NAVIGATING THE MAINTENANCE REPONSIBILITY MATRIX

Tips on Deciphering Maintenance Responsibility and Liability

Presented by

Jeremy R. Moss, EsquireMercerTrigiani

Deborah A. Carter, CMCA, AMS, General Manager

Westridge Swim and Racquet Club, Inc.

PRINCE WILLIAM COUNTY NEIGHBORHOOD SERVICES

2013 Homeowner & Condominium Leadership

Seminar

October 25, 2013

Typical Maintenance Scenarios

• Windows and doors serving units are old and need to be replaced.

• Unit HVAC systems are failing and need to be repaired.

• Dryer vents need to be cleaned.

• Front yards of Lots need to be mowed.

• Trees show signs of decay.

The Question(s)

• Who is responsible for performing maintenance?

• Who bears the costs performing maintenance?

#69475

RESPONSIBILITY DETERMINATION MATRIX

Yes

What do the documents provide?

Consider provisions of the Declaration, Bylaws, Maintenance Responsibilities Chart

No

Is the component part of the Unit or part of the Common

Elements?

Repair is the responsibility of

the unit owner

Is the General Rule modified by the condominium instruments?

Unit Owner Association

Responsibility to Pay for Work

General Rule. Section 55-79.79 A of the Act provides, in part: All powers and responsibilities, including financial responsibility, with regard to maintenance, repair, renovation, restoration and replacement of the condominium shall belong (i) to the unit owners association in the case of the common elements, and (ii) to the individual unit owner in the case of any unit or any part thereof.

Responsibility to Perform Work

Repair is the responsibility of the Association

Common Element

Unit

Association Unit Owner

What Must Be Considered

• Governing Documents (HOA)• Declaration

• Virginia Condominium Act (“Act”)• Condominium Instruments

• Declaration• Bylaws• Maintenance Responsibilities Chart• Plats and Plans

Condominiums

General Rule (Condominium)

Section 55-79.79 A of the Act provides that except as otherwise provided in the condominium instruments, all powers and responsibilities (including financial responsibility) for maintenance, repair, renovation, restoration, and replacement in the Condominium belongs to:• the association for common elements; and• the unit owner for unit or any part thereof.

General Rule (Exception)

• Unit owner responsible for maintenance, repair, renovation, restoration, and replacement in Unit except to the extent that the need for such work arises from a condition originating in or through the common elements or any apparatus located within the common elements, in which case, the association is responsible.

Determine Unit Boundaries

• Condominium Instruments• Declaration, or• Plats and Plans (older

Condominiums)

• Section 55-79.50 of the Act (if condominium instruments are silent).

• Plat

Determine Unit Boundaries (Condominium)

• Section 55-79.50 of the Act (if condominium instruments are silent):• If walls, floors and/or ceilings are designated

as unit boundaries, all lath, wallboard, plasterboard, plaster, paneling, tiles, wallpaper, paint, finished flooring and any other materials constituting any part of the finished surfaces thereof, are part of the unit part of such units; all other portions of such walls, floors and/or ceilings shall be deemed a part of the common elements.

Determine Unit Boundaries (Condominium)

• Section 55-79.50 of the Act (if condominium instruments are silent):• If any chutes, flues, ducts, conduits, wires,

bearing walls, bearing columns or any other apparatus lies partially within and partially outside of the designated boundaries of a unit, any portions thereof serving only that unit shall be deemed a part of that unit, while any portions thereof serving more than one unit or any portion of the common elements shall be deemed a part of the common elements.

Determine Unit Boundaries (Condominium)

• Section 55-79.50 of the Act (if condominium instruments are silent).• All space, interior partitions and other fixtures

and improvements within the boundaries of a unit shall be deemed a part of that unit.

• Any shutters, awnings, doors, windows, window boxes, doorsteps, porches, balconies, patios and any other apparatus designed to serve a single unit, but located outside the boundaries thereof, are considered a limited common element (exception – master electrical switch).

Modification of General RuleThe governing documents may modify the general rule(s):

• Bylaws (Condominium) – Maintenance, repair, and replacement section.

• Maintenance Chart – Sometimes an exhibit to the Bylaws.

Sample Bylaw Provision (Condominium)

Section 5.5. Maintenance, Repair, Replacement and Other Common Expenses.

(a) Chart of Maintenance Responsibilities. Notwithstanding the general provisions for maintenance set forth in subsections (b) and (c), specific maintenance responsibilities and the costs attributable thereto shall, to the extent set forth thereon, be determined pursuant to the Chart of Maintenance Responsibilities attached as Exhibit B to these Bylaws.

(b) By the Unit Owners Association. The Unit Owners Association shall be responsible for the maintenance, repair and replacement of all of the common elements (including the limited common elements) as defined in the condominium instruments, whether located inside or outside of the units, the cost of which shall be charged to all unit owners as a common expense; provided, however, that the Board of Directors may elect not to do so if in the opinion of a majority of the Board of Directors such maintenance, repair or replacement was necessitated by the act, neglect or carelessness for which a unit owner is responsible pursuant to Subsection 9. 1(a); and provided, further, that each unit owner shall perform normal maintenance on the limited common elements appurtenant to such unit owner's unit and any portion of the remaining common elements which the Board of Directors pursuant to the rules and regulations has given such unit owner permission to utilize, including without limitation the items enumerated in subsection (c).

(c) By the Unit Owner.

(1) Each unit owner shall keep the unit and its equipment, appliances and appurtenances in good order, condition and repair and in a clean and sanitary condition. Each unit owner shall perform this·responsibility in such manner as shall not unreasonably disturb or interfere with the other unit owners. Each unit owner shall promptly report to the Board of Directors or the managing agent any defect or need for repairs for which the Association is responsible.

