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February 20, 2008
More on Noise - Can a Developer Be Held Responsible?
Just today, during my HOACHAT at noon on issues including noise and hard surface floors (which is a free offering you can join on Wednesdays through my website at http://www.californiacondoguru.com) one of the "attendees" asked: "Can a developer have responsibility when there are noise issues through the walls and floors of a condo?
Noise is a problem in many stacked and wall-to-wall condos. Sometimes alternations and modifications are made by owners in condos that were not meant for hard surface floors. But that is for another blog.
Sometimes a developer will tell you that space is left between the walls of the adjoining condos and that reduces the noise (well, sometimes they will say it eliminates noise transmission but I think that anyone - including me - that has lived in such a condo situation and fell for that line knows better). Sometimes the developer will say, "Sure choosing the laminate flooring upgrade is fine because we add soundproofing," and you think - "Great!" ... And you buy, ... and then experience - "not so great results." I wrote an earlier blog suggesting that the extra money developers collect for installing laminate or hardwood floors in stacked units or townhouses should be placed into a fund to be used later to mediate flooring noise issues. Maybe this sounded like a "flip" comment, but ... why not?
And the answer of course is "Yes", a developer can have some responsibility. And that is apparently what happened in a Colorado case back in 2005. The case took place in Arapahoe County Colorado and it is reported that some of the residents were awarded punitive damages against the developer (as much as $150,000 each, plus costs of trial) and others settled with the developer before the matter came to trial. The owners' attorney's name as reported is David TeSelle. The articles say that the developer had to outfit units with soundproofing materials
I am not representing that this case controls anything in the legal arena, and there is always more to anything than meets the eye. If there were lots of big cases granting damages for noise pollution, builders and architects would have moved noise control to the top of the list of concerns. It does not appear to me that this has occurred, because the noise complaints continue to rage all around the state and in fact, in the nation. I have not located appellate level cases on this subject but feel free to send me some if you read this and know of some so I can add them to my musings.
But I am saying take heart, anyone can be sued for anything, and (hopefully) in matters that escalate to litigation, the culbable party or parties will be "outed" and have to compensate those that are wronged or taken advantage of. I am a California attorney and do not know Colorado law, or the particulars in the Arapahoe County case; however, further research could be done if one wanted to find out more.
My point in discussing this case and this topic is to say that developers need to get on board. And owners need to speak up, to the developer, to the homeowners association, and to each other, if there are noise issues in your building (unless, of course, you want to "move out quietly").
If you visit http://rismedia.com you can find an article about buyers and sellers combatting noise issues, and the gist of the article is that condo builders and architects should take heed. Certain building design and construction is critical if one wants to seriously reduce or eliminate noise transmission between the units.
The article says that while developers or architects might at first refuse to make noise isolation issues a priority because of the cost, they may come to their senses the next time around and spend the money, if they are plagued with complaints from the residents of a building they were responsible for. The article acknowledges that "Quiet does not happen by accident, it has to be engineered ..." and suggests that when you are thinking of buying a condo, it makes sense to set up a sound test, like making sure the neighboring toilets are flushed, the jacuzzi tub next door is filled (and I assume the jets are turned on), the neighbors walk around in their usual foot attire, and run televisions and sound systems.
Nice thought, but it could certainly slow down sales, in more ways than one, especially if potential buyers are given access to current resident neighbors. Short of such a comprehensive test, I think it wise to make sure you have the opportunity to go into a unit during the day, and at night as well, that is next door to a condo with active kids, even if it is not the one you are slated to buy. There is a probably a very good reason that "models" are often built close together and often isolated from the "inhabited" condos or townhouses.
Is it fair to expect a noise-pollution free environment in a condo or townhome? Maybe, if you are willing to pay a premium for it, but in most cases, probably not. But it should be fair to expect that you will not hear the neighbors whispering, talking at low volume, getting a drink of water, having sex, watching TV at a reasonable volume level. If you want more protection, ask developers about the construction of the walls, floors, and ceiling, and whether there is any vibration reducing construction, and write it down, and then talk to an accoustic specialist. This bit of information might help you if you want some more comprehensive research before buying. And accoustics specialists can also be located on the web.
