Reminders from the Surfside Condo Collapse
By: Riane N. Sharp
Now that some time has passed since the tragic collapse of the Surfside condominium building in Florida, two questions continue to ring louder than all of the others. “What happened?” and “How do we prevent this from happening again?” While government officials, family members of loved ones who passed away in the collapse and engineering experts will undoubtedly focus on and answer the first question, Winter Capriola Zenner wants its clients, especially high-rise condominium owners, to pay attention to the second question. There are many reminders for those living in and working with community associations, starting with the responsibility of the Board to serve as a fiduciary to its members and fulfill its duties of loyalty and of care to the Association’s members.
While serving on the Board is a volunteer commitment, the Board still has fiduciary obligations. A Board’s duty of loyalty centers on each director performing duties in good faith and prioritizing the Association’s interests over personal interests. Duty of care dictates that each Board member act with the same care that an “ordinarily prudent person” in similar circumstances would. Although the Board may have little expertise in finance, property management or building maintenance, Board members should undoubtedly do the following things.
Identify Structural Problems
The Board should arrange to have their building examined by an engineer every 5 to 7 years. Consider this the building’s full physical exam. The Association cannot fix what it does not know needs maintenance or repair, therefore it is crucial that the Association makes sure the appropriate experts evaluate the Association’s structures regularly. Make sure the engineer provides a written report with an opinion on the condition of the structures, any issues or potential issues and best remediation steps for full resolution. In addition, get an understanding of the severity and potential consequences of any issues identified. In some cases, the Association may have claims against those who designed and constructed the condominium if the claims are timely pursued. Therefore, it is essential that buildings are regularly examined. However, having buildings regularly examined is not enough, they must also be properly maintained and repaired as needed.
Properly Maintain Buildings
Once the Association’s structures have been evaluated and the engineer’s report issued, the Association should create a maintenance schedule to track issues and implement repairs. Always prioritize requisite structural repairs over preferred aesthetic enhancements and amenities, no matter how much the community might insist that a repair wait, or that money be allocated to pay for an amenity instead. Repairs should always be made in a timely fashion. A small repair that is ignored and delayed can morph into a big repair requiring more money and resources, in addition to being a bigger intrusion into the daily lives of unit owners and occupants.
Keep Unit Owners Informed
Anyone who has lived in or worked with a community association knows that very few decisions are unanimous, especially when it comes to money. The Board often experiences pressure to keep dues low and community members often resent Board members for fulfilling their duties, especially when it calls for more money. That is why it is important to keep unit owners informed and help them understand the necessity of repairs and the costs associated with the maintenance. Sometimes the source of opposition can simply be lack of understanding. To that end, provide the full inspection reports and contractor estimates to all unit owners for review. Allow them the opportunity to ask questions through a variety of mediums whether it be sending emails or through an open forum at a special meeting. Galvanize unit owner support and buy in by reminding unit owners that their home, which is likely their biggest asset, is their responsibility to maintain. In most cases, when a unit owner understands the “why” behind the ask, they are more willing to financially support maintenance.
Use Multiple Sources to Finance Maintenance
One of the most common reasons repairs are not completed is because the Association has insufficient funds. However, deficient funds are not an excuse for failure to perform essential maintenance in a timely fashion. This is why it is crucial that an Association get a reserve study to determine the Association’s future maintenance needs and create a financial plan to save for those future expenses in a manner that is the least burdensome to unit owners. Once an Association receives a reserve study, it is important that the Association reserves are regularly funded whether that be by incorporating the necessary contributions into the annual budget, amending the governing documents to allow for initiation or transfer fees that are earmarked for the reserve fund or by levying special assessments to cover the costs of the expenses. In addition, when it comes to building safety and maintenance, Boards should consider applying for loans to cover the expenses if the reserve fund is not enough to secure the needed maintenance.
As Ben Franklin once said, “Don’t put off until tomorrow what you can do today.” The ability to do maintenance today comes from being prepared when needed. If your community has not had a reserve study conducted or established a reserve fund, do that today. Then act on any immediate maintenance issues, while regularly contributing to the reserve fund. Have your building inspected regularly by experts and if you see something that requires attention, say something.