1. NAVIGATING THE MAINTENANCE REPONSIBILITY MATRIX Tips on Deciphering Maintenance Responsibility and Liability Presented by Jeremy R. Moss, Esquire MercerTrigiani Deborah A. Carter, CMCA, AMS, General Manager Westridge Swim and Racquet Club, Inc.

2. P RINCE W ILLIAM C OUNTY N EIGHBORHOOD S ERVICES 2013 Homeowner & Condominium Leadership Seminar October 25, 2013

3. 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.

4. The Question(s) Who is responsible for performing maintenance? Who bears the costs performing maintenance?

6. What Must Be Considered Governing Documents (HOA ) Declaration Virginia Condominium Act (Act) Condominium Instrumen ts Declaration Bylaws Maintenance Responsibilities Chart Plats and Plans

7. Condominiums

8. 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.

9. 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.

10. 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

11. 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.

12. 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.

13. 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).

14. Modification of General Rule The governing documents may modify the general rule(s): Bylaws (Condominium) – Maintenance, repair, and replacement section. Maintenance Chart – Sometimes an exhibit to the Bylaws.

15. Sample Bylaw Provision (Condominium)

16. Who is responsible for the cost of maintenance, repair and replacement in the event of a casualty event?

17. 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.

18. 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.

19. 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 associations insurance policy provides coverage.

20. 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.

21. Insurance Consider whether carve-outs to coverage apply: Personal property Mold remediation

22. Negligence The governing documents may provide for unit owner liability in cases of negligence.

23. Nido Line of Cases (Condominiums) Nido v. Ocean Owners Council, 37 Va. 664 (1989). Samuels v. Treebrooke Condominium Association, 41 Va. Cir. 109 (1996).

25. 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.

26. Homeowners Association

27. General Rule (HOA ) Association responsible for common area; and Lot owner responsible for Lot or any part thereof.

28. 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.

29. Creating Facilities Management System Identify the physical assets to maintain Analyze maintenance needs Record Keeping Maintenance programs Evaluate

30. Creating Facilities Management System Identify the physical assets to maintain Inventory all real and personal proper ty

31. Creating Facilities Management Sy s tem (Cont.) Analyze maintenance needs: Inspect the property; Review building plans; Review the reserve study; Review all maintenance records; and Review product and equipment manufacturers information and warranty.

32. Creating Facilities Management System (Cont.) Record Keeping Maintenance calendar; Maintenance records/reports; and Work order system and means of response to requests.

33. 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; Dont micromanage.

34. Creating Facilities Management System (Cont.) Maintenance programs (cont.) Requested repairs Dont assume responsibility; If the association not responsible, dont do it; Follow the documents - By assuming responsibility, you assume liability; Unfair to the membership.

35. 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).

36. Creating Facilities Management System (Cont.) 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.

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

38. 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.

39. 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.

40. 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.

41. 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.