their community associations.

OUR THANKS TO 2017 CAI-CLAC CONTRIBUTORS January 1 – May 31

Goal: $24,543

51%

of goal as of 5/31/17 $12,574

CAI-Greater Los Angeles Chapter

100 Marina Shores HOA 101 Ocean Condominium HOA 446 San Vicente HOA 515 San Vicente HOA 909 El Centro, Inc. 914 Lincoln Blvd. HOA 948 20th Street HOA 1050 3rd Street, Inc. 1242 Berkeley Street HOA 1715 California Ave HOA 1835 7th Street HOA 2050 Artesia HOA 2641 4th Street HOA 4424 Whitsett Avenue HOA 4820 Bellflower HOA 11767 Sunset Blvd. Association 15206 Burbank Blvd. HOA Armour Lane Condominium Avis HOA Avocado Glen HOA Berkeley Townhouse HOA, Inc. Bodger Park Condominiums HOA Budlong Villas HOA, Inc. Cardiff Court HOA, Inc. Casa de Suenos CA Casa De Valley View OA, Inc. Cedar Glen HOA

Culver Centrale HOA Culver City Gardens (Lincoln Archways) Design Villas HOA Eight on Twenty HOA El Segundo Peppertree HOA Florwood Estates HOA Gorham Park HOA Grand Kansas HOA Hermosa surf Condos, Inc. Highlands OA Hillcrest Meadows HOA, Inc. Hillcrest Rolling Hills HOA, Inc. Hopi HOA Idaho Villas HOA Irena Vista OA Kelton Arms COA Kester Villas HOA Lawford HOA (Hayvenhurst CA) Longfellow Village OA Marina Village HOA Monterey Pines HOA Oak Hill Condominium HOA Ocean West HOA Pacific Colony HOA Pacific View Condominiums HOA Park Crest HOA Polynesian OA

Rancho Glen HOA S. Manhattan Place HOA Seascape-Redondo HOA, Inc. Silver Spur Court HOA South Bay Estates HOA South Hermosa Townhomes HOA Spencer Estates HOA Textile Building OA The 555 Evergreen Street HOA The 3219 Colorado Assoc.

The Angels Landing Group 7 Fountains The Estates COA The Vista Pacifica HOA Villa Capri Townhomes HOA Villa Cordoba HOA Villa Del Sol Villas HOA Villa Serena CA, Inc. VIP Goshen Association Virgil Courts HOA Vogue Condominium Association West Wind Townhomes HOA Westside Townhouses HOA Wilshire Regent HOA Wilshire Selby Towers East CA, Inc. Windsor Estates COA Woodbury Maintenance Corp.

Yale St. HOA

May/June 2017 | www.cai-glac.org

23

And Now, to Re uuu By Sue Nelson, AMS The contractors have cleaned up and moved on. The gutters and downspouts and scuppers are cleared and repaired; the siding and paper are replaced; the flashing and stucco are repaired; the roof has been repaired or replaced and the vents have been caulked. Water damage and maybe even mold in the units have been remediated; drywall repaired; flooring reinstalled. What now? Time to put up your feet, scarf bonbons and coast until the next El Niño?

Well, not quite. You’ve taken care of the physical damage— and if you haven’t already, now it’s time to evaluate the financial damage, mitigate it, and perform your fiscal planning for the remainder of this year and for the next. Most likely some of the work was paid for out of the replacement fund (reserves) and some from your operating fund. It’s time to look at your current reserve study and financial statements with a critical eye.

Reserve Expenditures. Were the storm-related replacements anticipated in this year’s projected expenses of the reserve study? Were the costs in line with the study? If yes,

all is well. If no, then your reserve study may need some major tweaking when it is updated. Be sure to give all of the costs to your reserve study provider so that the new study and new funding reflect this information accurately.