Noise isolation and control may be moving up the priority list of amenities, and well it should. New technology encourages wall mounted window sized TVs, and surround sound systems.
Noise disputes are never easily resolvable, and they make people do things they would not otherwise ever consider doing! And worst of all, they make people sick! If you do not believe me, visit http://newscientist.com and read the articles including one entitled "Hidden Harm from Noise Pollution". In the article which appears in issue 2365 of the New Science magazine, December 22, 2007, the article claims: "Noise kills in much the same way as chronic stress does, by causing an accumulation of stress hormones, inflammation and changes in body chemistry that eventually lead to problems such as impaired blood circulation and heart attacks."
Now, don't get me wrong because while I am saying that noise pollution or transmission disturbances in condos and townhomes can be insidious and must be taken seriously, I also believe that all parties should work toward resolving the issues by means other than litigation. Just because there is noise, and just because it is disturbing, that does not mean there will be big bucks in your future. Visit earlier blogs to help sort out how culpability might be determined, and do not expect that this will be the last blog on the subject.
Posted by Beth Grimm at 8:54 PM
February 14, 2008
STOP THAT INFERNAL WALKING!
This is my 301st blog! Thought it worthy of some unusual step. Since I have on my plate neighbor to neighbor issues today, I decided to give neighbors their own category on this blog.
So, to kick off this special day, I have more to offer in the way of determining fault, options (or lack thereof) and solutions (to the extent there are any) on issues noise related - namely, to hard surface flooring. By the way, if any of you out there are claiming that you cannot live below carpetted-properly padded unstairs rooms, consider yourself lucky, because there is a whole world of unhappy owners out there living under hard surface flooring, and its getting worse every day because there are more and more and .... (well,. this seems a good place to stop with the madness).
So here is the latest that has come to my attention. Different sources sent me an article entitled "The Case of the Upstairs Condominium" apparently written by a flooring person or an attorney, I am not sure which. None of the parties identified the source of the article (naughty naughty) so I do not know who to thank (except if your initials are DLW give me a call or an email and identify yourself, and I will give you full credit). You may be asking me what a flooring person and an attorney could have in common. The article said that the person had received several calls in recent months from homeowners and homeowner association boards about noise issues related to hard surface flooring. That could be a flooring person or an attorney, right?
Anyway, to get to the point, the article talked about a "test" that can be performed to test "the level of noise transmitted through the assembly ..." of a sound level meter. It takes a specially trained accoustics specialist to read the noise from upstairs created by a specialized piece of equipment called "a tapping machine". This machine, according to the article, imitates the impact on the upstairs floor created by a person walking. The measurement from this test can be expressed as a single number that is called "Impact Insulation Class". According to the article (and by referring to it, I guess I cannot be "blamed" by anyone if this is incorrect information), California's "Title 24 Standards require that floor/ceiling separation assemblies between units in miltifamily developments achieve an 'IIC' rating of not less than 45 when field tested."
So I will add this to my list of considerations published earlier, when one is considering what to do about a noise problem related to hard surface flooring, which (now) is reiterated in a (new) list of questions to ask. As for the HOA, the developer, the flooring installer, or any other party that might be confronted with a noise-flooring issue here are some pertinent questions to ask:
**Is this a pre-existing condition or did something change, i.e., flooring, neighbors, change in family circumstances, residents (number or age), and if there was a change that is now creating a problem, will it be remedied any time soon?
**Are you just the problem, or also part of the solution?
**Did you do anything to cause or exacerbate the noise issue(s)?
**Did you do anything to mitigate or minimize the problems or condition leading to the problems?
**Did any of the parties violate the governing documents in their actions?
**Has anyone arranged for an "IIC" or other flooring impact analysis test to be done?
**Was there any requirement or duty to make disclosures?
**If so, were those disclosures made to the right party?
**Are there any viable solutions that do not involve expecting the impossible, such as moving when economics or life logistics do not allow it?
