A Journal for California Community Association Leaders
Dealing With Noise Disputes
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Contents Xeriscaping—page 34 The ECHO Journal is published monthly by the Executive Council of Homeowners. The views of authors expressed in the articles herein do not necessarily reflect the views of ECHO. We assume no responsibility for the statements and opinions advanced by the contributors to the magazine. It is released with the understanding that the publisher is not engaged in rendering legal, accounting or other professional service. If legal advice or other expert assistance is required, the services of a competent person should be sought.
Dealing with Noise Disputes Noise disputes among owners can be one of the thorniest problems associations face. However, if an association acts quickly and assertively, it may be able to diffuse the dispute, or at least stay out of court. Attorney Paul Windust offers some strategies for handling noise disputes.
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Creative Problem Solving Have you ever thought, “So, what’s his problem?” Former law professor Katharine Rosenberry shares the result of her research on why persons frequently fail to identify the real problem in a dispute and how this interferes with solving problems creatively.
California Governor Vetoes CID Legislation On September 30, 2010, the last day possible, Governor Schwarzenegger vetoed four bills that would have had potentially significant impacts on the operations of associations. This article discusses those vetoes.
What It Takes to Get a Major Repair Done The industry generally defines major repair projects as any project costing more than $500,000 or that involves more than three different types of skills, such as carpentry, sheet metal, roofing, painting, etc. Major projects can take two or more years to complete. It is essential that a “project team” be put together to plan and guide the project before the first line of drawing is prepared.
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On the Cover Dealing With Noise Disputes —page 6 4
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How to make your investment safer Condos, townhomes, homeowner associations and other “shared expenses” housing is the wave of the future in the United States and around the world. But to make it a sustainable investment, new buyers, owners and volunteer board members need to understand “best practices basics” of how this form of housing works and have more realistic expectations of this form of “carefree, maintenance free” living. The new book, Condos, Townhomes, Home Owner Associations—How to Make Your Investment Safer, provides essential training and checklists for • Association Board Members • Owners in Associations • Prospective Buyers of Association Property The books answers vital questions that can help to keep your association from financial ruin: • What overview training should board members have before beginning their service?
• What critical financial and mechanical information should board members track each month? • What information should a buyer look for before buying in an association? The author provides lessons that help you to: • Protect property values • Gain peace of mind • Lessen the need for large, unexpected special assessments Patrick Hohman, author of the book and a 22-year association president, compiled these userfriendly, colorful lessons with the help of industry experts throughout the United States. The paperback, Condos, Townhomes, Home Owner Associations—How to Make Your Investment Safer, is now available from ECHO for only $29 for members and $45 for nonmembers. Order today by calling (408) 297-3246 or order online at www.echo-ca.org.
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By Paul W. Windust, Esq.
Upstairs, Downstairs Strategies for Dealing with Noise Disputes N
oise disputes among owners can be one of the most troublesome problems community associations and their managers face. Not only can they be expensive to resolve, they can cause community unrest and bad feelings. However, if a community association acts quickly and assertively, it may be able to diffuse the dispute, or at least keep the association out of court.
face flooring in its place. This upgrade occurs without application or notice to the architectural control committee. The first time the board becomes aware of the problem is when a complaint is made by the owner of the unit below. The usual complaints include increased noise from the upper unit—walking, voices, music, or television sounds.
Noise issues often involve a downstairs owner’s complaints of noise coming from the unit above. This frequently involves floor coverings, or the lack of them. The typical dispute has a common set of facts. An upstairs unit owner decides to upgrade by removing existing carpeting and installing hardwood or some other hard-sur-
Not all noise complaints relate to floor coverings. Some buildings lack sufficient soundproofing between adjacent units, allowing greater than normal sound transmission. Floor structures can lack sufficient rigidity, causing them to “creak” or “groan” when walked on. But the vast majority of such claims come from a downstairs unit
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owner reporting elevated noise levels after an upgrade to hard-surface floors. Floor coverings are part of a unit owner’s separate interest. They are not common area and the association will not usually have direct responsibility for their performance as it would with a defective structural element, for example. However, the governing documents may include floor covering provisions as part of the architectural guidelines that the association is charged to enforce. Also, the association can be responsible under the governing documents for abating a “nuisance” regardless of whether the nuisance involves a separate or common interest. CC&R Provisions Relating to Noise Transmission Here are three typical provisions found in community association governing documents. The first one prohibits hard-surface floors unless approved by the Architectural Control Committee and any change must provide sound insulation equivalent to the original carpet and padding.
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1. Floor Coverings No change in the floor covering materials as originally installed in the Units by the Declarant shall be permitted except with the consent of the Architectural Control Committee. To reduce sound transmission between Units, all Units shall have all floor areas except entries, kitchens and bathrooms covered with carpet or other material which provides equivalent insulation against sound transmission. Flooring in bathrooms shall be acoustical cushioned linoleum as originally installed by the Declarant, or material with the same or better acoustical quality and rating. The second example prohibits any change in floor covering that would increase noise: 2. Sound Transmission No Unit shall be altered in any manner that would increase sound transmission to any adjoining or other Unit, including, but not limited to, the replacement or modification of any flooring or floor covering or the penetration of any wall, floor or ceiling that increases sound transmissions to any other Unit. This last example sets objective noise transmission standards that must be met by any floor covering change: 3. Floors All changes to floors separating Units (tile, hardwood, stone, carpet, etc.) must provide code-compliant sound control properties for
airborne and impact sound insulation. In addition, the floor/ceiling assemblies must satisfy the higher sound control requirements established for the Project as set forth herein. The impact sound insulation rating of the floor ceiling assemblies after installation must be Field Impact Insulation Class (FIlC) 50 or higher. Airborne sound insulation rating thereof must be Noise Isolation Class (NIC) 52 or higher. If a flooring change is subject to architectural control, nuisance regulations, outright prohibitions, or objective standards, the association will usually be brought into the dispute.
If a flooring change is subject to architectural control, nuisance regulations, outright prohibitions, or objective standards, the association will usually be brought into the dispute. Responding to a Noise Complaint A complaint might be presented by the lower unit owner, who, armed with the CC&Rs, reports to the board that he or she is experiencing unreasonably loud sounds coming from the upper unit. Further, the owner reports that they are aware that the upper unit owner installed hard-surface flooring and demands that the association intervene and require the owner to remove the hardsurface covering and restore the carpet. At some point, the board will ask the upper unit owner to verify or deny the complaining owner’s version of events. A manager might be dispatched to investigate the claim by requesting an inspection. In many instances, the back and forth between the association and the upper unit owner can go on for months all to the frustration of the downstairs unit owner. Because noise and noise tolerance among individuals varies so much, the board usually has no idea of the
severity of the problem. Like eyes and beauty, noise lies within the “ears” of the beholder. The danger for the association in these situations is underestimating the severity of the problem and giving the appearance that the association is not willing to enforce relevant provisions of the CC&Rs—assuming they exist. In extreme cases, the downstairs owner could hire an attorney and file a lawsuit against the association for failing to enforce the CC&Rs. Unfortunately, if that happens, the association may discover that its liability insurance excludes claims arising from sound transmission. The association then would find itself embroiled in litigation that it must fund. Strategies to Avoid Litigation There are strategies the association can take to avoid the possibility of being on the receiving end of a lawsuit. In our view, quick, assertive action by the board can minimize the potential for litigation or at least strengthen the association’s case if it does get sued. If the CC&Rs exempt the association from enforcing “neighbor on neighbor” issues like noise complaints, the board should immediately advise the owners of that fact and leave the enforcement to the complaining owner. Unfortunately, the board’s duty in this regard may not always be clear. A review of the situation by the association’s counsel may be necessary to determine the proper course of action. If it is clearly the association’s obligation to enforce noise issues, either because they are a nuisance, require architectural control approval, or because they must meet an objective standard, the board of directors will be required to take action. Once involved, the board must weigh its commitment of association resources against the dictates of the governing documents. If it determines that the noise issue, from every objective point of view is really not that severe, the board should explain that while it is sympathetic to the sound issues that the lower unit owner is experiencing, the use of association resources to address what is largely a subjective problem does not make sense. For example, if the dispute does not involve a change in floor covering, but the upstairs neighbor just walks with a heavy foot, none of the CC&R provisions above would necessarily require board action. In that case the lower unit owner should be reminded that if the association were to intervene it would be using member assessments to cure a purely behavioral problem between two owners. Of
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course, the risk in taking a hands-off position is that the association may find itself embroiled in litigation involuntarily. But if the noise dispute falls squarely within a provision like one of those above, action may be required. In these situations, the association should tell the lower unit owner that it is reviewing the available enforcement remedies. Depending upon the provisions of the governing documents, this could include calling the upper unit owner into a hearing to discuss the flooring dispute and issuing fines to the upper unit owner if the board verifies that the floors were installed without approval and in violation of the governing documents. It could also include issuing a Notice of Noncompliance to the upper unit owner and including that notice in the unit file. If the board has determined to limit its enforcement of this dispute, it may want to make clear to the lower unit owner that its enforcement activities, while aggressive to a point, will not, for example, involve the filing of a lawsuit. In other situations, especially where the change in flooring material is a specific violation of the governing documents, the board may need to take a harder stance.
