THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Saturday, October 14, 1995 TAG: 9510120235
SECTION: REAL ESTATE WEEKLY PAGE: 12 EDITION: FINAL
COLUMN: COMMON GROUND
SOURCE: G. ROBERT KIRKLAND and MICHAEL INMAN
LENGTH: Medium: 77 lines
Q. My condominium manager recommended that we have a reserve study since we had not even had one and the condominium is 10 years old. In the course of the examination of the property, our experts have told us that the roof was made of a very low grade product and has not held up and should be replaced in not less than two years.
Needless to day, the reserve account does not have enough money in it to do that roof renovation. We do not know whether the roof has any warranty. How can we find out?
Is the builder responsible since roofs are supposed to last more than 10 years? How can we raise the money to pay for the roof when the unit owners already are squealing about the regular assessment?
A. Unfortunately, you are not alone in making a discovery that there is physical deterioration to the common elements that requires significant expense well ahead of expectations.
This can happen with exterior siding, windows, parking lots and similar elements of the building.
Your first question is a really tough one. Unless you can contact the original builder, there is little chance of locating the roofing contractor. If you can locate the real estate company that handled the site sales for the builder, you may be able to get help in locating the builder and the roofer.
Sometimes original owners are given lists of subcontractors. One of the amendments to the Condominium Act that the community Associations Institute expects to sponsor this year will be a statute that requires that the builder turn over to the association various time deadlines that will be helpful in the future, including all warranties associated with the materials used during construction.
Any reader who has experienced difficulty getting this kind of information from the builder should write to us and help us prepare to put this bill ``in the hopper.''
The second question is easily answered in that the builder's liability ends two years after the first unit in your building or phase was sold. Obviously, that time period has lapsed.
Even if you have a contractual 10 year warranty, it is doubtful that the roof deterioration would be considered structural since the problem seems to be in the shingle material, not the trusses or the sheathing.
The next issue you raise is how can you raise the money to fund the roofing project. Raising money for large expenses is never easy. The first thing you need to do is look at your documents to find out whether the board of directors has the power to levy a special assessment.
It may require a vote of the unit owners to levy a special assessment, but it can be done.
Obviously, in this case it should be done one way or the other. Special assessments are made by obtaining bids for the project, deciding on which bid you are going to accept, and then dividing the cost equally among the unit owners. The next issue becomes whether to collect it all in one payment or in installments.
This decision is impacted by the amount you need from each unit owner, and how the roofing contractor is willing to be paid, and how long the project will take, that is, can the project be done in several phases.
Finally, you will need to ``sell'' the special assessment to the unit owners by thoroughly explaining in a special mailing exactly what has happened and what the needs are.
Be willing to answer reasonable questions from the unit owners. Also, be sure to explain to the owners that you have exhausted all other possibilities for a ``contributor'' to the cause such as a warranty claim. MEMO: G. Robert Kirkland, president of a Virginia Beach property management
consulting firm, and attorney Michael A. Inman specialize in Virginia
community association issues and are affiliated with the Southeastern
Virginia chapter of the Community Associations Institute. Send comments
and questions to them at P.O. Box 446, Virginia Beach, Va. 23458. To
submit questions by phone, call 486-7265; by fax: 431-0410.
by CNB