Operating Expenditures. Were the maintenance and repair costs anticipated in this year’s budget? Did they go over budget? Do you expect it to even out by the end of the year or is there no way? If your storm repairs totaled, for instance, $12,000 in January and your budget was $1,000 per month, you will be over budget for now but will normalize by the end of the year (assuming no additional fall storm damage). If your storm repairs totaled $24,000, you will most likely end the year with an operating loss, assuming other receipts and expenditures are essentially at budget.

Are there upcoming collateral costs from the storms? For instance, with all of the rain, the trees will most likely have a robust growing season. That may increase your tree trimming and gutter cleaning costs later in the year. Also, accelerated tree root growth may make this year’s area drain clearing and sidewalk lifting repair costs greater than normal.

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www.cai-glac.org | May/June 2017

Risk Management Solutions…

Professionally it’s what we know; Personally it’s what we do!

CAI-Greater Los Angeles Chapter

pair the Financial Damage How healthy is your operating fund? Take a look at the balance sheet. CAI recommends that the cash in the operating bank account(s) minus prepaid HOA fees should equal at least one month’s operating expenses (M-206 Checklist for Financial Records and Reports, 2009). If you have a “healthy” operating fund, you may be able to absorb some or all of this year’s budget overruns. If your operating fund is less than stellar, it is time for Plan B: a special assessment to cover the storm damage repairs and/or to increase your operating fund. If the total of the special assessment is under 5% of the budgeted gross expenses for the year and you haven’t pulled that card already, most likely the board of directors can vote to pass the special assessment.

Always check with your attorney. She/he may tell you that the special assessment falls under the emergency assessment rules, or you may need to have the membership vote on it. Plan C, the other alternative, is to increase the HOA fees mid-year (if allowed in your governing documents) or increase the HOA fees in next year’s budget to cover this year’s operating loss.

years that will eventually need to be rectified. It is much easier to fix the cash situation in the year that it occurred. Explain to the membership that the budget didn’t anticipate the $$$ amount of essential storm damage repairs, and the funds need to be reimbursed. Then the owners who were affected by the damage pay for the cost of the repairs. It is much harder to sell a special assessment or fee increase five years down the road that was due to storms five years in the past—plus the new buyers shouldn’t have to shoulder the costs.

Your CPA or reserve study provider may be able to help you, if needed. With a little analysis, you should be able to keep your association financially healthy despite the additional costs from the storms.

Sue Nelson, AMS, is the co-owner and CFO of Horizon Management Company, a full-service management company in Torrance. She can be reached at sue@horizonmgmt.com.

Plan D is to do nothing at all—the absolutely wrong approach if the cost was significant and not budgeted. If that path is taken, you will most likely have several or many cash-poor

CAI-Greater Los Angeles Chapter

May/June 2017 | www.cai-glac.org

25

Developer and Contractor Liability for Water Intrusion Problems

¾¾¾By Richard H. Levin, Esq. One

might

residential

assume

that

most

construction

is

properly performed. After all, we have detailed building codes that specify how construction is to be done, and local building inspectors to

enforce

code

requirements.

However, the unfortunate reality is that building inspector approval of residential construction is no guarantee that the construction is in fact code compliant.

Building inspectors generally have no liability for approving construction that is not code compliant, and neither do the government agencies that employ them. Additionally, building inspectors

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CAI-Greater Los Angeles Chapter

typically do not inspect all of the construction. Since they only “spot check,” they can miss a lot of defects in the work they are inspecting.

Also, different inspectors have different skill sets and different priorities. So, while some inspectors may focus on water intrusion issues, others may limit the focus of their inspections to structural issues, with less concern for the aspects of construction that focus on water intrusion.

Since government approval of the construction process is no guarantee of a defect-free home, to what extent can the buyer rely on the expertise of the contactors to do their work properly?

Unfortunately, some contractors focus more on speed than on quality and end up cutting corners. Sometimes the result is substandard construction. And as noted above, poor construction isn’t always caught by a building inspector.