I cannot say that this "IIC" test will make or break any situation. First of all, I do not know if it is well recognized in the industry and by the courts (feel free to send me info on this). And, I do not believe it is necessarily the end of the inquiry. As described, it presents a test with a minimum standard, and I for one believe that the standards for condos should be higher than apartments because if someone does not like the upstairs noise in an apartment, they can move. They have little to lose. When one purchases a condo, the solution is much more complicated. If they remain quiet, they risk having a disclosure issue come up after sale. If they make noise, they risk creating an issue where one might not be there for the next person. Believe me, peoples' tolerance levels seem to be all over the map - and when "friends" live upstairs, people are much more tolerant than if they have nothing in common with the upstairs neighbors.
But, the saga continues. And I will continue to say that if attorneys continue to tell developers not to put limitations on hard surface flooring un upper stacked units, and attorneys continue to tell HOAs not to put stringent limitations and standards on the installation of hard surface flooring, and owners continue to be discourteous (like placing speakers on hardwood floors and turning up the base, like refusing to try any form of carpet or padded runners in traffic areas, like giving the neighbor who complains the finger instead of listening to what they have to say), the problems will not go away.
Of course, before condemning attorneys, I should say that the attorney does not make the ultimate decision on what goes into the governing document or the rules or standards. The developers and HOA boards do that. In every set of docs I have written in the past 20 years (ugh, has it been that long) that involves stacked units, I have advised boards to put some limitations or restrictions on hard surface flooring in the upper units. More than half, probably more than 90% (I lost count) have heeded my words and done it, but those that rejected my suggestion either could not fathom that it could ever raise an issue, have put property values ahead of human values, or have had or were considering converting to hardwood or laminate floors. Had they put limitations on the flooring, at least, if the HOA did not want to spend the money to sue someone who installed hard surface floors without getting approval, the neighbor below would have a potential remedy for the violation of the documents. However, this sometimes falls on deaf ears.
It seems simple to me. If there is a prohibition on installing hard surface flooring in upstairs units, or there are standards involving installation of cork or some good form of padding below the new floor, or developers go the extra mile to add good and true soundproofing materials below hard surface or laminate flooring, it eliminates a major problem. That problem is the awful situation that occurs when the parties might otherwise be willing to resolve the issues but are left looking at major reconstruction (raising other potentially serious issues) involving both the upstairs and downstairs units as the only remedy.
People. Wake up!
Posted by Beth Grimm at 11:18 AM
February 9, 2008
HOA Owners Are Continually Confused By Assessment Limitations
About assessments ... sometimes when I write about assessments, I get questions back that I do not really understand, meaning I do not comprehend what is going through the minds of readers. So then I think it is time to try and explain.
Here are some such recent questions that were asked me by a reader:
"My questions to you are as follows:
Doesn't the quorum requirement stated in 1366 (b) below have to do with the HOA's ability to conduct the Special Meeting to discuss the Special Assessment, rather than the percentage of Membership approval?"
My answer to this is: The quorum requirement in 1366 clearly defines what percentage of owner approval is needed to approve an assessment that exceeds the legal limits as stated. It has does not dictate meeting requirements.
The statute says:
"(a) Except as provided in this section, the association shall levy regular and special assessments sufficient to perform its obligations under the governing documents and this title. However, annual increases in regular assessments for any fiscal year, as authorized by subdivision (b), shall not be imposed unless the board has complied with subdivision (a) of Section 1365 with respect to that fiscal year, or has obtained the approval of owners, constituting a quorum, casting a majority of the votes at a meeting or election of the association conducted in accordance with Chapter 5 (commencing with Section 7510) of Part 3 of Division 2 of Title 1 of the Corporations Code and Section 7613 of the Corporations Code. For the purposes of this section, "quorum" means more than 50 percent of the owners of an association.