The association, in evaluating whether or not a breach of the governing documents has occurred, should interpret them narrowly where a subjective evaluation is involved. If the governing documents couch noise requirements in such terms as “equivalent insulation” or set objective standards for noise, a sound test by an acoustic engineer may be necessary. However, even if a sound test concludes that the sound transmission from the upper to the lower unit is within standards, that conclusion may do little to comfort the complaining lower unit owner. Further, some noise “standards” that are available in the housing industry are usually relatively easy to meet, meaning that compliance with them does not necessarily mean 10
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that the floors are “soundproof” or that the noise from above will not continue to be annoying. The association, in evaluating whether or not a breach of the governing documents has occurred, should interpret them narrowly where a subjective evaluation is involved. To do otherwise exposes the board to the risk of substituting its own judgment in place of the governing documents, unnecessarily bringing the association into a dispute that it has the right to avoid, and inviting litigation.
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Setting Conditions of Approval of a Flooring Change If the association’s CC&Rs give the board discretion to allow flooring modifications from carpet to hard-surface flooring, the board may wish to impose conditions on that approval. For example, it could require that the upstairs owner provide evidence of “insulation equivalency” by means of a sound test or laboratory data. Where the “standard” has been met, but the noise from above could still be objectionable, the board may want to reserve the right to require the upper unit owner to use area rugs or runners to mitigate the sound transmission. In any approval of flooring changes, the board should also require that the owner of the unit requesting the flooring change defend and indemnify the board against any claims made by third parties related to the flooring change. This will ensure that, if the association does get sued, it can look to the upper unit owner to fund its defense. Noise issues are subjective and no two owners will perceive them alike. The association’s obligation is to enforce the CC&Rs as they are written, but it must also respect the rights of both the upstairs and downstairs owners to the greatest extent possible. But once the association board of directors has given both parties notice and an opportunity to be heard on the issue, it should determine its course of action and stick with it. Anything else will simply create more opportunities for debate.
Paul Windust is an attorney at the Alamo Office of Berding|Weil. He participates regularly in the activities of the ECHO Legal Resource Panel, speaks at ECHO seminars and writes articles for the ECHO Journal.
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By Katharine Rosenberry, Esq.
Creative Problem Solving Requires Identifying the Real Problem ave you ever said or thought, “So, what’s his problem?” The comment is usually made in frustration but is a very legitimate question. I was once hired as an expert in a case in which John sued his neighbor, Sam, alleging that Sam’s fence was five feet high when the covenants said it should be four feet. The lawsuit made sense to me because Sam’s fence blocked part of John’s view of the ocean. That is, it made sense until I discovered that the covenant was going to expire, and therefore be unenforceable, before the case could go to court. After investigating, I discovered the case wasn’t
November 2010 | ECHO Journal
really about the fence. Although the parties didn’t consciously know it, the case resulted because John believed Sam was thoughtless when John’s son died of leukemia. Because I was co-director of the Center for Creative Problem Solving at the time, I decided to research the reasons we so frequently fail to identify the real problem in a dispute and how this interferes with solving problems creatively. This article shares some of the results of that research. We all have a variety of lenses through which we view the world. These lenses arise from factors such as the countries and
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families in which we were raised, our gender, our professional training, and the way our brains are created. To demonstrate the fact, please read the following scenario and decide quickly if an assault has occurred. Legally, an assault occurs when a person fears being touched in a harmful or offensive way. One doesn’t need to be actually touched for an assault to occur. Scenario: A condominium owner discovers a lien has been placed on the person’s property for failure to pay assessments. The owner is very upset and goes to the property manager to complain. The owner and manager argue and the manager raises an arm toward the owner. The owner falls. Was there an assault? Jot down your thoughts before you continue reading. Did you think the owner and manager were male or female? How big were they? Did you visualize gender? Some people don’t visualize gender even though they visualize people. Was the owner afraid? Was the manager’s conduct appropriate? Who was at fault? One interpretation is that the owner was a woman who didn’t pay her assessment because she had lost her job. She knew her neighbors and didn’t want them to think she was a deadbeat. She was a nice person but very upset about the lien. The manager was a small man who supported his elderly mother in a nursing home. He was afraid if he didn’t file the lien and try to collect assessments he would lose his job. He, too, was a nice person. When the woman began arguing, he raised his arm politely to show her the door. When heading toward the door she tripped on the carpet. No assault occurred. There is a good chance that not every reader interpreted the facts in the same way. Our brains are designed to make quick decisions. If we had to do a thorough analysis of the safety of our cars every time we drove, we wouldn’t do much driving. The necessity for quick decisions makes us both fill in facts that don’t exist and ignore facts that do so that the situation can fit our patterns or preconceived notions. We know the brain jumps to conclusions in order for us to function, but what assumptions does it make when jumping to its conclusions? First, all mentally healthy people assume their values are the norm or normal. We generally assume that people who act, look and sound like us are more likely to be normal or reasonable, and we are more likely to like them. This wiring obviously impacts
our relationships in the multi-cultural environment that exists in California. Our brains may force us to make automatic assumptions based on our core values. But the more conscious we are of our assumptions, the more likely we are to realize that others with a different set of core values also assume their assumptions are â€œnormal.â€? Recognizing these differing assumptions can lead to solving problems more creatively. If I am from an individualist society like the U.S., I am likely to assume that I am responsible for myself. I work hard and want to be recognized for my hard work. Fixing problems and honesty are both likely to be important to me. The importance of the individual is demonstrated by the fact that English is the only language that capitalizes â€œI.â€? If my values have been shaped in a collectivist society, like many of the Asian societies, the group to which I belong is much more important than my individuality. I owe a strong loyalty to the family and community. Honesty is not as important as group harmony and saving face. What impacts do these different approaches to life have in solving community association problems? If my values are formed in a collectivist setting where the in-group is the more important than the individual, I may think it perfectly appropriate to give preference to family members in hiring. I spoke once with an association manager from Mexico who was miserable because he had to lay off several of his workers. He said, â€œOf course my cousin will stay though.â€? He assumed this was what everyone would do under similar circumstances. If I have an individualistic approach, I may assume that in order to solve a problem we need to share all the information we have. Someone using a collectivist approach may assume we only share information with the in-group and that everyone knows sharing information that reflects poorly on oneâ€™s family is wrong. To someone from an individualist society it may appear that the collectivist is sneaky or secretive rather than â€œnormal.â€? To someone from a collectivist society it may appear the individualist is self-centered and disloyal. But it is possible to work around these different approaches if one is conscious of them. A person from a society where the ingroup is the most important core value may even feel itâ€™s appropriate to lie for a member of the group. In Business Across Cultures the
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authors discuss giving a group of Venezuelans were given the following choice. “You are a passenger in a car. Your friend is driving 35 miles per hour. He hits someone. If you are willing to say he was driving 25 mph, the legal speed limit, he will get off.” Sixtyseven percent of the Venezuelans said they would lie in court. They considered this the appropriate thing to do. The relationship is a more important core value than honesty. When someone lies to me, my immediate response is to be resentful, think less of the person and not trust him or her. I don’t think about the fact that I told my son, and now grandchildren, that Santa Claus and the tooth fairy are real. And how many of us would lie to save the life of a family member? Lying is even built into our law. One can’t successfully sue a used car salesperson for saying, “This is the best car you can find for the money” even if it is not. Society and the law assume we know what the ground rules are. Used car salespeople exaggerate. Similarly in a collectivist society it is assumed everyone knows the ground rules. There are situations where lying for a family member is appropriate.