Who is responsible for the cost of maintenance, repair and replacement

in the event of a casualty event?

Who Pays v. Who Repairs?

The party responsible for performing repair or replacement of a component

after a casualty is not necessarily responsible for associated costs, or the party that is typically responsible for

maintenance.

Who Pays?

Consider:

• Circumstances (what caused damaged?);

• Insurance coverage;

• Liability and other provisions contained in the condominium instruments;

• The Virginia Condominium Act; and

• Virginia common law

to determine financial liability.

Who Pays v. Who Repairs?

For example:…the association is responsible for repairing windows, but can assess costs to repair damaged windows against the unit owner because the unit owner caused the damage;

or the more complicated scenario:…the unit owner is responsible for maintaining the unit hot water heater, but fails to do so. The association is responsible for paying a portion of the costs associated with resulting damage because the association’s insurance policy provides coverage.

Insurance

In assessing financial responsibility, determine whether the damage is

covered by or required to be covered by the association master insurance policy.

Hint: Pertinent provisions typically can be found in the insurance section of the Bylaws.

Insurance

Consider whether carve-outs to coverage apply:

• Personal property

• Mold remediation

Negligence

The governing documents may provide for unit owner liability in

cases of negligence.

Nido Line of Cases (Condominiums)

• Nido v. Ocean Owners’ Council, 37 Va. 664 (1989).

• Samuels v. Treebrooke Condominium Association, 41 Va. Cir. 109 (1996).

NEGLIGENCE DETERMINATION MATRIX

Yes

2. Did the unit owner breach this

duty?

No

The unit owner did not act negligently.

The unit owner is not responsible for the cost of the damages.

The unit owner did act negligently.

3. Did the unit owner’s breach cause the

damage?

Yes

No

4. Were there actual damages?

No

1. Did the unit owner have a duty

to act?

Is the cause of the damages covered by the proceeds of the Association Master

Insurance Policy?

The Board may assess the cost of the damages to the unit owner in accordance

with the condominium instruments.

Yes

No

Yes

The Board may assess the insurance deductible to the unit owner in accordance with the

condominium instruments

No

Yes

Other Considerations

• When in doubt, involve association legal counsel and insurance carrier.

• Amend condominium instruments to address ambiguities or inconsistencies.

• Adopt resolution to address negligence per se and insurance deductible.

Homeowners Association

General Rule (HOA)

• Association responsible for common area; and

• Lot owner responsible for Lot or any part thereof.

Maintenance Objectives

• Preserve and enhance the property;

• Increase resale value;

• Control long term costs;

• Potentially reduce insurance claims; and

• Ensure compliance with the governing documents and legal responsibilities.

Creating Facilities Management System

• Identify the physical assets to maintain

• Analyze maintenance needs• Record Keeping• Maintenance programs• Evaluate

Creating Facilities Management System

• Identify the physical assets to maintain

• Inventory all real and personal property

Creating Facilities Management System (Cont.)

• Analyze maintenance needs:• Inspect the property;• Review building plans;• Review the reserve study;• Review all maintenance records; and• Review product and equipment manufacturer’s

information and warranty.

Creating Facilities Management System (Cont.)

• Record Keeping• Maintenance calendar;• Maintenance records/reports;

and• Work order system and means

of response to requests.

Creating Facilities Management System (Cont.)

• Maintenance programs

• Routine and preventive maintenance - regular, recurring, i.e., mowing, cleaning or periodic maintenance (i.e. inspect irrigation system, HVAC inspections);

• Provide for in operating budget;• May be performed by contractor or staff;• Don’t micromanage.

Creating Facilities Management System (Cont.)

• Maintenance programs (cont.)

• Requested repairs

• Don’t assume responsibility;• If the association not responsible, don’t do

it;• Follow the documents - By assuming

responsibility, you assume liability;• Unfair to the membership.

Creating Facilities Management System (Cont.)

• Maintenance programs (cont.)• Scheduled replacement – retain

professional to perform a reserve study at least once every five years. • Compare the list of components with

requirements of governing documents; • Review and update reserve schedule annually

(working document used for planning and budgeting);

• Can be used to establish preventive maintenance (Example: retaining walls and fence).

Creating Facilities Management System (Cont.).)

• Evaluate

• Follow up with members, request feedback – survey;

• Review financial reports for significant variances and request explanations; and

• Inspect work performed.

Trees

Tree limbs create issues when they fall from one property onto another, causing damage. 

Trees (General Rule)

• Owner of the property on which a tree falls is responsible for damages to his property resulting from the fallen tree.

• Owner of the property where the tree is located is not responsible, unless the property owner is found to be negligent. 

• Damages can include clean-up of the tree and debris, removal of the tree or branches, and other similar expenses.

Trees (Negligence)

• Courts may find negligence if the Association knew or should have known that the tree was diseased, cracked, or showed other signs of possible danger to adjacent properties. 

• Results of an inspection by a qualified arborist would be helpful to determine whether the Owner should have known the tree limb posed a danger.

Trees (Case Law)

• Supreme Court ruled in 2008 in Fancher v. Fagella, a property owner may responsible for actual damages sustained to an adjacent property by intruding root system, overhanging limbs or droppings. 

• If an overhanging limb caused actual damage to a lot, Owner may be responsible for that damage. 

• Prior to ruling, property owners limited only to “self-help.”

Trees (Case Law)• The Townes at Grand Oaks Townhouse Association,

Inc. v. Byron Baxter, reviewed issue of whether cost of removal of fallen tree could be allocated to an individual owner. 

• Tree fell from common area onto Lot  - Association attempted to recover the cost of removal from the Lot Owner after removing the tree. 

• Court held that the Association was responsible for maintaining common area trees and that, absent insurance coverage, the Association was responsible for removal (from the Common Area), not the individual Lot Owner.