CAI-Greater Los Angeles Chapter

And here is the problem: Unwanted water intrusion is a building’s worst enemy. It weakens building components. It leads to mold and fungus inside wall cavities. It creates an environment that encourages insect infestation. In short, uncontrolled water intrusion can be a ticking time bomb.

years before that mold and fungus work their way to of the exterior surface of the building envelope and/or to the surface of the interior drywall. But by then, the damage may be extensive and homeowner rights may have been lost or seriously compromised by the passage of time.

Here is why: Over the years, building codes have focused increasingly on energy conservation, preventing cold outside temperatures from parring through the building envelope. This has also meant that water entering the exterior building envelope ends up having difficulty in draining out of the envelope. Instead, it may just sit there, degrading the wood framing, insulation and other components inside the exterior wall cavities of the building.

Most of Southern California is not a desert. But historic rainfall, in Southern California, averaging perhaps 14 or so inches a year, is only a third to a half of the average annual rainfall in much of the rest of the country. This means that most of Southern California can be accurately described as semi-desert—and up until last year, for the last several years we have had even less rainfall than normal.

The problem is made worse by the fact that mold and fungus growth starts inside the envelope, and it can take

As a result, poor construction probably hasn’t resulted in obvious water damage because there hasn’t been enough rain to cause a water intrusion problem.

Continued on page 28

May/June 2017 | www.cai-glac.org

27

Developer and Contractor Liability for Water Intrusion Problems Continued from page 27

The last year has been different, with rainfall far in excess of the historic average, and three-to-five times the amount of annual rain in the last several years. This is enough rain to pose a significant risk of serious water damage if water has gotten inside the building envelope and can’t get out.

Fortunately, associations and their unit owners, and homeowners in general, have the ability to hold developers and their contractors legally responsible for the defects that will cause such damage.

In most states, there is some degree of legal protection against defective construction. However, what sets California apart from many other states is how long this legal protection lasts.

Every state has a statute of limitations that limits the time period within which developers and their contractors remain

legally responsible for defects, and California is no exception. But what distinguishes the statute of limitations in California from the statute of limitations in many other states is that the statute of limitations that will bar a claim in California usually doesn’t start to run until the defect was or should have been discovered.

However, once homeowners have notice of a defect, they may be deemed to have notice of any other defects a professional investigation would have disclosed. In light of all the rain of the last several months, if there are defects, there is likely to be at least some evidence of those defects, even if the full extent is not yet known. Since that limitations period usually is only three years, the clock may already be running. It is also possible that the three-year period has been shortened by provisions in sales agreements or other governing documents, or by other circumstances.

So what is an association with construction defect issues to do? The

first thing would be to consult with an attorney experienced in the resolution of construction defect claims. That attorney can advise an association board of its rights, the time limits for their exercise, and how to proceed in order to determine the extent of the defects and can explain the statutory process for the resolution of the association’s claims if the defects turn out to be significant.

Richard H. Levin, Esq. is the Senior Partner at Levin Law Group LLP with offices throughout California. He can be reached at rlevin62@aol.com.

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28

www.cai-glac.org | May/June 2017

CAI-Greater Los Angeles Chapter

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CAI-Greater Los Angeles Chapter

May/June 2017 | www.cai-glac.org

29

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Member FDIC Equal Housing Lender

EQUAL HOUSING

LENDER

CAI-Greater Los Angeles Chapter

Our Thanks to Renewing Members!

As of April 30, 2017

BUSINESS PROFESSIONALS Alliance Environmental Group, Inc. AssociationStudies.com Bethco Builders Bilt-Well Roofing Burdman & Ward Law Office KONE, Inc. McCaffery Reserve Consulting Mediation Offices of Jason M. Adams Patio Guys Performance Elevator Contractors, Inc. Poindexter & Company, CPA Robert A. Owens CPA Silldorf Law, LLP Smoothstone Construction & Consulting, Inc. Sotomayor Law COMMUNITY ASSOCIATIONS Sherwood Townhomes Association, Inc. Tradewinds 53433 HOA

