A New Board Needs to Evaluate the Condition of the Premises

Article excerpt

Byline: Jordan I. Shifrin

One of the first orders of business for a new Board is to conduct an evaluation of the physical condition of the premises to determine if there are any structural defects which need to be repaired. Even if an association is not responsible for building maintenance, there may be problems with the common areas, including the retention pond.

Most purchase agreements for new construction of a dwelling unit in a community association contain a 12-month written express warranty for materials and workmanship.

In addition there is the common law implied warranty of habitability which also exists to cover latent defects for a specified time period after discovery. In Illinois, the statute of limitations on these types of defects runs to fours years from the date of discovery of the defect and ten years of the actual completion of construction (Ill Rev'd. Stat., Ch. 110, par. 13- 214).

The purpose of this article is not to discuss the legal theories and supporting case law on developer warranties, but rather to provide an easy to follow outline of the step-by-step approach necessary for a new Board to follow when developer-caused defects create warranty problems and generate homeowner complaints.

Determining the scope and extent of the defects

New construction requires a "breaking in" period involving building settlement, seasoning of wolmanized lumber, concrete drying, etc.

The hardest thing for a newly elected board of directors to determine is when is the appropriate time to initiate a comprehensive physical inspection of the premises.

Statute of limitations permitting, it is recommended that an association experience a full cycle of seasons prior to commencing the final inspection process. Think of this as the "letting the building(s) cook" phase so that the inspection is not done prematurely. Serious defects apparent to the untrained eye obviously should be handled on an on-going basis and members should be reminded to report defects promptly. Some defects, which are latent in nature, may not show up for several years.

The spring walk through

In the first spring following a cycle of complete seasons, a committee should be designated to walk the grounds and inspect the premises to make note of obvious physical defects. Chipping paint, cracked masonry, dead shrubbery, etc. should be specifically identified by location. Often a builder will request to participate in a walk through to create its own "to do" list.

How to assess damages

Since an association board of directors generally consists of lay people, an association, regardless of size, should then retain the services of a qualified and licensed architectural/engineering firm.

After drawing up specifications, soliciting competitive bids and carefully checking references, the board should select an expert that (1) is experienced in dealing with multi-family residential development and (2) is interested in forging a long-term relationship.

Once retained, the engineer should be given the board's inspection report as well as any homeowner complaints and/or service requests. These will serve as the starting point. The engineer will then need to compile a comprehensive report containing:

- Scope, extent and location of defects

- Building code violations (if any)

- Cause of defects

- Recommended procedures for curing defects

- Itemized costs for any necessary repairs

- Anticipated remaining useful life of all major amenities (roofs, parking lots, siding, etc. …