In an association setting, if the board knows someone is lying they may wish to step back and try and figure out the reason. In an association setting, if the board knows someone is lying they may wish to step back and try and figure out the reason. Is the person simply following his cultural norms and is trustworthy in other settings, or is the person just dishonest? Our attitude toward the person makes a difference in how creative we are willing to be in working with that person when trying to solve a problem. Attitudes toward contracts reveal other cultural differences. Many in the U.S. assume once a contract is signed “a deal is a deal.” If the conditions change to disfavor one party, so be it. In other societies, it is assumed that if conditions change it is immoral not to change the contract because the relationship is more important than the document. You 16
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can see how unconscious assumptions lead to misunderstanding and assumptions about the other person’s moral character. I gave the scenario about the condominium owner who didn’t pay her assessments to 200 law students. I changed the facts in many ways to see how different facts affected their conclusions. For example, I said the manager was a football player and the owner was a small female, the manager was angry, the woman was aggressive. At the end I said, “Assume both parties are well intentioned.” Two hundred faces relaxed. I was surprised and asked them why their faces relaxed. They said that if the parties are both well intentioned, it will be possible to work out an amicable arrangement. An association is likely to save money and stress if they initially assume the parties are well intentioned and are just seeing the world through different lenses. Sense of time is another filter or cultural lens. I once worked with a group of 20 people from about 15 different countries and asked them to write down how late one could be for a business meeting and a social dinner without apologizing. Times for the business meeting ranged from “one should not be late for a business meeting” to “one can be 30 minutes late without having to apologize.” Times for the social dinner ranged from 20 minutes late in the U.S. to three hours late in a Middle Eastern country. Not all cultures pay as close attention to the clock as the U.S. In some cultures it is appropriate for a business meeting to start late because a previous conversation wasn’t finished. It may also be appropriate to have a business meeting interrupted by family members. Relationships are more important than the schedule. Different perceptions of time obviously have an impact on meeting schedules and perhaps even late assessments. One person’s version of “late” can be another person’s version of “on time.” One person may assume someone who is late is disrespectful. Another may assume one who is precise about time is uptight. Again, if we assume the parties are well intentioned but just have different perceptions of time, we can find solutions to the problems without resorting to expensive dispute resolution systems. Another cultural difference that can affect association interaction is the importance of hierarchy. In some societies hierarchy is extremely important. When working with a Chinese audience, I changed the facts in the scenario and said the owner was 30 and the ECHO Journal | November 2010
manager was 75. At that point the discussion stopped. The group concluded the owner was clearly at fault because he was disrespectful of his elder. It didn’t matter what the owner and manager did; the younger person was at fault. In the U.S., we value equality. For example, law professors will strongly defend equality under the law. But those same people also strongly defend the seniority system for picking offices. I don’t know of any junior professor or lawyer who has the best office. When I asked some of my colleagues the reason for defending the seniority system, they said it prevented arguments. This is the same rationale used in societies that are hierarchal. Everyone knows the ground rules and everyone knows their rights so it is easier for harmony to prevail. How can attitudes toward hierarchy impact an association setting? When I needed an older woman who was from India to comply with a covenant, I first assumed she didn’t realize she was violating it. I assumed good intentions. Then, when I spoke with her, I slipped in a conversation about grandchildren because I knew hierarchy based on age was part of her cultural upbringing. I assumed she could relate to me better if she knew we were the same age, and she did. I need to give a note of caution here. We are all individuals. Just because someone looks Japanese obviously doesn’t necessarily mean they share traditional Japanese values. We are the product of many cultures—country, family, gender and age. I have discovered many of my own unconscious assumptions in cross-cultural workshops where I was a participant. Some of those assumptions are reflective of the country in which I was raised and some are not. For example, in a business setting I am a typical individualist, which didn’t surprise me. But I discovered in my family setting I might as well have been born in Japan, because I have collectivist tendencies. I wasn’t conscious of this. Knowing about cultural lenses or filters can at least give us some basis for being more creative in identifying the way different people (including ourselves) perceive the problem and in finding more creative solutions. Communication styles also lead to misunderstanding. Some societies, like the U.S., use a direct style of communication. In the U.S. it is the responsibility of the speaker to be clear. For example one might complain, “My neighbor’s dog is driving me crazy 18
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because it barks all the time.” Other societies use an indirect style. In these societies it is the responsibility of person hearing the communication to decipher the message. In these societies the same complaint might be phrased, “My neighbor just got a new puppy. It is so cute and active.” The board may not hear the second person’s real message, resulting in the person feeling the board is not respecting them. In our society not looking someone in the eye when speaking can be considered shifty. However in other societies a person who has less status (perhaps based on age) is not supposed to look into the eyes of the person with more status. It is disrespectful. You can imagine how thinking someone is shifty or disrespectful can affect the relationship between the parties and their idea of what the real problem is in an association setting.
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These and many, many more cultural lenses can be learned through interactive exercises. While we can never really know the lenses through which another person sees the world, we can learn how to be more culturally sensitive or consult those who are. This increased awareness can help us reduce stress and save money in solving problems. Assuming we want to be more creative in solving problems, how might we approach a problem? First, assume all parties are well intentioned. They are just viewing the situation through their own set of lenses. I know it may not be true, but it is a good place to begin. Second, assume the way we are viewing the problem isn’t necessarily the correct one. Consider other possible ways of viewing the problem. For example, how would one view the situation if one needed to save face or had a different concept of hierarchy or time? Third, how does viewing the situation through a different set of lenses affect your approach to solving the problem? Some may think we shouldn’t have to go through this effort. But, if the ultimate goal is solving the problem with less stress and less money, isn’t the effort worth it?
Katharine Rosenberry was a property professor for 30 years and co-director of the Center for Creative Problem Solving at California Western School of Law. She is engaged in problem solving for community associations, which she has done for over 25 years, and gives seminars about creative problem solving in a multi-cultural world. You can contact her at firstname.lastname@example.org.
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By Steven S. Weil, Esq. and Sandra M. Bonato, Esq.
Governor Declines to Interfere With CID Operations n California, it takes a veto by the Governor to reject bills approved by our legislature. On September 30, 2010, the last day possible, Governor Schwarzenegger vetoed four bills that would have had potentially significant impacts on the operations of common interest developments and their associations.
As reflected in his veto messages discussed below, the Governor clearly respects the integrity of governing documents and the
November 2010 | ECHO Journal
right of owners to vote to change the governing documents to reflect the unique circumstances of each community, without undue legislative interference. ECHO’s position on each bill and its involvement in their journey to the Governor’s desk are also discussed below. AB 1726 (Swanson) “Reduced Quorums” Notice of Executive Sessions AB 1726 would have permitted a quorum to be
reduced in director elections, even where bylaws do not provide for reduced quorums. The bill would also have specifically required the posting of a notice and agenda for executive sessions of the board of directors. In his message to the Assembly explaining his reasons for refusing to sign the bill, the Governor said the first of these changes was unnecessary since members
Continued on page 22
ECHO Journal | November 2010
can amend the bylaws to provide for reduced quorums, if they don’t already contain them. He concluded that the bill would “interfere with the basic democratic principle of CIDs.” The Governor’s message did not address the part of AB 1726 (belatedly inserted by its author without notice) that would have required executive sessions to be noticed and agendized. Some suggest this requirement already exists, while others believe that state law instead calls for general disclosure of executive sessions at the next open meeting of the board but not before. ECHO ultimately took a position against this measure. It had grown increasingly convoluted and unclear in both its drafting and in the process it proposed. It even had added a “sunset” provision (meaning that the reduced quorum changes were something of an experiment that might need to be pulled back). ECHO also believed that the proposed change that impacted executive session needed open debate, where there had been none in the late days of the session.
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November 2010 | ECHO Journal
AB 1793 (Saldaña) Artificial Turf AB 1793 would have required an association to allow the installation of artificial turf on privately-owned lots, notwithstanding traditional principles of architectural control. A classic CC&R override, the bill at most have only allowed associations to regulate characteristics like quality of product, color and workmanship. As many of you know, the Davis-Stirling Common Interest Development Act and federal law do not permit an association to use aesthetic criteria to wholly ban certain items in CIDs. Examples are solar energy systems, satellite dishes, real estate and political signs, and drought-tolerant plants as a class. The addition of fake grass as yet another category of “protected improvement” seemed an unwarranted incursion into community selfdetermination, however, and some objected on the bases of hygiene, heat and undirected run-off. In a refreshing and well-stated message to the Assembly, the Governor wrote: CIDs provide a system of self-governance through a community association responsible for managing, maintaining, and repairing common areas, and have the authority to enforce special rules. Decisions such as these regarding the use of artificial turf can be made by the homeowners and amended into their documents. While ECHO had supported prior bills that encouraged water conservation in CIDs,
the Legislative Committee felt AB 1793 went too far and stood in opposition to the bill. A top-down, one-size-fits-all approach doesn’t take into consideration the principle of community self-governance and the wide variety of CIDs in the state. AB 1927 (Knight) Regulating Rental Restrictions AB 1927 started as an ambitious effort to limit the ability of association members to amend governing documents to limit the number of units or lots in a community that can be leased or rented at any one time. Many associations are considering such amendments to better comply with tightened lending guidelines and to generally enhance enforcement of the governing documents.
