Landslides: Nuisance or Construction Defect?

Sorting Out Liability and Damages

As I write this, northern California is experiencing the second straight week of rain in an otherwise very wet year.  Continuous rain soaks the ground and loosens unstable hillsides. Landslides can stay hidden for years until very wet weather suddenly breaks them loose. Also, slides can move very slowly, over long periods of time, gradually damaging the properties around them.

            In either case, earth movement can cause serious damage to buildings and other improvements on or adjacent to the unstable land. Mudslides, rockslides, and landslides are all versions of the same phenomenon—water plus gravity equals damage.

            We’ve seen slides gradually pull down the surrounding properties so slowly that trees growing on the hill have curved trunks. This is called soil creep and can last for years or decades. We’ve also represented clients whose homes were damaged in just a moment as a large landslide, hidden beneath the surface of the earth for centuries, comes down, bringing a large portion of the hillside with it.

            Property developers are required to obtain the advice of soil engineers when grading is done in a landslide-prone area, and most engineers are very good at detecting the presence of hidden slides. Aerial photo mapping, boring, or just reviewing the history of the area under development can do this. But regardless of the engineer or developer’s efforts, slides can still occur.

Is the Florida Legislature About to End Condo Dispute Arbitration?

(Editor's note: Florida has state licensing of condominium managers and arbitration of owner and board disputes. New proposed legislation would dismantle this system. This article recently appeared in the Fort Lauderdale Sun Sentinel)

By Daniel Vasquez 

A new Florida bill seeks to deregulate condominium community association managers and dismantle the state's arbitration system for settling owner and board disputes out of court.

What would that mean? Community association managers and companies, which often manage the finances and day-to-day operations of communities, would no longer be required to be licensed by the state or report crime convictions to state officials, critics say. In other words, virtually anyone - regardless of qualifications or criminal background - could become a manager in charge of what could be millions of dollars worth of property and assets.

Why Members Don't Care About Their Community Association

Many community association members are apathetic about association affairs because they don’t see their association as significant to their lives—that nothing the association does or doesn’t do will have a serious effect on them. This attitude often arises from the perception that a sale of their interest will pass any association problems on to someone else.

A community association is not the board of directors. It’s not management. It’s not legal counsel.  A community association is the sum of its members—nothing more, nothing less. The ultimate fate of a community association is always in the hands of the owners. An association is dependent upon its members in numerous ways. Funding is the most obvious example. Without member assessments an association will cease to function—those assessments are usually the sole source of cash flow to pay operational expenses, staff salaries, and to accumulate reserves for future maintenance and repair.

City in a Salt Pond

Future Salt Pond Residents Left Holding the (Sand) Bag

As an attorney who has defended Redwood Shores homeowners and who has represented homeowner associations battling over responsibility for flood protection and the resulting damages when that protection fails, I have watched Cargill’s proposed new city-in-a-salt-pond moving forward in Redwood City’s approval process with growing alarm.

Proponents of this development contend that it will be good for the economy, touting the potential shopping and new restaurants from Burlingame to Palo Alto. But from my experience, future salt pond residents will instead be left with massive, unrecoverable costs. This is particularly true given Cargill’s plan to build a levee that will not only have to be maintained, but raised significantly even to meet their optimistic estimate of sea level rise. All of this at homeowners’ expense after Cargill has taken its profits and left town.

Good Legal Advice or Confidence Game? You Decide.

By Tyler P. Berding and Sandra M. Bonato

     A new community association experiences some leaks. Management tells the board about an attorney who will provide a free seminar on the fiduciary duty of board members in the face of construction problems. The board accepts the offer. So far, so good. The attorney arrives and asks that the “seminar” be held in executive session with just members of the board. The attorney proceeds to tell the board members that they could face personal liability if they fail to thoroughly investigate construction defects throughout the project and bring suit against the developer. The attorney “advises” the board that they should hire him and his consultants. The attorney pulls out a fee agreement for himself and his consultants and urges the anxious board to sign it on the spot.

      The developer offers to fix the problems, but the attorney won’t permit it. The attorney fails to file the necessary statutory notices required by Title 7 of the California Civil Code. The board tries to cancel the agreement for legal services, but is again “advised” by the attorney that they could be held personally liable if they don’t follow his instructions. At a board meeting a motion is made to discharge counsel and the consultants. The attorney tells the board it cannot discharge him or his consultants, again “advising” that they could be personally liable if they were to do that.

