So you’re Association faced with doing a renovation project – where do you start? The first place the Association should start with is the Declaration – the association attorney can help ensure that the Board is complying with the Declaration’s requirements.
1. Following procedures: the Association attorney can help ensure that the Board follows proper procedures. A Declaration will typically have requirements for meetings and voting that has to take place before the project work can begin, and the association’s attorney can guide the Board through the process of meeting those requirements.
2. Multiple bids: sometimes a Declaration will state that the Board is required to get multiple bids from contractors before selecting one vendor and beginning work. While it may not be required, we recommend that the Board gets multiple bids in order to compare them and decide which contractor will best fulfill the Association’s needs.
3. Vote of the owners: Will the project meet or exceed the thresholds stated in the Declaration that requires a vote of the owners? The thresholds will depend on each Association’s governing documents, but limits can be anywhere from $5,000.00 – $15,000.00 per unit. Generally speaking, it’s going to take a super-majority vote to opt not to do a renovation project, and it’s also going to take a super-majority vote to decide to do a renovation project.
4. Repairs vs. Capital Improvements: a repair is where the Association is replacing “with like kind material(s)”, while a capital improvement is adding something new – like a swimming pool. There is a potential gray area when a defective product is replaced with different and improved product (for example, defective siding replaced with better quality siding), so we recommend for these situations that the Board does follow the Declaration’s procedures.
5. Damage and Destruction: typically there is a provision in the Declaration titled “Damage and Destruction”; this section may apply due to the type of damage or deterioration that has occurred.
6. Separate Budget: does the Board need to pass a special assessment or another type of provision in order to fund the renovation project?
If your Association is facing a renovation project and you have any questions, please let us know. And, if you have any questions we can answer, please feel free to leave a comment or contact us directly. We look forward to continuing this conversation with you in our future posts!
[…] This post was mentioned on Twitter by Condo Law Group, Ben Kakimoto. Ben Kakimoto said: RT @condolaw: New at Condo Law Group Blog | Seattle: Renovation Projects and Your Governing Documents http://is.gd/fycNP […]
Our Bylaws states that the Board has the authority to make decisions on purchase and repairs for up to $5,000 without a vote of the homeowners. Yet, the board has decided without a vote to remove our swimming pool. This will cost $40,000 per the Board. How can the homeowners demand a vote on this decision. How can we make the Board responsible and follow our Bylaws. I have a petition going, but am not able to walk the whole 499 homes. Is there another way to stop them from deciding on this without homeowner votes? A survey has been sent out by the Board and they think this is sufficient. Only 45 people returned this survey. I think an absentee vote would be more appropriate. Please advise
The governing documents for your association – the Declaration/CC&Rs, any amendments, and Bylaws – are where the answers to your questions lie. Based on your question, a number of issues come to mind, including securing the correct owner approval for a large expenditure. However, removing a swimming pool – which is a common element – likely also “triggers” another section of your Declaration dealing with modifications to, removal of, or additions to common elements. That section of your Declaration may require a different percentage of ownership approval than the percentage required to approve a large expense.
We would advise an association client in these circumstances to look to that section of the governing documents, and any other relevant sections, and to secure the approval of the correct percentage of homeowners before proceeding.
There are probably sections of your governing documents that allow you, as a homeowner, to call a special meeting of the association to recall the board of directors or to require the board to take different action than they plan to now. You could also challenge their actions in court (though some associations have arbitration provisions).
Given the relative complexity of the issues you’re dealing with, and the multiple different “moving parts” (sections of your documents) that probably come into play, we recommend you seek the advice of an attorney experienced in community association law to assist you going forward. This link will take you to a list of such attorneys via the Community Association’s Institute website.