In rejecting the bills, the Governor chose to speak up for the principle of community self-determination. In rejecting the bill, the Governor again chose to speak up for the principle of community self-determination. In refusing to sign the bill, he wrote in his message to the Assembly: “The right to rent... is an important right of a homeowner. ...[T]here is insufficient evidence to indicate that rental restrictions are a widespread problem to justify such a wide ranging rule change. Furthermore, current provisions in law provide for an amendment process for HOAs to make rule changes. ...[T]herefore, I believe this bill is unnecessary at this time.” ECHO’s opposition to AB 1927 was largely, but not solely, based on serious concerns about mortgage lending underwriting standards that today look closely at non-owner occupancy in CIDs in making loans to owners and buyers. Placing impediments in the way of community decision-making in adopting CC&R amendment rental restrictions is untimely. While the bill might ultimately have been acceptable with certain changes, the intended subtleties built into the measure were troubling and could have created legal liability for associations interpreting and applying it honestly but incorrectly.
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Until property values stabilize and modern mortgage underwriting is better understood, bills that promote the unfettered ability to rent could exacerbate a steadily worsening problem of not being able to finance or refinance separate interests. This, in turn, would damage property values in CIDs even more. AB 2485 (Feuer) Construction Defect Mediation Claims California law contains both a developer “fix it” law (in Title VII of the Civil Code) and a mandatory mediation process (referred to as the “Calderon process”) contained in the Davis-Stirling Act. Both are intended to facilitate the resolution of construction defect disputes in common interest developments. If an association and developer cannot resolve a dispute during the Calderon process and suit is filed, Civil Code section 1375.05 provides for specified court procedures to assist the resolution. That procedural portion of the law will be repealed at the end of this year unless its terms are extended. AB 2485 would have done so. Unfortunately, the bill also contained unrelated provisions concerning court fees to
be paid when out-of-state attorneys appear in local courts. The Governor felt that the increased fee should be addressed in a different and more comprehensive bill and so returned it all to the Assembly. The legislature’s failure to extend section 1375.05 will mostly impact the legal strategies that attorneys employ in bringing cases to trial that do not resolve during the Calderon mediation process. California Law Revision Commission Davis-Stirling Restatement Project / Also, Non-Residential CIDs The California Law Revision Commission continues its extensive effort to restate the Davis-Stirling Act. The Commission’s progress can be tracked online at www.clrc.ca.gov. The Commission’s goal is to clarify, simply and better organize DavisStirling, largely avoiding intentional substantive changes to the law at this time. The Commission’s current goal is to finalize its draft restatement and bring it to the legislature to become a bill in early 2011. Assuming ultimate passage through the legislature, the Davis-Stirling restatement project will likely not go into effect until 2013
or later. We expect there would be a transition period of a year to help communities subject to Davis-Stirling “get up to speed” before the operative date of the restated law. Independent of its restatement project, the Commission has undertaken an effort to separate the portions of the Act that relate to strictly residential and mixed-use projects from those that are exclusively commercial or industrial (non-residential). Progress on this effort continues.
Steven Weil is one of the founding principals at Berding/Weil LLP in Alamo. He has practiced community association law since 1984 and has dealt with virtually every kind of challenge facing directors, managers and community association members. He is a member of the ECHO board of directors. Sandra Bonato is a principal at Berding & Weil, who practices in the corporate and business law department, specializing in real property and common interest development law. She is a member and past chairperson of the ECHO Legislative Committee. ECHO Journal | November 2010
By Richard Tippett
What It Takes to Get a Major Repair Job Done he industry generally defines major repair/reconstruction projects as any project costing more than $500,000 or that involves more than three different types of skills, such as carpentry, sheet metal, roofing, painting, stucco, waterproofing and the like.
Major projects can take two or more years to complete. This may be due to the size of the project or
November 2010 | ECHO Journal
to a shortage of funds. Sometimes it simply takes time to arrange a loan, do a special assessment, or otherwise raise the money. During this length of time membership on the board of directors may completely change. The board may replace their property manager. There may even be a large Continued on page 26
ECHO Journal | November 2010
Major Repair Continued from page 24
turnover in unit ownership, as older residents sell and new owners move in. Because of this it is essential that a “project team” be put together to plan and guide the project before the first line of drawing or specification is prepared. Equally important is the establishment of lines of communication that will survive the inevitable personnel changes in project guidance. These lines of communication should be put in place at the same time that the project team is selected.
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Setting Up the Team The size of the team will vary with the size and scope or difficulty of the project, the amount of record keeping that the association wants and the money available. The amount of money available, or the amount that the board is willing to spend, generally becomes the governing factor that sets the size of the team. Associations seldom have more money than they need just to do the work, let alone manage it to ensure the work is correctly done. This needs to be rectified. There are several different team members. Not necessarily in their order of importance, they are: Board of Directors These are the people that set or modify the budget, pick the team members, sign the contracts and are ultimately responsible for the success or failure of the project. They control the money and sign the checks. All of the team members report to them. Reports to: General Membership Construction Manager The construction management company should be the first team member selected by the board. The construction manager will be the board’s agent for the day-to-day management of the project. On smaller or less complex projects the construction management firm may incorporate all of the remaining team members except the attorney and finance professionals. Reports to: Board of Directors Architect/Specification Preparer No work should be done or even put out for bids before specifications are prepared for the work. Without a clear set of specifications there is no way to be certain that you are receiving comparable bids from contractors.
Without a clear set of specifications there is no way to control the quality of the work. What the contractor’s management understands may not always filter down to the journeyman on site. Without an architect/specification preparer the board has no source for answers to technical questions beyond the contractor, whose technical knowledge may be limited or biased. Reports to: Construction Manager Structural Engineer If the work includes correction of dry rot that has spread into major structural members, a structural engineer is required. Most building departments require “wet stamp” structural calculations and drawings of the structure to be replaced. In some cases, building codes have changed and stronger structural members may be required. These changes need to be included in the specifications for the work. Reports to: Architect or Construction Manager Attorney Your association is about to spend a very large sum of money. You want the strongest possible assurance that those doing your work will give you your money’s worth, and that they will pay their subcontractors, suppliers and employee benefits. No one will prepare a better contract that is more for your benefit than your attorney. Reports to: Board of Directors Financial Specialist, CPA or Bank Officer Over the course of the work CDs will need to be cashed or rolled over, lines of credit drawn upon, checks written and disbursed. An essential part of the planning stage is figuring out “where the money will come from” and, if borrowed, “what the cost will be.” Without proper financial planning and execution, the project either will not happen or will be severely curtailed. Reports to: Board of Directors Developing the Scope of Work Associations are usually made aware of the need for major repairs one of three ways: 1. They are the legacy of a completed legal action. 2. They are scheduled, i.e.; reroofing, rewaterproofing of decks, replacement of water heaters, etc. 3. Problems are discovered as the result of a failure, for example: dry rot in deck and walkway structures.
In all three instances a second look at the need for repairs, and the extent of repairs needed, is essential. 1. Lawsuits almost always include items that do not need immediate attention, or do not need to be as expensively repaired as was alleged in the lawsuit. 2. Scheduled major repairs may be postponeable. Just because the roof is eighteen or twenty years old, for example, doesn’t mean that it has to be replaced. What if it doesn’t leak? 3. If rot was found in one wooden structure, it likely exists in other similar ones as well. This is where triage is required: 1. What is/are the extent of the problem(s)? 2. Which problems are life/safety issues or affect the life of the structure? 3. Which problems must be addressed now and which can be put off for a specified length of time? 4. Which projects will become major repairs and which projects can be handled almost as a part of normal operations? Here is where the construction manager begins his work with the board, helping set the priorities and developing budget cost estimates. Developing the Budget Once the board, with assistance, determines which projects to undertake (and their cost), the next question to answer is “ where will we get the money?” There are several sources: 1. The reserve account (usually underfunded). 2. The lawsuit settlement (never enough). 3. Special assessment. 4. Annual fee increases. 5. Reconstruction loan. Here the key to success is to determine the total cost of the project, including the cost of the project team, and all likely contingency costs. Subtract funds available from this amount. The difference is the amount of money that will have to be raised. NOTE: it is possible to begin work before the money that needs to be raised is actually “in hand.” Work should not be started until the board has a vote of the membership formally approving the funding, and until agreement is reached with the contractor regarding payment. More Triage Once the scope of work is settled upon and a preliminary budget started through the ECHO Journal | November 2010
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funding process the board and construction team begin a second, closer look at the project. A further risk analysis is done. This should include additional field investigations to quantify better the number and type of repairs needed. Surveys done for litigation are random and are not adequate to accurately plan reconstruction. A deeper look at the various options for making the major repairs is next. There is always more than one way to do things. There are always alternate materials available. It may even be economically wise to institutionalize a design defect as a maintenance item. A second look at reserves is essential. Major repairs/reconstruction, by accelerating scheduled replacement or by changing to materials with longer working lives, may free up more money for the present project. Plans and Specifications for the Project These should grow organically from the project scope of work. Specifications should spell out exactly what work is to be done, where it is to be done, what materials are to be used and the 28
November 2010 | ECHO Journal
way in which the materials are to be installed or applied. Specifications for major projects are neither small nor simple documents. They can easily be more than 100 pages in length. They set parameters for job safety, care of the property and residents during work, quality control, control contractor access to the site, set payment, insurance and lien requirements, and many other conditions in addition to the work itself. They also set forth warranty requirements for the work. These should be realistic and should be backed by material manufacturers whenever possible. The State of California requires a three-year warranty; the uniform commercial code requires five years. Do not rely solely on specifications prepared by the contractors bidding the work. They will not be complete, and they will not favor your association. Have the specifications prepared by your project team. Pre-Qualifying the Bidders Not every contractor is qualified to do every type of major project. Some don’t know how, some are too small, some are too large. Some contractors are not temperamentally
suited to doing work for associations and prefer commercial work. Some don’t carry sufficient insurance. Some can’t/won’t provide the specified warranties. Others are “cash poor” and simply don’t have the financial resources to do major projects and carry the retention required. Some may be large enough, willing enough and knowledgeable enough and may also be more unprincipled or more questionable professionally than you want to deal with. It is far better to send your work out for bid to a pre-qualified list of bidders than it is to simply advertise the work publically and hope for the best. Things to be considered when pre-qualifying bidders include and are not limited to the following types of information. 1. License status: Is it current? Is it clear of complaints? Is it held by one of the firm’s principals? 2. Length of time in business. Companies must have been in business at least five years. 3. Experience doing the type of work that you want done. The company must have at
least three years’ experience doing the type of work to be done. Insurance. Companies must have at least $3,000,000.00 general liability, plus workman’s compensation and vehicle insurance. Professional reputation. Do past clients going back several years report favorably on the contractor’s work and service record? Financial strength. Is the contractor capable of doing two or more projects of your size or are you about to become his sole means of support? Does he have sufficient financial reserves? Payments to subcontractors/suppliers. Does he make these payments in a timely manner? Does he have a long-term working relationship with both? Compatibility. Are the contractors you are considering people whom you would feel comfortable working with if they are the low bidder?