What theme does this story present? An over-reaching attorney, who uses the lure of a “free seminar” to get access to the directors of a community association and, once in the door, threatens the board with personal liability if they don’t immediately hire him and his consultants to investigate and pursue a construction defect claim. This scenario is not fiction. It is apparently happening with alarming frequency in the current over-heated market for construction defect legal work. Let’s analyze it.

To read the rest of this story click on the title link above...

Maintenance Manuals for New Associations: How Much Maintenance is enough?

by Tyler P. Berding and Steven S. Weil

(Editors note: This article was originally published earlier this year and prompted the question in the post below)

Many of the statutes in the Davis-Stirling Common Interest Development Act (“Act”) address common area maintenance and the calculation and levying of assessments needed to maintain and reserve for that maintenance. Directors and managers face the challenge of implementing these statutory directives, a task especially difficult during an economic downturn. Decisions have to be made: what must be repaired, what can be deferred; should we replace a component with a “short term” fix or with one that is more costly but will last longer? When the CC&Rs say common areas must be maintained in “First Class condition” is that different than requiring simply that common areas “be maintained”? Answering these and similar questions can affect habitability, enjoyment of the project and property values.

For new developments, the issues are even more complex. Title 7 of Division 2 of the California Civil Code (“Title 7” which, before its enactment, was called “SB 800”) creates new standards and special statutory maintenance requirements for residential common interest developments constructed after 2003.¹ These requirements, which can require compliance with a project “Maintenance Manual,” pose special risks for managers and directors because the failure to comply could reduce the recovery available to associations in construction defect claims or create liability to members or others if the new maintenance standards are breached.

The association's governing documents can add yet another dimension. Typical CC&Rs for new projects often contain specific requirements that the board must follow, including complying with the provisions of the maintenance manual and conducting all necessary inspections specified in such manuals.

Most maintenance manuals are detailed, but the “maintenance” that is required usually consists not of repairs, per se, but rather periodic inspections of various components. The ones that we have reviewed have few actual specifications for work to be performed for which contractor's bids could be obtained. Nevertheless, must the manuals be followed completely and if they are not, what is the consequence? This article is intended to help boards and managers navigate the liability risks created by the new maintenance standards contained in the manuals.

Click the title link above to read the rest of this article...

Are Developers Required to Provide "Maintenance Manuals" to New Associations?

A Question from a Reader regarding California's Title 7:

Mr. Berding

Re your article in Community Associations Network ("Maintenance Manuals for New Associations--How Much Maintenance is Enough?"), I found it quite informative. A question:

"Title 7 of Division 2 of the California Civil Code ("Title 7" which, before its enactment, was called "SB 800") creates new standards and special statutory maintenance requirements for residential common interest developments constructed after 2003. These requirements, ... can require compliance with a project "Maintenance Manual"..." 


Does such a manual exist, and if so, how would I go about getting a copy? 


Thank you.

Robert J. Burns, P.E.,R.S.
Burns Associates-Engineers

 Bob, I'm glad you found the article useful.

The two provisions of Title 7 of California's Civil Code which relate to maintenance schedules are the following:

CC 907: A homeowner is obligated to follow all reasonable maintenance obligations and schedules communicated in writing to the homeowner by the builder and product manufacturers, as well as commonly accepted maintenance practices. A failure by a homeowner to follow these obligations, schedules, and practices may subject the homeowner to the affirmative defenses contained in Section 944.

CC 945.5 c): To the extent it is caused by the homeowner or his or her agent, employee, general contractor, subcontractor, independent contractor, or consultant by virtue of their failure to follow the builder's or manufacturer's recommendations, or commonly accepted homeowner maintenance obligations. In order to rely upon this defense as it relates to a builder's recommended maintenance schedule, the builder shall show that the homeowner had written notice of these schedules and recommendations and that the recommendations and schedules were reasonable at the time they were issued.

The statutes refer to "recommendations" "maintenance schedules" and "schedules" in no particular order. The phrase "maintenance manual" is not used. However, these statutory provisions have obviously been considered by builders when they provide maintenance "manuals" or "schedules" for specific projects. There is no standardized maintenance manual of which we are aware. The manuals we discussed in our article were specific to projects that we have been retained to review.

These "maintenance manuals" and other similar "maintenance schedules" are intended by builders to put an association on notice that they must maintain the project properly to avoid problems. This is, of course, good advice. But it also provides the developer a defense that can be used in a construction defect claim. A good expert, however, can separate problems in the design or original construction from those caused by lack of proper maintenance and whether or not the maintenance required by the "manual" was reasonable.