(b) Notwithstanding more restrictive limitations placed on the board by the governing documents, the board of directors may not impose a regular assessment that is more than 20 percent greater than the regular assessment for the association's preceding fiscal year or impose special assessments which in the aggregate exceed 5 percent of the budgeted gross expenses of the association for that fiscal year without the approval of owners, constituting a quorum, casting a majority of the votes at a meeting or election of the association conducted in accordance with Chapter 5 (commencing with Section 7510) of Part 3 of Division 2 of Title 1 of the Corporations Code and Section 7613 of the Corporations Code. For the purposes of this section, quorum means more than 50 percent of the owners of an association. This section does not limit assessment increases necessary for emergency situations. ...[ctd.]"
... And in anticipation of your questions, yes, the language of the statute is confusing.
Next question asked: "If not, why do HOAs need to have governing documents which contains different Membership percentage approval requirements, example 67% for Special Assessments? What about Corporations Code which permits higher percentages of Membership approval? How do those affect HOA governing rules and Civil Code?
Confusing question, yes? The answer I would offer is the Corporations Code does not govern assessment increases, the Civil Code does. And there are still many governing documents in existence that do not reflect what the law says accurately. In those cases, attorneys have to determine which controls, and I have already stated my interpretation of CC 1366 is that it controls.
And here is the last question posed to me: "Maybe I'm not understanding the statute (like you stated in the article...ha!)...Is, as in the aforementioned example, 67% considered more than 50 percent of the Owners of the Association?"
A 67% approval requirement is more than 50%. A majority requirement is more than a majority of a quorum. People often confuse quorum and voting requirements, and that is really understandable. For assessment increases that are put to a vote because they exceed 20% of the regular assessment or a special assessment that exceeds 5% of the budgeted gross operating expenses for the fiscal year, according to CC 1366, which I believe controls, more than half of the members need to vote, and of those that vote, more than half need to approve the assessment, for it to be valid.
I hope this helps.
One last word - the elections for assessment increases that need to be voted must be conducted using the elections procedures under Civil Code Section 1363.03. That form of voting requires distribution of a double envelope balloting packet and at least 30 days between sending out the ballot and counting them, so while the ballots may be counted at a meeting, according to California law, the vote may not specifically be "taken at a meeting".
Posted by Beth Grimm at 10:11 PM
My New Book is Out!
"Talk about misconceptions and misunderstandings…the homeowners’ association industry involving condominiums, shared amenity living, and shared responsibility is full of misconceptions and misunderstandings. The general public has processed its share from the negative “connotations” and bad press rampantly played out in the newspapers, magazines and tabloids, and even on TV and in the movies. The tabloids love a good “the board president was run over ten times by a resident who was not allowed to wash his car in the common area” story. X-files presented an episode based on a situation where the board eliminated (yes I mean that literally) owners who did not follow the “rules”. And when Jerry Seinfeld’s father became the subject of a nasty recall battle because he was suspected of pilfering association money when seen driving around in a new Cadillac purchased for him by his son, Jerry, the audiences loved it. Children are now exposed to it at an early age with the latest movie featuring “condo commandos” who seem to run the place without regard for the creatures just trying to find a good place to coexist with people.
So, are there answers to the questions and quandaries that arise? Yes, there are."
For those of you who do not know I had written a national book on condo living and the things that inquiring minds want to know ... I did. What appears above is the introduction to the book.
And it has been released, and is available on Amazon.com. The name of the book is "Condo Questions and Answers" and the publisher is Sourcebooks, Inc.
Hope you like it!
Posted by Beth Grimm at 9:39 PM
SPECIAL ASSESSMENTS IN TRYING TIMES
WOW, I cannot remember more difficult times for talking to boards and members about big but necessary special assessments. The meetings these days are becoming more and more challenging when a board has to face the membership to talk about how to raise multi-thousand dollar per unit assessments for repair work, it is not fun. But truth be told, if the Board does not tell the membership about a looming big problem, it will probably snowball down the hill into a much bigger problem ... so don't shoot the messenger.