There should be at least monthly meetings between the board and the construction manager including a full report of what has been accomplished. Construction Management Communication Once work is underway the need for clear, frequent communication between team members becomes even more important. There are changes in conditions and change orders to deal with, owner complaints, payments to arrange, changes in the schedule because of many things, access to units to be arranged and a myriad of other things to be taken care of. The construction manager and general contractor’s superintendent both need a daily point of contact with the board that can act for the association. There should be at least monthly meetings between the board and the construction manager, including a full report of what has
Bans on Smoking in Multi-Unit Residential Communities Continue to Pass The regulation of secondhand smoke is becoming increasingly more common, farreaching, and restrictive of smokers. With zero discussion, the Menlo Park City Council recently waived a second reading of a revised smoking ordinance last week, thus making new laws official. The changes go into effect Nov. 29. While residents can still smoke within their own apartments, or while walking in the street, common-use areas of multi-unit housing will become smoke-free zones. In April 2010, San Francisco approved and signed into law a new ordinance that, amongst other things, prohibits smoking in common areas of multi-unit housing complexes and areas outside entrances, exits,
and operable windows and vents of buildings. The ordinance, which applies to most San Francisco condominium and cooperative projects and to some planned developments, establishes obligations for property owners and property managers to prevent smoking in prohibited areas and provides for administrative procedures and penalties for violations of the regulations. Santa Clara County passed a stringent ordinance Oct. 19 that bans smoking in residential units and limits smoking to areas beyond a 30-foot radius of multi-unit housing. It applies only to unincorporated areas of the county. It is expected to be finalized on Nov. 9 after a second reading.
Continued on page 33 ECHO Journal | November 2010
News from ECHO California Law Revision Commission Davis-Stirling Restatement Project The California Law Revision Commission continues its extensive effort to restate the DavisStirling Act. The Commission’s goal is to clarify, simply and better organize Davis-Stirling, largely avoiding intentional substantive changes to the law at this time. The Commission’s current goal is to finalize its draft restatement and bring it to the legislature to become a bill in early 2011. The Commission’s progress can be tracked online at www.clrc.ca.gov. Assuming ultimate passage through the legislature, the Davis-Stirling restatement project will likely not go into effect until 2013 or later. We expect there would be a transition period of a year to help communities subject to Davis-Stirling “get up to speed” before the operative date of the restated law. Independent of its restatement project, the Commission has undertaken an effort to separate the portions of the Act that relate to strictly residential and mixed-use projects from those that are exclusively commercial or industrial (non-residential). Progress on this effort continues.
Strategies for Dealing with Noise Disputes Noise disputes among owners can be one of the most troublesome problems community associations and their managers face. Not only can they be expensive to resolve, they can cause community unrest and bad feelings. However, if a community association acts quickly and assertively, it may be able to diffuse the dispute, or at least keep the association out of court. Noise issues often involve a downstairs owner’s complaints of noise coming from the unit above. This frequently involves floor coverings, or the lack of them. The typical dispute has a common set of facts. An upstairs unit owner decides to upgrade by removing existing carpeting and installing hardwood or some other hard-surface flooring in its place. This upgrade occurs without application or notice to the architectural control committee. The first time the board becomes aware of the problem is when a complaint is made by the owner of the unit below. The usual complaints include increased noise from the upper unit—walking, voices, music, or television sounds. Not all noise complaints relate to floor coverings. Some buildings lack sufficient soundproofing between adjacent units, allowing greater than normal sound transmission. Floor structures can lack sufficient rigidity, causing them to “creak” or “groan” when walked on. But the vast majority of such claims come from a downstairs unit owner reporting elevated noise levels after an upgrade to hard-surface
November 2010 | ECHO Journal
floors. Floor coverings are part of a unit owner’s separate interest. They are not common area and the association will not usually have direct responsibility for their performance as it would with a defective structural element, for example. However, the governing documents may include floor covering provisions as part of the architectural guidelines that the association is charged to enforce. Also, the association can be responsible under the governing documents for abating a “nuisance” regardless of whether the nuisance involves a separate or common interest. Noise issues are subjective and no two owners will perceive them alike. The association’s obligation is to enforce the CC&Rs as they are written, but it must also respect the rights of both the upstairs and downstairs owners to the greatest extent possible. But once the association board of directors has given both parties notice and an opportunity to be heard on the issue, it should determine its course of action and stick with it. Anything else will simply create more opportunities for debate.
What It Takes to Get a Major Repair Job Done The industry generally defines major repair/reconstruction projects as any project costing more than $500,000 or that involves more than three different types of skills, such as carpentry, sheet metal, roofing, painting, stucco, waterproofing and the like. Major projects can take two or more years to complete. This may be due to the size of the project or to a shortage of funds. Sometimes it simply takes time to arrange a loan, do a special assessment, or otherwise raise the money. During this length of time membership on the board of directors may completely change. The board may replace their property manager. There may even be a large turnover in unit ownership, as older residents sell and new owners move in. Because of this it is essential that a “project team” be put together to plan and guide the project before the first line of drawing or specification is prepared. Equally important is the establishment of lines of communication that will survive the inevitable personnel changes in project guidance. These lines of communication should be put in place at the same time that the project team is selected. Important Upcoming Events Saturday, February 5, 2011 Marin County Seminar 8:00 a.m. to 1:00 p.m. Embassy Suites, San Rafael Saturday, March 5, 2011 Central Coast Winter Seminar 8:00 a.m. to 1:00 p.m. Hilton Santa Cruz, Scotts Valley
2010 Legislation at a Glimpse Final Results Bill No.
Voting Quorums Vetoed by Governor.
In the event that there is not a quorum for a member meeting or an election of directors, would automatically reduce the quorum requirement for the next meeting to 40 percent, and then to 33 percent of the association’s voting power. Exempts associations whose documents establish a lower quorum requirement.
Synthetic Grass Vetoed by Governor.
Voids provisions in governing documents that prohibit the use of artificial turf or any other synthetic surface that resembles grass. Allows associations to adopt rules that establish design and quality standards.
Vetoed by Governor.
For governing documents initially recorded on or after January 1, 2011, requires that a majority of all owners vote to approve rental or lease restrictions. Requires owners to disclose rental restrictions prior to transfer of title.
Oppose unless amended
Requires a water purveyor to either adopt a general policy to require the installation of either a water meter, or a submeter, to measure water supplied to each individual dwelling unit, or to inform, on an individual basis, an applicant for new water service as to whether a water meter or submeter is required to be installed for each individual dwelling unit.
Signed by the Governor. Chapter 131.
Clarifies that a request by an association for notification of a trustee’s deed of sale does not constitute a request for a document that either effects or evidences a transfer or encumbrance, or that releases or terminates any interest, right or encumbrance, of an interest in real property.
Mobilehome Law Disclosure
Signed by the Governor. Chapter 90.