COMMUNITY MANAGEMENT COMPANIES Aberdeen Management Company AAMC Action Property Management Bartlein & Company, Inc. Community Property Management Lordon Management Management Professionals, Inc. AAMC Serrano Asset Management SF Valley Management, Inc. Westcom Property Services, Inc. COMMUNITY MANAGERS Karen Ansell, CMCA®, AMS® Omni Association Management Brian Barr Solair HOA Omar Bayter Village Northridge HOA Janet Garcia Ocean Terrace HOA

Gregg Landis Bel Air Glen HOA Sascha Macias, CMCA®, AMS®, PCAM® FirstService Residential Angelique Madrigal Ross Morgan & Company, Inc. AAMC Matthew Quinn Doheny West Towers HOA Sharon VanWey Mountain Garden Homes, Inc. Reina Zuckerman, CMCA®, AMS® Ross Morgan & Company, Inc. AAMC COMMUNITY ASSOCIATION LEADERS Marilyn Balduff Cy Estabrook Virginia Kemp

Oct. 20, 2017 | Universal City, CA

CAI

Legal

Forum CALIFORNIA COMMUNITIES

A one-day event for California community managers, association board members and other homeowners from Community Associations Institute—the leader in HOA education, advocacy and professional development.

Critical updates on important legal requirements that impact how you work.

Essential information on key legal developments that impact where you live.

For event details and registration, visit www.caionline.org/events/CALaw or call CAI Member Services at (888) 224-4321 (M–F, 9 a.m.–6 p.m. ET).

CAI-Greater Los Angeles Chapter

May/June 2017 | www.cai-glac.org

31

Advertisers Index 34 Animal & Insect Pest Management, Inc.

29 Pacific Utility Audit

15 Association Reserves, Inc.

30 Preferred Commercial Painting, Inc.

15 Beaumont Gitlin Tashjian

2017 CALENDAR OF EVENTS

21 Bentley Community Management 12 Cline Agency Insurance Brokers

June 21 South Bay Luncheon Program for HOA Boards and Managers – 11:30 a.m.

DoubleTree by Hilton Torrance-South Bay, 21333 Hawthorne Blvd., Torrance, CA 90503

23 Chapter Board of Directors Meeting – 8:30 a.m.

Chapter Office, Glendale

July 19 SF Valley Luncheon Program for HOA Boards and Managers – 11:30 a.m.

27 Critter Busters, Inc. 25 Ferris Painting, Inc.

32 Poindexter & Company, CPAs

9 R.W. Stein Painting, Inc. 30 Reserve Studies Inc. 24 Sandra Macdonald Insurance 26 Select Painting & Construction 7 Steven G. Segal Insurance Agency, Inc.

25 Fireplace Solutions The Chimney Sweeper

20 Swedelson Gottlieb

11 Hi-Tech Painting and Decorating

29 Witkiin & Neal, Inc.

30 Mutual of Omaha Bank/ CondoCerts

28 Union Bank HOA Services 5 Wolf, Rifkin, Shapiro, Schulman & Rabkin LLP

Warner Center Marriott, 21850 Oxnard Street, Woodland Hills, CA 91367

20-21 M-360 PMDP Course – Leadership Practices Sheraton Gateway, Los Angeles

21 Chapter Board of Directors Retreat Location TBD

Advertising Information Dimensions & Rates:

22 Essentials of Community Leadership Workshop – 8:15 a.m.

SummerWind HOA, 2800 Plaza Del Amo, Torrance, CA 90503

26 Valencia Educational Breakfast for HOA Boards and Managers – 8:30 a.m.

Artwork must not exceed the exact dimensions of that size ad.

For more information, call the Chapter office: 818-500-8636.