Walking up to the front of a room filled with people who just cannot believe the rumor mill or the newsletters that have been circulated lately that suggest everyone may have to come up with $5,000, $10,000, $20,000 or more takes a brave soul. There are always a few in the audience who are ready to pounce. You can feel it, you can see it, and you can believe it will happen in every single meeting. It can take a board entirely by surprise as the board members often have a hard time fathoming that their neighbors could so easily turn on them, like a mad dog. One of the sorriest things in any association that has serious building deficiency issues requiring a special assessment that can happen is the Board tries to move the process on its own, and stumbles through the communications process, messes up the voting process, wonders why it is hit hard in the collecting process, and suffers the aftermath of all things done wrong.
I attend these meetings periodically, as do many professionals, including attorneys, bankers, CPAs, and the contractors. All of the people the Board uses to assist with getting through the process of passing a very large special assessment need to be experienced in dealing with these issues, and thick skinned, because the only way to get the necessary message through to owners is to be able to remain calm, strong, and smart.
My mantra: For every problem, there is a solution. Sometimes it becomes a chant inside my head, just so I remember.
I plan to do more blogs on this subject because it is so critical a time to get it right. In this one, I want to use something written by a colleague of mine who, like me, puts out free information that helps many in California understand the intricacies of how the California laws affect the day to day operations of homeowners associations in the state. I have permission from Adrian Adams to reprint the article below that appears in quotations. Adrian is a Southern California attorney whose firm hosts the Davis-Stirling.com website and E-newsletter (suggest you sign up for his - by visiting Davis-Stirling.com ... and mine at www.californiacondoguru.com to stay informed).
As a lead in, I will say that this article succinctly describes the process I see take place at every single HOA meeting I attend where the board and management are presenting to members the full scope of the bad news about the building deficiencies that have been discovered, and the large special assessment that is going to be needed to pay for it.
"SPECIAL ASSESSMENTS, DEATH AND DYING
QUESTION: The board recently informed everyone that we are facing a large special assessment to reroof and waterproof our buildings. I don't believe them. What can I do to stop the assessment?
ANSWER: In her 1969 book, On Death and Dying, Swiss-born psychiatrist Elizabeth Kubler-Ross outlined the five stages of grief of someone who is dying. Over the years I've witnessed owners going through the same stages when they face large special assessments. Following are the stages:
Denial. "They don't know what they're talking about." "The contractor is just looking for work." "The repairs are not necessary." "The board must be getting a kickback." "Let's recall the board."
Anger. "Who can we sue for this disaster?" "Management was incompetent." "Let's recall the board and sue somebody."
Bargaining. "Can we defer the repairs?" "Can't we just patch the roof (until I sell my unit)?" "Are there cheaper alternatives?" "Will insurance pay for the repairs?" "The board is being unreasonable; let's circulate a recall petition."
Depression. "I can't bear the costs." "This will force me to sell my unit." "I can't put my family through this." "How do we recall the board?"
Acceptance. "I'm ready, I don't want to struggle anymore."
Recalls. Unfortunately, some associations don't make it to "Acceptance." Instead, a small group of owners will lead a charge to recall the board and stop the repairs. Sitting directors will often throw up their hands and resign or be recalled. The new board then shuts down all work and fires everyone in sight. This usually leads to litigation from owners who are suffering from water intrusion and mold. Finally, after costly litigation, the association is forced to make the repairs originally proposed; only now they have legal fees and the repairs are more expensive.
Recommendation: Make the repairs. It's cheaper in the long run."
In a later blog, I will cover the difficult issue of how to move forward in a manner that encourages all owners to participate in the solution as opposed to only those who can come up with the special assessment without help. This is a critical part of the solution. Otherwise, imagine the backlash on the fiscally stable owners when the special assessments that have to be written off due to foreclosures or walk aways come back in tidal wave fashion on those who thought they were home free. If you want to know what I mean by this, watch for future blogs, and I hope soon to make a publication available on my website called "The Enigma of a Special Assessment".