Each year, would require that the management provide a copy of the Mobilehome Residency Law to each resident, or send a notice when a significant change is made and inform residents that they can obtain a copy by submitting a request.
Regulates third parties performing collection services for HOAs, as well as the formation of payment plans between associations and delinquent members. Allows members to have counsel present when discussing a payment plan, provided they give 48 hours notice to the association.
Provides that a stock cooperative or community apartment project for senior citizens established before the DavisStirling Act, that is converting to a condominium, shall not be required to file a condominium plan to the Department of Real Estate.
Signed by the Governor. Chapter 27.
When a property is purchased at a foreclosure sale and is not being maintained, requires a governmental entity to provide notice of violations to the property owner before imposing fines for nuisance abatement.
ECHO Journal | November 2010
Directory UPDATES Updates for listings in the 2008 ECHO Directory of Businesses and Professionals.
New Member Listings Louis & Associates 275-A Technology Circle Scotts Valley, CA 95066 Contact: Kathleen Bennett Tel: 831-439-0180 Fax: 831-439-0188 www.whyreroof.com Email: email@example.com
Changes to Member Listings 6 6(59,1*&20081,7,(67+528*+2871257+(51&$/,)251,$672&.721+4 Â‡)5(0217 (59,1*&20081,7,(67+528*+2871257+(51&$/,)251,$672&.721+4 Â‡)5(0217 PLEASANTONÂ‡&233(5232/,6Â‡02'(672Â‡6$17$&/$5$ PLE ASANTONÂ‡&233(5232/,6Â‡02'(672Â‡6$17$&/$5$
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November 2010 | ECHO Journal
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Major Repair Continued from page 29
been accomplished in the past month, what is scheduled for the next month, what schedule changes have developed and what change orders are in process. There should be weekly meetings between the construction manager and the general contractor addressing the same topics. All schedule changes, change orders and meeting minutes must be in writing. This is the absolute bare minimum of communication that is required for successful accomplishment of major repair projects. Change Orders These should always be in writing and for a fixed amount, and should always be approved before the work is done. Submittals by the Contractor The architect, prior to the bid or job start, cannot economically prepare some of the details of assembling different parts of the work. Some can’t even be determined until the work is underway.
The only way to ensure that there is agreement between board, manager and contractor is for the contractor to submit shop drawings. Some of the products that the contractor wants to use may be different from what was specified. There are always existing colors, materials and textures to be matched or new colors, materials or textures to be selected. The only way to ensure that there is agreement between board, manager and contractor is for the contractor to submit shop drawings of construction details and samples of materials for the board or the manager’s review and approval. Level of Documentation Everyone knows that “time is money” and documenting what occurs on a major Continued on page 42 ECHO Journal | November 2010
By Patti Jo Lewis, PCAM
Xeriscaping Saves Money and the Environment
ow can homeowners and communities alike make changes that will have a positive affect on the environment, reduce the dependency on our natural resources, and ultimately save money? The solution is xeriscaping.
What is Xeriscape? Xeriscape promotes the goal of water-efficient landscaping. It is not necessarily a large yard of gravel, but more an attractive landscape with low water usage and droughthardy plants and materials. These plants thrive in desert or sandy soil and hot climates. Reduced or no turf is one of the main components of a xeriscaped environment. 34
November 2010 | ECHO Journal
Why Xeriscape? • Lawn turf uses up to twice the amount of water than a xeriscaped landscape will consume. • There is much less maintenance to deal with. No lawn mowing, monthly fertilizing, edging, and annual dethatching and aerating. • Very time consuming to care for turf and landscaping on a weekly basis. • If you hire a landscape service to maintain your turf landscape, you can eliminate this expense. • According to Colorado Water Wise, a good xeriscape can increase property values by 15 percent.
• Cities and towns with water restrictions during heavy drought periods will not permit homeowners to water yards. • For many homeowners, turf areas are not used by adults, children, or pets; so replacing that area with xeriscape will not affect lifestyles. • Comply with social pressures of protecting the environment and set an example for others to follow. How to Xeriscape First, look to your state, county, city or town regarding financial incentives and rebate programs that may be in play for con-
Helping to Build Stronger Communities
compassion is universal
Common Interest Management is proud to be a sponsor of Shanti and its community of volunteers who provide emotional and practical support to San Francisco’s most vulnerable individuals living verting from turf to xeriscaping. These monetary incentives are prevalent in arid regions.
• Draw a map of the lawn area, noting which areas are the sunniest and which are the shadiest parts. Keep in mind that the site’s exposure to sunlight will also vary at different times of the year.
Look At Your Various Zone Types • Oasis—close to a large structure, an oasis benefits from rain runoff and shade, which reduces evaporation. • Transition—a “buffer” area between oasis and arid zones. • Arid—farthest from structures, low-traffic, receives the most sunlight. Select Your Plants Review a list of plants that would be appropriate for your region. Use the Sunset Western Garden book for zone information. Select a variety of plants that will tolerate drought
• Study the rainfall patterns for your site to determine drainage.
Continued on page 41
Prepare Your Design Layout • Understand which plants will easily satisfy the site with minimal long-term effort.
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2008 ECHO Business & Professional Directory $20.00 Non-Member Price: $25.00
Condominium Bluebook 2010 Edition $18.00 Non-Member Price: $25.00
Condos, Townhomes and Homeowner Associations $29.00 Non-Member Price: $45.00
This directory lists all business and professional members of ECHO as of December 2007. Current addresses, telephone and fax numbers, email addresses, and a short description are included. This directory is an invaluable tool for locating service providers that work with homeowner associations.
This well-known compact guide for operation of common interest develop ments in California now includes a comprehensive index of the book and a chapter containing more than 200 frequently-asked questions about associations, along with succinct answers.
To make it these a sustainable investment, new buyers, owners and board members need to understand “best practices basics” of how this form of housing works and have more realistic expectations of this form of “carefree, maintenance free” living.
Robert’s Rules of Order $7.50 Non-Member Price: $12.50
The Board’s Dilemma $10.00 Non-Member Price: $15.00
A step-by-step guide to the rules for meetings of your association, the current and official manual adopted by most organizations to govern their meetings. This guide will provide many meeting procedures not covered by the association bylaws or other governing documents.
In this essay, attorney Tyler Berding confronts the growing financial problems for community associations. Mr. Berding addresses board members who are struggling to balance their duty to protect both individual owners and the corporation, and gives answers to associations trying to avoid a funding crisis.
Community Association Statute Book—2010 Ed. $15.00 Non-Member Price: $25.00 Contains the 2010 version of the Davis-Stirling Common Interest Development Act, the Civil Code sections that apply to common interest developments and selected provisions from the Civil, Corporations, Govern ment and Vehicle Codes important to associations.
New e Pric Homeowners Associations— How-to Guide for Leadership New Member Price: $15.00 Non-Member Price: $25.00 This well-known guide and reference is written for officers and directors of homeowner associations who want to learn how to manage and operate the affairs of their associations effectively.
California Building Guidelines for Residential Construction $52.50 Non-Member Price: $60.00 This easy-to-read manual is an excellent tool to understand a new home. It contains chapters covering more than 300 conditions that have been sources of disputes between homeowners and builders, offers homeowner maintenance tips, and defines the standards to which a residence should be built.
Be an HOA Survivor
Questions & Answers About Community Associations $18.00 Non-Member Price: $25.00 For 12 years, Jan Hickenbottom answered homeowners’ questions in her Los Angeles Times column on community associations. Now collected in one volume, readers can find answers to almost any question about CIDs.
Reserve Fund Essentials $18.00 Non-Member Price: $25.00 This book is an easy to read, musthave guide for anyone who wants a clear, thorough explanation of reserve studies and their indispensable role in effective HOA planning. The author gives tips to help board members mold their reserve study into a useful financial tool.
2010 ECHO Annual Seminar Program
The Condo Owner’s Answer Book $15.00 Non-Member Price: $20.00 An excellent guide to understanding the rights and responsibilities of condo ownership and operation of homeowner associations. The question-and-answer format responds to more than 125 commonly-asked questions in an easy to understand style. A great resource for newcomers and veteran owners.
This Program Book is suppor ted through a generous sponsorship from Management Solutions.
2010 ECHO Annual Seminar Program Book $35.00 Non-Member Price: $45.00 This 300+ page reference book contains the presentation outlines, text and handouts from the sessions at the 2010 ECHO Annual Seminar held on June 19, 2010. It also contains vital information for association directors, such as assessment collection policies, internal dispute policies, and much more.
Dispute Resolution in Homeowner Associations $20.00 Non-Member Price: $25.00 This publication has been completely revised to reflect new requirements resulting from passage of SB 137.
