Each association will face a major reconstruction project several times during the life of the development. This can occur due to clearly anticipated issues, such as re-roofing or painting, but it will also occur due to completely unexpected (and unreserved) issues such as dry rot repair, soil subsidence, and leaky windows, siding, and foundations. The Davis-Stirling Act only requires a reserve for those components that visual inspections in accessible areas reveal have a useful life of 30 years or less.
But what about components in areas that are not accessible? What about areas under stairs that sponsor dry rot due to long-term water intrusion? Putting components under the cladding that have allowed water to creep in for years with no way to get it out except evaporation? Deterioration of concrete walkways or driveways due to root invasion or soil subsidence due to unconsolidated fill? However, do balcony railings rot on their interior supports? Three people in Antioquia were seriously injured last week when such a railing collapsed. None of these building components would be included in the typical reserve or maintenance budget.
So now you have a collapsed balcony or maybe a bunch of rotten siding and you have no funds to repair it. To do? This scenario has happened to many associations that have encountered unexpected repairs that were not financed by the usual reserve fund.
Find the right expert
The first thing to do is to enlist the services of someone who can advise the association on the proper means of repair. General contractor, architect, engineer or site manager? What expert will you need? Much depends on the complexity and scope of the problem. If, for example, you have a faulty balcony support beam, say something that has rotted due to years of water intrusion, replacing the faulty beam may not be enough. You don’t want it to happen again.
The first thing would be to retain someone who is a professional with waterproofing. Would you choose a construction consultant or an architect? Architects are more expensive, but for a very complex waterproofing problem you need someone who has the skill and understanding to redesign the system to make it airtight.
On the other hand, if the basic design is solid, but the materials haven’t done their job, a materials consultant who specializes in waterproofing membranes may be the right choice. In our practice, we would start with the architect or an engineer because this particular balcony railing example involved a human safety issue and because redesign and / or strength calculations may be necessary.
If your opinion is that the problem is relatively simple to solve, so that a redesign of the waterproofing system or a new calculation of the resistance of the system is not required, and the project simply requires a reconstruction of the original. design, then a construction consultant or general contractor could provide the specifications.
On the other hand, if the basic structure has proven to be inadequate for other reasons, such as deflection over time or faulty beams or columns, a structural engineer may be required to make the proper calculations and provide a redesign of the structural components. . Typically, a few hours of an architect’s time will be sufficient to determine the level of expertise required for the project, so when in doubt, hire an architect first.
Job offer
Once the problem has been analyzed and plans and specifications for the repair have been developed, the bidding process can begin. A list of preferred bidders is usually prepared. This preference usually comes from past experiences or specialties. For both political and economic reasons, several offers must be obtained. Even if the board or management favors a particular contractor, perhaps due to a successful project carried out before, it is advisable to obtain at least three bids to demonstrate due diligence in the bidding process.
When bids are opened, it is up to the board, with management’s recommendations, to choose the right contractor. Price may not be everything. Past performance, specialty, and availability may have an important role to play. All of these factors should be considered before making the final decision.
Drafting the contract
Your attorney can help you review and negotiate the contract. There are many considerations and good contract writing is a topic in itself. But some of the considerations are:
(1) Is this an additional cost contract or a lump sum contract?
(2) Does the owner provide all drawings and specifications (and except responsibility for them) or is there a “design-build” element in the contract?
(3) Are there excessive provisions, a provision buried in fine print, or a disclaimer of all express or implied warranties? Courts will often not enforce such provisions.
(4) What are the payment arrangements? Will there be progressive payments or a lump sum at the end of the job? Will the owner retain (retain) a portion of the payment to ensure that all mechanical links are removed?
(5) What happens if the project is delayed? Should there be penalties for that? What about incentives to incorporate work earlier?
(6) How to deal with the changes?
(7) Who is responsible for misleading drawings or specifications (see 2 above)?
(8) What insurance must the contractor have? (8) What guarantees or compensation must the contractor provide?
(9) What licenses must the contractor have?
(10) Will the owner have the right to stop working and under what circumstances?
We could go on, but you get the idea. There are many questions that need to be asked that can only be answered in the context of the particular job. Your attorney working with your architect or engineer can design a contract that is appropriate for the job.
Project financing
How will the association pay for all of this, especially if it is work that no one expected to have to do? In general, there are only a few options. If the work is contemplated and financed in the reserve fund, then there is no problem. But what about all those unexpected rebuilding projects?
The association can borrow the money, either from a bank or from itself. Or you can go to members to pay for a special evaluation. But if the association is affected by a big and unexpected job, then borrowing may be the only option, unless the members are willing to pass a special evaluation. If the evaluation does not exceed 5% of the existing budget or only requires a 20% increase in the monthly evaluation, the board can simply impose it; otherwise, you will have to submit to a vote of the members, something that is not usually easy to win. But great work can quickly exceed legal maximums, and if member votes don’t support a special assessment, turning to a bank may be the only option. The association’s attorney can assist with the necessary review of the proposed appraisals or bank loan documents.
If all goes well and the job is completed on time and on budget, great! But if the contractor defaults, either because he doesn’t complete the work or is moving so slowly that it won’t be completed on time, or because the work has been rejected by inspectors, it may be time to consider terminating the contract. But before that happens, check with the association’s attorney to make sure the provisions of the contract are followed so that the association is not in default.
A large and unexpected construction job is probably one of the most disturbing events in the life of an association. Some associations never recover. This can be avoided with early inspections of all building components, visible or not, so that failure can be anticipated in plenty of time to properly reserve costs. Like cancer, early detection offers the best chance for a cure.
