6 Tips on Maintenance of Exclusive Use Common Areas for HOAs
On January 1, 2017 California Civil Code §4775 will change in part to read as follows:
Unless otherwise provided in the declaration of a common interest development, the owner of each separate interest is responsible for maintaining the exclusive use common area appurtenant to that separate interest and the association is responsible for repairing and replacing the exclusive use common area.
Homeowners Associations (HOAs) and homeowners in common interest developments are justifiably concerned about this modification. In fact, it will be critical for HOAs to define what is or is not exclusive use common area and what maintenance the homeowner will be expected to perform. Here are the issues I think HOAs need to be considering as they plan for this change in the code.
1) Changes to Governing Documents
Many HOAs are considering making changes to their governing documents to make the homeowner responsible for repair and replacement as well as maintenance of exclusive use common area elements. This may be appropriate in some cases, such as concrete patios in back yards or for single family homes where the only common area is landscaped. However in other association types, the HOA will need to establish specifications and criteria for determining minimum standards that should be used if and when these elements are replaced. What happens when a homeowner replaces the deck surface on their exclusive use balcony, does it improperly, and water intrusion damages the unit below? Even if the balcony is exclusive use common area, is the building structure? (Hint – probably not). So now the HOA bears the cost for the improper maintenance of the exclusive use common area.
2) Define Maintenance
HOAs will need to develop maintenance guidelines and specification to identify what maintenance is required and how frequently it must take place. HOAs will need to have some empirical, objective evidence to show that a homeowner either met or failed to meet their maintenance requirements for an element. Otherwise the HOA is exposing itself to litigation or increased costs when the maintenance is not performed or the system fails and damages other units or the common area.
3) Be Realistic
At a recent Community Association Institute (CAI), San Diego chapter lunch meeting the education session was on this topic. Both Susan McClintic from Epsten, Grinnel, and Howell and Andy Henley from ProTec Building Solutions expressed concern about HOAs just letting homeowners decide what maintenance to do, how to do it, and what products to use. HOAs will need to be realistic about what work they want homeowners to be responsible for. Frequently we see work done by homeowners or unlicensed handymen that is incorrect, dangerous, or that creates major issues for the HOA to deal with. HOAs cannot just use this code change to pass along responsibility to homeowners, they will need to be realistic about deciding what homeowners can and cannot be expected to maintain properly.
4) Use Professionals, part 1
The business judgment rule establishes the standard that volunteer boards are held to in carrying out their duties. This is one of those situations where the board should involve outside experts (architects, construction managers, contractors, attorneys) to advise them on the best way to approach these decisions. The board of a HOA has as its most basic duty the preservation of the common areas. Making shortsighted decisions about maintaining exclusive use common area elements, especially when those elements can impact the common area, is simply too big a deal to address without professional guidance.
5) Use Professionals, part 2
As with any regulation, merely making something the homeowners’ responsibility will not ensure it is being done. As with any rule that an HOA adopts, there has to be some type of enforcement mechanism. A rule without enforcement is a suggestion, and people ignore suggestions. HOAs should consider establishing procedures by which they can ensure that maintenance is being performed and has been done properly. This may require the HOA to adopt a process similar to their architectural change request process whereby homeowners inform the HOA they are doing or have done required maintenance and the HOA verifies that the work meets their standards. Depending on the type and location of the maintenance work being performed, this may be beyond the ability of the Board and even the management company to inspect. The HOA may need to bring in an outside consultant who can ensure that work is being done and has been done correctly.
6) Small HOAs are not exempt
Once again, this is an example of the Davis Sterling Act being one size fits all. Many small associations are simply not as able to address these challenges as larger associations. It will be critical for these HOAs to get on top of this change and the impacts to their association.
If done properly, this change in civil code has the potential to be mutually beneficial to both HOAs and their homeowner membership. It will be up to the HOA to make sure that this transition happens smoothly.
Matthew C. Boomhower is the founder and president of Southern Cross Property Consultants; a construction management, architecture, and facilities management consulting firm. He is licensed as both an Architect and an Attorney. He can be contacted at matthew@southerncrosspc.com or 858-395-8657.