Publications to answer your questions about common interest developments Now Order Online at echo-ca.org
Bookstore Order Form Board Memberâ€™s Guide for Contractor Interviews $20.00 Non-Member Price: $25.00
Executive Council of Homeowners 1602 The Alameda, Suite 101, San Jose, CA 95126 Phone: 408-297-3246 Fax: 408-297-3517 TITLE
This report is a guide for directors and managers to use for interviews with prospective service contractors. Questions to find out capabilities and willingness of contractors to provide the services being sought are included for most of the contractor skills that associations use.
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Yes! Place my order for the items above. Board Memberâ€™s Guide for Management Interviews $20.00 Non-Member Price: $25.00 This guide for use by boards for conducting complete and effective interviews with prospective managers takes the guesswork out of the interview process. Over 80 questions covering every management duty and includes answer sheets matched to the questions.
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ECHO Events Calendar
Dates for your calendar Thursday, November 4 North Bay Resource Panel 11:45 a.m. Contempo Marin Clubhouse 400 Yosemite Rd., San Rafael Monday, November 8 Accountants Resource Panel 6:00 p.m. Francesco’s Restaurant Oakland
Wednesday, December 1 Maintenance Resource Panel 12:00 noon Location TBD Wednesday, December 8 South Bay Resource Panel 12:00 Noon Il Fornaio 302 S. Market St., San Jose
Monday, January 10 Accountants Resource Panel 6:00 p.m. Francesco’s Restaurant Oakland Tuesday, January 11 Central Coast Resource Panel 12:00 Noon Pasatiempo Inn, Santa Cruz
Friday, November 12 East Bay Resource Panel 9:30 a.m. Angius & Terry 1990 N. California Blvd., Suite 950, Walnut Creek
Friday, December 10 East Bay Resource Panel 9:30 a.m. Angius & Terry 1990 N. California Blvd., Suite 950, Walnut Creek
Friday, January 14 East Bay Resource Panel 9:30 a.m. Angius & Terry 1990 N. California Blvd., Suite 950, Walnut Creek
Wednesday, December 15 Wine Country Resource Panel 11:45 a.m. Eugene Burger Mgmt. Co. 6600 Hunter Dr., Rohnert Park
Wednesday, January 19 Wine Country Resource Panel 11:45 a.m. Eugene Burger Mgmt. Co. 6600 Hunter Dr., Rohnert Park
Wednesday, November 17 Wine Country Resource Panel 11:45 a.m. Eugene Burger Mgmt. Co. 6600 Hunter Dr., Rohnert Park
Thursday, January 6, 2011 North Bay Resource Panel 11:45 a.m. Contempo Marin Clubhouse 400 Yosemite Rd., San Rafael
Saturday, February 5 Marin County Seminar 8:00 a.m. to 1:00 p.m. Embassy Suites, 101 McInnis Dr., San Rafael
Tuesday, November 9 Central Coast Resource Panel 12:00 Noon Pasatiempo Inn, Santa Cruz
Saturday, March 5 Central Coast Winter Seminar 8:00 a.m. to 1:00 p.m. Hilton Santa Cruz, 6001 La Madrona Dr., Santa Cruz Friday and Saturday June 17 & 18 ECHO Annual Seminar Santa Clara Convention Center Santa Clara
Regularly Scheduled ECHO Resource Panel Meetings Resource Panel Maintenance North Bay East Bay Accountants Central Coast South Bay Wine Country Legal
November 2010 | ECHO Journal
Meeting First Wednesday, Even Months First Thursday, Odd Months Second Friday, Monthly Second Monday, Odd Months Second Tuesday, Odd Months Second Wednesday, Even Months Third Wednesday, Monthly Quarterly
Location ECHO Office, San Jose Contempo Marin Clubhouse, San Rafael Angius & Terry, Walnut Creek Francesco’s Restaurant, Oakland Pasatiempo Inn, Santa Cruz Il Fornaio, San Jose Eugene Burger Management Co., Rohnert Park Varies
New election rules: $500 In today’s economic crisis, there may be some items that associations can cut to reduce costs. ECHO membership is not one. Let’s face it, educated board members are better fiduciaries, which helps them to avoid costly law suits and possibly personal liability. ECHO is the premier resource in California for board member education. ECHO offers new articles each month with practical and easy to understand advice about current California requirements, and what may be on the horizon. ECHO staff is available by phone or E-mail to answer members’ questions about association problems or to recommend competent professional services when necessary. And with discounted member rates at more than a dozen educational events throughout the year, ECHO is simply the best educational resource for California homeowners.
Avoid Litigation Each year, as a member benefit, ECHO sends every board member a copy of the updated Community Association Statute book. Every issue of the ECHO Journal and every seminar examine one or more aspects of compliance with association law, because one of the major causes of expensive litigation is ignorance of the law.
Mailing ballots: $200 Make Better Financial Choices Many associations struggle to understand reserve funding requirements and strategies, the benefits and disadvantages of using special assessments, proper collections practices, and even how to determine what components the association is required to maintain. At a time when wise financial planning is essential, ECHO members have access to a wealth of articles about reserve funding, budgeting, insurance, collections, and much more. Fight Costly Regulation Every year, Sacramento legislators introduce more legislation that confuses the job of California board members and increases the costs of compliance. ECHO is committed to fighting unnecessary regulation in California and promoting the interests and welfare of common interest developments. Hire Competent Professionals ECHO offers a variety of articles and publications to help members evaluate their service providers, including questions to ask prospective management firms and contractors. All ECHO Journal articles are available to members at no cost, and publications are sold to members at a discount.
Avoiding a lawsuit: Priceless. Spend a Little, Get a Lot The cost of ECHO membership is minimal. In a worsening economy, associations are looking to cut big expenses from their budgets. Yet, ECHO membership is as little as 25¢ per unit each month. For that small cost, here’s what every board member receives as part of being a member of ECHO: • A subscription to the ECHO Journal • An annual copy of the current Community Association Statute book • Unlimited access to ECHO’s library of past articles • Telephone consultations with ECHO staff about their problems • Reduced fees for ECHO events • Discounted prices on publications • And much more… In These Tough Economic Times, ECHO Membership is a Necessity As the only California organization devoted exclusively to board member and homeowner education, ECHO is a one-of-a-kind resource that your association can’t afford to lose.
ECHO Honor Roll
ECHO Honors Volunteers Diane Kay 2010 Volunteer of the Year ECHO Resource Panels Accountant Panel Richard Schnieder, CPA 707-576-7070 Central Coast Panel John Allanson 831-685-0101 East Bay Panel Scott Burke, 650-543-5619 Beth Grimm, 925-746-7177 Legal Panel Mark Wleklinski, Esq. 925-280-1191 Maintenance Panel Brian Seifert, 831-708-2916 North Bay Panel Diane Kay, CCAM, 415-846-7579 Stephany Charles, CCAM 415-458-3537 San Francisco Panel Jeff Saarman, 415-749-2700 South Bay Panel Geri Kennedy, CCAM 650-348-2691 ext. 1006 Kimberly Payne, 408-200-8470 Wine Country Panel Maria Birch, CCAM, 707-584-5123
Legislative Committee Paul Atkins Jeffrey Barnett, Esq. Sandra Bonato, Esq. Jerry Bowles Joelyn Carr-Fingerle, CPA John Garvic, Esq., Chair Geri Kennedy, CCAM Wanden Treanor, Esq.
November 2010 | ECHO Journal
SF Luncheon Speakers John Allanson Jeffrey Barnett, Esq. Tyler Berding, Esq. Ronald Block, PhD. Wendy Buller Doug Christison, PCAM, CCAM Karen Conlon, CCAM Rolf Crocker, CCAM Ross Feinberg, Esq. David Feingold, Esq. Tom Fier, Esq. Kevin Frederick, Esq. John Garvic, Esq. Beverly Gordon, CCAM Sandra Gottlieb, Esq. Beth Grimm, Esq. Brian Hebert, Esq. Roy Helsing Stephen Johnson, CFP Julia Lave Johnston Garth Leone Nico March Kerry Mazzoni Thomas Miller, Esq. Larry Pothast Larry Russell, Esq. Steve Saarman Jim Shepherd Nathaniel Sterling, Esq. Debra Warren, PCAM, CCAM Steven Weil, Esq. Mark Wleklinski, Esq. Glenn Youngling, Esq.
Seminar Speakers April 17, 2010 South Bay Spring Seminar Tyler Berding, Esq. Sandra Bonato, Esq. John Garvic, Esq. Robert P. Hall, Esq. Geri Kennedy, CCAM Jan A. Kopczynski, Esq.
Kurtis Shenefiel, PCAM, CCAM Richard Tippett September 25, 2010 Central Coast Fall Seminar John Allanson Beverlee Gordon Stephanie Hayes, Esq. Teresa Powell Brian Seifert Steve Weil, Esq October 23, 2010 Peninsula Fall Seminar Jeffrey A. Barnett, Esq. Tom Fier, Esq. Linnea Juarez, PCAM, CCAM Paul Windust, Esq.
