Aging in Place: A New Plan for the Suburbs?

Should We Re-Develop Condos to Become More Senior Friendly?

Can we save older common interest developments? Does their eventual obsolescence give us an opportunity to turn them into something else? Perhaps a new form of housing that will be absolutely necessary in the years to come? These questions and many like them have been asked on these pages for years. We have predicted the end of common interest developments as we know them.[1] We have outlined the reasons why this form of housing most likely has a finite life.[2] New Towns and other urban-style developments as successors to existing, low density, car-dependant projects on the outskirts of cities[3] Discussions about the end of the move to suburbia. [4]But now comes another idea, something so fresh, yet so immediately understandable, that it makes you wonder why it hasn’t surfaced before.

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[1] Berding, “The Uncertain Future of Common Interest Developments” 1999, 2005
[2] Berding, “ When Condominiums become Obsolete” 2008
[3] Berding, “New Towns” 2008
[4] Berding, “Back to Our Housing Future” 2008

Why Won't They Serve?

Homeowners won’t volunteer for boards of directors of community associations—another nail in the coffin?

Community associations are corporations. Their bylaws require management of the association by an elected board of directors. That board serves all of the owners by conducting the business of the association. Like any corporation, the board of directors, and its officers, have the sole legal authority to handle all of the vital functions of the enterprise—from hiring and firing property managers, to contracting for repairs, to determining the adequacy of the association’s revenue stream.

A property manager does not have the authority to conduct the business of the association on its own. No matter how good, how skilled the manager, without the legal power of the corporation behind it, business would stop. Vendors would not continue to provide critical services to the association if there was no one with the authority to write checks. Local government would begin to question whether a condominium project could continue to be habitable if no one was able to pay the water or the electric bill.

Without the board of directors, the association would cease to function. There is no alternative within a corporate framework. Yet many associations have a very difficult time recruiting board members. Board positions go unfilled waiting for volunteers. This has potentially disastrous consequences and justifies further examination. First, we’ll examine some of the reasons why it is so difficult to convince owners to serve on their community association’s board of directors and then discuss the impact of that.

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What You Don't Know...

When do Statutes of Limitation begin to run on Construction Claims?


A Developer lays a Trap for the Unwary.


[Introductory Note: Statutes of Limitation are intended to protect defendants from stale claims. They are also traps for the unwary claimant. If the time period expires before an appropriate claim is made, legal rights can be permanently lost. Here’s a story about an artful attempt by a developer to deprive a new community association of some valuable time that it needs to evaluate the condition of the project before the limitation periods run out.]
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You just moved into a new condominium project. You bought one of the first units sold in the second phase. Sales in that phase are just about done and then the project will be sold out. The project is just a little over two years old, so you are satisfied that any warranty items will get fixed. How hard could it be with the developer still on the board and with a few units left to sell? Everything seems to be going as expected.


But all is not perfect. The iron fences around the project are corroding badly. And the common area landscaping has a lot of dead spots where the irrigation system apparently doesn’t reach. There are places where rain and irrigation water pond for days and mosquitoes are breeding. You’ve also noticed that some of the wood fences in the project appear to be leaning. You went to the board meeting last night. Two owners are on the board along with three developer representatives. You raised those issues with the board, and one of the developer representatives told you that it was not the developer’s problem any longer, that it was the association’s responsibility to fix those particular defects. You argued that the developer is responsible for defects for ten years[1]. You also pointed out that you only noticed these problems a few months ago. So how could it no longer be the developer’s responsibility to fix clearly defective components?

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[1] That is not exactly a true statement. California Code of Civil Procedure Section 337.15 is actually a “statute of repose” which sets the outside limit of the developer’s liability for new construction at ten years from a specific date determined in accordance with the statute. There are many considerably shorter such periods in the law, such as those discussed in this article, which will cut off a developer’s responsibility much sooner, depending upon the type of claim made and as we discuss here, the type of building component that is the subject of the claim. A complete list of components and the time limits for bringing claims can be found on our website.

Are Apartments a Better Answer to the Housing Crisis?

Sometime in the early sixties, a large California developer opened its first development of condominiums for sale. Even by the standards of the day, they were offered at rock bottom prices. A home for a single family that could be bought for $10,000.00 was big news. The need for suburban housing that could be built in high densities and thus be affordable was apparent. It allowed for volume sales, which, of course, meant higher profits for home builders. Other developers followed suit, and the affordable, single-family attached home became a ubiquitous part of the California (and national) real estate market. An industry, as well as a type of housing, was born. Multi-family developments, however, were not new, even in the sixties.

For decades, rental apartments provided affordable housing for millions of people. What was new was the offering of these apartment units for sale. Because that's exactly what condominiums were - apartment units that could be sold to individual owners. In every other respect, they were just like the apartment buildings that everyone was familiar with. The big difference was that the maintenance and repair of these condominiums was now the responsibility of the owners - there was no landlord to foot the bill.

Now, even those homebuyers who could not afford a single family home could get on the real estate ownership bandwagon. Low interest and low down payment loans offered by various government agencies, gave many low and moderate income wage earners the opportunity to purchase a home. Most people could buy with 5% or no money down. Veterans could buy a new home for nothing down. Condominiums, and their planned development cousins, became the darlings of the real estate industry, and they were constructed by the car load.

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Negligent Conversion?

Is the Condominium Converter Liable for Failing to Properly Assemble the Parts of a New Community?

“Negligent conversion” is another way of saying that mistakes were made when joining all of the required pieces of a conversion project together. The converter of an apartment building into condominiums basically has three choices under the existing law in California: (1) Rehabilitate the buildings so that they are in a “like new” condition. (2) Provide cash to the association to offset any deferred repairs, or (3) Set the assessments high enough so that the association will collect enough working capital in time to perform needed repairs. While some combination of these three will work, the converter cannot choose to do “none of the above” as in, do only a few repairs, underfund the budget for what is left to do, and keep assessments artificially low...

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The Board's Dilemma

Every board faces this dilemma sooner or later: how to raise revenue without raising assessments. Since the only revenue the average association can obtain is from owner assessments, that's usually impossible. Owners want the board to maintain and repair the association's property, but they don't want to pay more each month, especially in these difficult economic times. Boards of directors of community associations find themselves torn between two masters--their obligation to care for the project and the political will of the homeowners. This publication was written to help directors find their way through this morass.

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What You See is (Not Necessarily) What You Get!

“Visual and Accessible” is not enough: Let’s amend the Davis-Stirling Act to delete Limitations on Reserve Study Inspections

It’s the responsibility of every California community association to commission a reserve study every three years. These studies are used to calculate the amount that each association will need to save for future building maintenance and repairs. It is critical to the financial health of every association that this funding projection be as accurate as possible. The Davis-Stirling Act governs these studies. California Civil Code Section 1365.5(e) states in part:

“At least once every three years, the board of directors shall cause to be conducted a reasonably competent and diligent visual inspection of the accessible areas of the major components that the association is obligated to repair, replace, restore, or maintain as part of a study of the reserve account requirements of the common interest development...”

Note that this requirement is limited to a “visual” inspection of the “accessible areas of the major components.” But the assessment responsibility of the board of directors is not similarly limited. Civil Code Section 1366(a) says that the board of directors shall assess as necessary to meet the requirements of the governing documents and the Civil Code. But what are those requirements exactly? And how does a board know for sure, if only the visible and accessible areas of the project are investigated?

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