Effective communication within a homeowners’ association is always important. However, during a construction defect action by an association, communication and cooperation among the Board, Community Association Manager, and the Construction Defect Attorney become essential.
A construction defect action by a homeowners’ association usually begins with a Notice of Commencement of Legal Proceedings under the Calderon Act (Civil Code § 6000 et seq.). However, before the Attorney may prepare such notice, the Attorney must investigate the defects in the community and discuss the identified defects with the Board and the Community Manager. This conversation is the key to defining the scope of the action desired by the association. Sometimes, associations are concerned only about a few key issues. Other times, the association has a plethora of concerns about the construction of their community and wish to pursue all issues completely. The Attorney, Board Members, and Manager should discuss these issues and the scope before the Attorney prepares and serves the requisite notice on the builder.
After the Notice is served, California provides for a 180-day period for the builder to investigate the claimed defects and for the parties to mediate the dispute. During this time period, the builder will generally want to visually inspect and photograph the claimed defects. Seeing unknown people walking through the community and photographing various areas can be alarming for some residents. Thus, the Construction Defect Attorney will develop an inspection schedule for the community and send out a representative from the Attorney’s office to guide and monitor the investigators. The Attorney will share the schedule with the Board and Manager who can provide feedback on the schedule and share the schedule with any concerned residents. Good communications with the Manager, Board, and Members is essential at this point.
After the inspections, the builder’s attorney may provide some feedback on the inspections to the Association’s Attorney and how the builder views the case. The Association’s Attorney will then share this information privately with the Board and Manager to develop the best strategy for addressing the defects at the mediation.
The Calderon mediation generally occurs near the end of the 180-day window, after the parties have completed some inspections and consulted with experts. Although not required, Board Members may attend the mediation as the association’s elected representatives. At the mediation, the Construction Defect Attorney will provide periodic updates to the Board Members as to the status and progress of negotiations as advised by the Mediator. If the mediation is successful, the Attorney will provide an update and recommendation to the Board for settlement and will provide any further information or answers to questions that Board Members may have. If the mediation is not successful, the Attorney will provide a recommendation on how to proceed, including by filing an action in superior court. Again, effective and proactive communications between the Attorney and the Association Client is crucial at this point in the claim.
Throughout this process, the Construction Defect Attorney, Board Members, and Community Manager must remain in regular, consistent communication to best facilitate the association’s construction defect action on behalf of all Members of the community.
The diligent attorney will use a combination of methods to keep the Board and Manager informed and will develop the communications plan at the beginning of the legal relationship. Common methods are weekly or monthly updates sent via email to the Board Members and Manager, regular attendance at Board meetings (both in Executive and Regular sessions as appropriate), and frequent written updates suitable for sharing with all members during key periods in the process.
Ritchie Lipson, Esq. is Senior Counsel and leads the Kasdan LippSmith Weber Turner LLP business development efforts in Southern California. Ritchie is a member of the California Association of Community Managers. Kasdan LippSmith Weber Turner LLP, has recovered more than $850 million for its clients.