Recent ECHO Journal Contributing Authors August 2010 Tyler P. Berding, Esq. Paul Collins PCAM, CCAM Brenda L. LeClair, CMCA Andrea L. O’Toole, Esq. Debra A. Warren, PCAM, CCAM Steven S. Weil, Esq. September 2010 Tyler P. Berding, Esq. Karen D. Conlon, CCAM Sandra L. Gottlieb, Esq. Beth A. Grimm, Esq. Debra J. Oppenheimer, Esq. Steven Saarman October 2010 Julie Adamen Tyler P. Berding, Esq. Jan A. Kopczynski, Esq. David H. Levy, CPA Gabriel P. Rothman, Esq. John E. Shaffer, Esq.
ECHO What is ECHO? ECHO (Executive Council of Homeowners) is a California non-profit corporation dedicated to assisting community associations. ECHO is an owners’ organization. Founded in San Jose in 1972 with a nucleus of five owner associations, ECHO membership is now 1,525 association members representing over 150,000 homes and 325 business and professional members.
Who Should Join ECHO? If your association manages condominiums or a planned development, it can become a member of ECHO and receive all of the benefits designated for homeowner associations. If your company wants to reach decision makers at over 1,450 homeowner associations, you can become an associate member and join 350 other firms serving this important membership.
Benefits of ECHO Membership • Subscription to monthly magazine for every board member • Yearly copy of the Association Statute Book for every board member • Frequent educational seminars • Special prices for CID publications • Legislative advocacy in Sacramento
ECHO Membership Dues HOA Size 2 to 25 units 26 to 50 units 51 to 100 units 101 to 150 units 151 to 200 units 201 or more units Business/Professional
Rate $120 $165 $240 $315 $390 $495 $425
ECHO Journal Subscription Rates Members Non-members/Homeowners Businesses & Professionals
$50 $75 $125
How Do You Join ECHO? Over 1,800 members benefit each year from their membership in ECHO. Find out what they’ve known for years by joining ECHO today. To apply for membership, call ECHO at 408-2973246 or visit the ECHO web site (echo-ca.org) to obtain an application form and for more information.
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Xeriscaping Continued from page 35
conditions. The site should be planted in layers starting at the structure or large tree. Add bright, colorful plant materials that are wellsuited to local conditions. Moving away from the structure, the plants become subtler and also more drought-tolerant. Fill Large Arid Areas With a Lawn Substitute The green lawn represents heavy water usage and maintenance. Replace that lawn with native prairie, ground cover, and ornamental grasses that grow in clumps, surrounded by mulch. The area that is normally lawn is usually classified as arid; thus if you replace the area with low-maintenance plant species, this will definitely make a difference. Put Water-Needy Plants Near Structures Put these in containers so the roots will get more water. Another idea to consider is the use of self-watering pots. An alternative to containers is creating a retaining wall that makes the oasis plants stand out more. Arrange plants based on the amount of sunshine available, because some sides of the structure will get a lot more sunlight than others. Use the plants that can take more sun
and heat in the sun-friendly area of the afternoon sun. Install a water-thrifty irrigation system with drips to water plants. Water evaporation is minimized, and the slowness of drip irrigation produces less run-off. Transition Areas Fill these areas between arid and oasis zones with plants that fall in the middle in terms of water, sunlight, and aesthetics. Create an effect of tall and bright plants to shorter, eye-catching shrubs, bushes or ornamental grasses.
Ace Property Management . . . . . . . .15 Affirmative Management . . . . . . . . .26 American Management Services . . . .8 Angius & Terry . . . . . . . . . . . . . . . . .3 A.S.A.P. Collection Services . . . . . . .19 Association Reserves . . . . . . . . . . .18 Berding | Weil . . . . . . . . . . . . . . . . .44 Collins Management . . . . . . . . . . . .15 Common Interest Mgmnt Services 9, 35 Community Management Services . .10 Compass Management . . . . . . . . . .11 Cool Pool Service . . . . . . . . . . . . . .16 Cornerstone Community Mgmnt . . . .16 Draeger . . . . . . . . . . . . . . . . . . . . .11 Ekim Painting . . . . . . . . . . . . . . . . .33 First Bank Association Bank Srvcs . .18 Flores Painting . . . . . . . . . . . . . . . .32 Focus Business Bank . . . . . . . . . . . .8 Gachina Landscaping . . . . . . . . . . .27 Hill & Company . . . . . . . . . . . . . . . .33 M & C Association Services . . . . . . .32 M. L. Nielsen Construction . . . . . . .26 Massingham and Associates . . . . . .23 Mutual of Omaha Bank . . . . . . . . . .14 Pelican Management Group . . . . . . .16 PML Management Corp. . . . . . . . . .14 Pollard Unlimited . . . . . . . . . . . . . .22 Professional Gutter Service . . . . . . .18 R. E. Broocker Co. . . . . . . . . . . . . .15 Rebello’s Towing Service . . . . . . . . .42 REMI Company . . . . . . . . . . . . . . . .17 Saarman Construction . . . . . . . . . .19 Scuba Pool Repair . . . . . . . . . . . . .10 Steve Tingley Painting . . . . . . . . . . . .2 Steve’s Painting Services . . . . . . . .17 Varsity Painting . . . . . . . . . . . . . . . .28
Mulch, Mulch, Mulch Mulch reduces erosion and suppresses weeds. Organic, wood-based mulch retains moisture. Xeriscaping is about plants, making changes in plant selection, and making your landscape water wise. Look into ways you and your community can implement this program to save money and protect the environment.
Patti Jo Lewis is the Vice President for Systems and Logistics at Associa in Tucson, AZ. This article was previously published in Association Times, a publication from Associa. ECHO Journal | November 2010
Major Repair Continued from page 33
repair/reconstruction project takes time. The more detailed the documentation, the more money is required. The board and Construction Manager should discuss and agree on the extent of the documentation and the concomitant cost at the time that the manager is hired.
Once the contractor submits his progress billing with all the correct documentation, payment to him should be prompt. Delaying payment increases project costs, complicates the contractorâ€™s cash flow, reduces the contractorâ€™s good will, causes the price of change orders to go up as the contractor attempts to recoup real or perceived losses and generally makes life on the project difficult. There is no reason with proper financial planning, that he cannot be paid within fifteen days.
Payment The payment schedule should be agreed upon between the board and the general contractor prior to the start of work. On major projects payment should be made at least monthly. Retainage of 10 percent should be held on all payments until the end of the project as protection for the association against poor workmanship or bills not paid by the contractor. All requests for payment should be accompanied by conditional lien releases from subcontractors and suppliers for payments now due them, and unconditional releases for payments already received. 42
November 2010 | ECHO Journal
Project Closeout There are several parts to this. Essentially, all are directed at ensuring that the project is fully complete, that the work is now under warranty and that the association has a record of what was done. 1. All punch list work must be completed and accepted 2. All change orders and back charges must be documented, agreed to and the Contract Sum modified to include them. 3. Any maintenance or operating manuals that were specified or required turned over to the association.
4. A complete set of plans, specifications, shop drawings and submittals turned over to the association. 5. Final unconditional lien releases from subcontractors and suppliers received by the Construction Manager prior to release of the final retainage to the general contractor. 6. Arrangement made to receive all specified warranties as soon as final payment is given to the contractor. 7. A final meeting of the board, the construction manager and the general contractor to discuss and complete any last remaining item or issues. From sheer necessity and lack of space this article only touches on each of the topics included, but each one is worthy of a separate article.
Richard Tippett is the principal of ERTECH, Inc. He is a member of the ECHO board of directors, the Central Coast Resource Panel and the Maintenance Resource Panel. He is a frequent contributor to the ECHO Journal and speaks regularly at ECHO seminars.
PRESENTING Upcoming ECHO Seminars February 5
June 17 & 18
Marin County Seminar
Embassy Suites 101 McInnis Dr., San Rafael, CA
8:00 a.m. to 1:00 p.m.
Central Coast Winter Seminar
Hilton Santa Cruz, Scotts Valley 6001 La Madrona Dr., Santa Cruz, CA
8:00 a.m. to 1:00 p.m.
North Counties Seminar
Sally Tomatoes 1100 Valley House Dr., Rohnert Park, CA
8:00 a.m. to 1:00 p.m.
South Bay Seminar
Campbell Community Center 1 W Campbell Ave., Campbell, CA
8:00 a.m. to 1:00 p.m.
ECHO Annual Seminar
Santa Clara Convention Center Santa Clara, CA
Central Coast Fall Seminar
Hilton Santa Cruz, Scotts Valley 6001 La Madrona Dr., Santa Cruz, CA
8:00 a.m. to 1:00 p.m.