Posted by Beth Grimm at 8:58 PM
February 1, 2008
The "Taste" Test For Your Upcoming HOA Election - Do You Want Sour Lemons or Butterscotch?
Okay, maybe I have been a little hard on Boards and even attorneys in the last two posts on my blog. And since I know for a fact that owners can be just as problematic, I thought I would set the record straight. I am not in favor of people serving on the boards of their association if they are not in "good standing". By "good standing", I mean current with their assessments and in compliance with the governing documents and rules.[Note, this does not mean that anyone can go out and say it's illegal for a Board member to serve if they are not in "good standing". The question of legality can be resolved, but not by me, speaking my opinion - it would have to be resolved by a review of the governing documents.]
And although I think it more trouble than its worth in most cases, I believe that a Board does have a right to suspend a member's rights to vote in an election - if the CC&Rs or Bylaws (note, I did not say Rules and will explain below) provide the authority for it. What sometimes happens though is that Boards recognize they have a right to suspend a member's rights to vote, but miss the requirement (which is often present in the documents, although perhaps not in tidy language along with the suspension provision) of a hearing that must take place before the member's rights are suspended. Even if the documents do not have a requirement for a hearing before suspension of membership rights, the Corporations Code does, in Section 7341 - which requires a hearing before a member can be expelled or suspended. And yes, I know that there are those who will say 7341 does not directly apply, because we are talking about suspending the right to vote, but not suspending the member.
What I believe is that suspending a member's right to vote or suspending their right to attend a meeting are issues that go right to the heart of membership itself. And I am of the "camp" that believes if a member's right to vote is going to be suspended, that they have a right to know that before the election occurs, so that they can cure the deficiency if they want to. Sometimes an owner will not even know there is a problem, unless the Board sends notice to them.
And this is why I added the cavaet about rules vs the governing documents, when it comes to suspending member's rights.
The authority in the CC&Rs and Bylaws has higher integrity than the Rules. And although the Rules can provide more detail on any given subject, the authority for the Rules must come from the documents. I am not of the "camp" that believes a Board can alter the membership rights in the corporation, such as suspending rights to vote, by setting Rules just because the documents say the Board can set Rules. There is a difference between altering membership rights in the association and controlling use of property through the imposition of Rules (and what you can put in Rules relating to use of property is for a whole other discussion someday).
And this is where the "taste" test comes in. I suggest skipping the sour lemons and going right to the butterscotch - meaning address the membership in a way that "tastes better". Let all members whose rights might be suspended in an upcoming election know exactly why and what they can do to remedy the problem to be able to vote. If a hearing is not required per the documents, so be it. Even if a Board can suspend the rights or the documents say that an owner has no right to vote if their assessment account is not paid in full - it makes sense to let the owner know that this is jeopardizing their right to vote. If they want to vote, they are likely to clear up the problem! If you don't want them to vote, and you would rather spring it on them by noting when the ballots are counted that some ballots are being pulled for nonpayment of assessments, or some other issue, you are as much of a problem as they are.
An election tastes like sour lemons (maybe even worse, if really tainted) when owners are disenfranchised for the wrong reasons. Sure, I understand that Boards are often sick of people who complain at the meetings, withhold assessements, make architectural improvements without approval, and make their lives miserable. After all, who wouldn't be? But cutting them out of the election process without acting responsibly, and understanding the requirements in the governing documents, lowers the level of respect and suggests either incompetency or an inappropriate motive. And timing is everything. These are things the Boards should think about well ahead of the election:
Are we going to prohibit people from voting because of .......
If we are, we ought to make sure we do it right.....
Maybe we need professional advice ...
From a professional that sells butterscotch, not sour lemons.
Posted by Beth Grimm at 9:25 AM