Hyatt Regency Valencia, 24500 Town Center Drive, Valencia, CA 91355

Ad Size

Ad Dimensions

Members

Non-Members

26 Long Beach Educational Program for HOA Boards – 5:30 p.m.

⅛ page

3½" wide x 2" high (Horizontal)

$200

$400

¼ page

3½" wide x 4¾" high (Vertical)

$300

$600

½ page

7½" wide x 4¾" high (Horizontal)

$425

$850

Full Page

7½" wide x 9.75" high (Vertical)

$800

$1,400

Renaissance Long Beach Hotel, 111 E. Ocean Blvd., Long Beach

28 Bowling Tournament Bowlmor, 3545 E. Foothill Blvd., Pasadena, CA 91107

August 02 San Gabriel Valley Evening Program – 6:00 p.m.

Location TBD

17-19 M-100 PMDP Course – Essentials of Community Association Management Sheraton Gateway, Los Angeles

19 “Uncork and Unwined” Wine Night – 4:00 p.m.

Central Park Bandshell at Playa Vista, 12045 Waterfront Dr., Playa Vista 90094

Payment: Rates are subject to change without notice. By credit card, check or cash.

Minimum three-insertion contract. Rates subject to change without notice.

Advertising Sales: Please contact the Chapter office for advertising specifications and deadline information at: 818-500-8636.

23 Skirball Luncheon Program for HOA Boards and Managers – 11:30 a.m.

Skirball Cultural Center, 2701 N. Sepulveda Blvd., Los Angeles 90049

25 Chapter Board of Directors Meeting – 8:30 a.m.

Chapter Office, Glendale

SEPTEMBER 16 Essentials of Community Leadership Workshop – 8:15 a.m.

SummerWind HOA, 2800 Plaza Del Amo, Torrance

22 Chapter Board of Directors Meeting– 8:30 a.m.

Chapter Office, Glendale

27 Downtown Luncheon Program for HOA Boards and Managers & Annual Meeting – 11:30 a.m.

City Club, 555 S. Flower, 51st Floor, Los Angeles, 90071

32

www.cai-glac.org | May/June 2017

CAI-Greater Los Angeles Chapter

THE GREAT ESCAPE Three Contests… Three Prizes

CAI-GLAC’s 2017 Membership Recruiter Contests Share the benefits of CAI membership with colleagues and friends during 2017 and win!

GRAND PRIZE 3-Day, 2-Night Vacation Package ($1,000 Value) Member with the highest number of points as of December 31, 2017 will be awarded the Grand Prize.

(Minimum 20 pts. needed to qualify.)

Los Angeles Events

RECRUITER RAFFLE Evening Out On The Town ($500 Value) All 2016 recruiters (except the Grand Prize winner) who have achieved a minimum of 10 points will go into a raffle drawing held in January 2018 (when all the 2017 results are in).

RECRUITER-OF-THE-MONTH $50 Gift Certificate The member who has recruited the most new memberships in the previous month will be recognized at the next luncheon and awarded a $50 gift certificate.

Point System Business Partner = 1 point (in a category already existing)

Business Partner = 2 points (in a new category)

Manager or Board Member = 2 points (For Manager memberships, if in same company as Recruiter, first 2 recruited are worth 2 points each, each additional is worth 1 point)

Management Company = 3 points Rules:

• Each time you recruit a new member, you receive points toward your membership recruitment total. Points will accrue from January 1 through December 31, 2017. The more members you recruit, the more you'll increase eligibility for the Grand Prize.

• To receive recruiter credit, you must alert the local CAI Chapter Office and CAI National on the printed application form submitted, or be identified through CAI National membership reports.

• Completed applications and membership dues for qualified applicants must be received at CAI between January 1, 2017 and December 31, 2017 to be counted toward the Grand Prize.

• In the case of a tie, a random drawing will determine the Grand Prize winner.

Current SponsorS Fenton Grant Mayfield Kaneda & Litt, LLP

Tinnelly Law Group

CAI-GLAC

PRSRt StD U.S. Postage

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Order Your 2017 Condominium Bluebook Today!

Price: $26.00 per copy, tax and shipping included.

Order copies online at: www.cai-glac.org.

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