With winter fast approaching, many homeowners’ associations will be facing physical issues with their properties that will require action in one way or another. In the fall, issues can often result from seasonal rains causing roof leaks, siding leaks, or various other water leaks. In addition, as the weather turns colder, many associations will be faced with the problems stemming from ice dams or other large ice formations and water leaks as a result of those ice dams. Freeze/thaw cycles can also lead to issue with asphalt and/or concrete including heaving, settling and cracking. As these issues arise, it is important for associations, Board members, and managers to be aware of the potential issues that arise as a result of those conditions. There are a number of points that should be considered when facing these types of issues.
1. Responsibility for Repairs
One of the most common and sometimes problematic issues that is encountered by associations involves who is responsible when repairs are necessary; the individual unit owners or the association. In the classic example, a unit owner reports a water leak into the interior of a unit during a freeze/thaw cycle. Upon investigation it may become clear that the culprit is an ice dam that has formed on the roof above that unit or units. While the initial steps may be taken to remove the ice dam and limit the problem, the fact that water has entered into the interior of the unit also may require some sort of repairs within the unit itself. Often times, a question arises as to who is responsible for the repairs that are necessary to the interior of the unit as a result of such a roof leak.
First and foremost, the interested parties will want to consult the governing documents which will be the main source of allocating responsibility for such issues. Typically, governing documents will define common elements as well as the unit boundaries and therefore assign responsibility for issues arising from or within each of them. For example, if a roof is a common element maintained by the association, as is often the case, to the extent that the water intrusion into the individual unit is a result of ice dam on top of the roof (the common element) that would typically be the responsibility of the association to maintain and repair even within a unit. However, a close reading of the association’s governing documents is necessary to determine the appropriate responsible party for any such repairs so they can be allocated accordingly.
In addition, if there has been any past history/precedent of how such repairs were allocated, consideration must be given to those points. Furthermore, to the extent there is still a concern about the appropriate responsible party, consultation with the Minnesota Common Interest Ownership Act (“MCIOA”), and also counsel, may be necessary.
2. Selecting a Contractor
Depending on the nature and scope of the problem which the association is facing for seasonal issues, the association will want to do its due diligence in selecting the appropriate party for completing the work that is needed. Obviously, in the instance of a need for emergency repairs, there may be a limited amount of time to do the proper investigation and due diligence into a contractor that may be necessary. In those situations, it may be preferable to utilize the services of a company that may have been utilized in the past and is familiar to the association.
In situations where there is a need for larger-scale repairs and adequate time to conduct proper due diligence, in selecting a contractor, the association should keep in mind a number of points related to that process:
- Obtain two or more bids. In order to ensure that a fair cost is being applied to the work that is needed, it is always wise to obtain a number of bids to evaluate the cost for completing that work. Doing so will provide a range of costs for completing the work presuming that the scope of repairs is the same in each of those bids. That can be a way to make sure that there is competitive pricing for the work.
- Check contractor’s license status and past enforcement actions. Depending on the type of work that is going to be completed, it is likely that the contractor doing that work will be required to have a contractor’s license issued by the State of Minnesota. As part of the due diligence process, the association should ensure that the contractor has a valid license and contact the Department of Labor & Industry as to whether there has been any past enforcement actions against that contractor.
- Check insurance coverage. One of the initial questions that should be asked of any contractor completing work on an association’s property should be to provide a Certificate of Insurance Coverage for that work BEFORE the work begins. Verifying that such coverage is in place (and will remain in place throughout the project) can ensure that in the event there is a problem with the work that is completed, the association knows that the contractor has insurance coverage that may be available if a future claim is necessary.
3. Timing of Repairs
Not surprisingly, when leaks occur, both the association and individual unit owners want immediate action to be taken to limit the damage which may be used. Thus, it is often necessary to take immediate steps to determine and address the source of a potential leak. If such a leak relates to an ice dam, it is often necessary to take steps to remove an ice dam. In doing so, it is important to remember that any steps that are taken (repairs) should be fully documented by photographs, written descriptions, and invoices or other documentation showing the steps that were taken to address the problems as well as the cost of doing so.
Documenting “emergency” repairs is helpful in the event there is a future need for such documentation. In some circumstances, such issues may be a sign of a larger construction related problem and may require further evaluation. When faced with these types of issues, immediate consideration must be given to determining the scope of the problem and the potential need to take more thorough steps to investigate the nature of the problem and the potential cause. To the extent there is construction and/or design issues that may be leading to such problems, the association may have the right and/or obligation to pursue claims against those responsible for creating those conditions (builders, contractors, developers).
However, there are very strict timelines that apply to those types of claims and consideration must be given to evaluating those potential issues immediately as they arise or there is a risk of not be able to pursue an otherwise valid legal claim for construction related problems. Again, if there is a concern regarding these issues it would be in the best interest of the association to consult with legal counsel to determine whether there are any rights and obligations it has in regards to them