Planning To Win In An HOA

Written by Posted On Tuesday, 22 February 2005 16:00

Tom, the Board President of Coastal Village Condominiums, slammed the telephone receiver down after talking to the property manager and breathed a heavy sigh. After having to deal with several significant dryrot projects over the past five years, there was more yet to come. How could this have happened? The association had spent several hundred thousand dollars already to fix dryrot... what now?

Coastal Village had the misfortune of being built with the Northwest's favorite building product, wood... wood framing, wood steps, wood siding, wood shingles. It was beautiful to look at, yes, but cold, rainy weather and wood buildings, unless properly constructed and maintained, are a formula for disaster. In the case of Coastal Village, the condominiums were built with T-111 siding, a type of decorative plywood panel with presawn grooves for accent. Where the siding panels met, decorative "batten" strips were installed to cover the seams. On several recent site inspections, it was noticed that in places there was mushroom growth coming from beneath the battens. Woodpeckers had also been drilling holes in the siding, a further indication of dryrot.

So what is dryrot anyway? In brief, dryrot is wood cancer. Actually misnamed, dryrot occurs under wet, cool, overcast conditions that frequent much of the Northwest. Spores that thrive under these conditions grow and multiply, breaking down wood fibers and the structural integrity of wood building materials. Dryrot spores love dark hidden places beneath the siding like studwalls, subflooring, and floor joists. Unlike termites and carpenter ants, there is often no telltale signs until it erupts on the surface. A dryrot spot in the siding is often indicative of a much worse problem beneath... the proverbial tip of the iceberg.

Dryrot causes major structural damage and is a call for action. The Board of Directors and property manager met to discuss the preliminary findings. It was recommended that an inspection report be developed that could be used as a basis for action.

Who was to develop this report? While a licensed building inspector can identify dryrot, correction usually requires technical knowledge of construction materials and techniques. The board approved an architect experienced in dryrot and gave him the task of physically inspecting all buildings. Lastly, a written communication was mailed to all homeowners advising of the dryrot alert.

It took the architect several days to complete the site inspection. Siding was probed for softness and marked, crawlspaces were inspected where possible for rotten subfloors or joists, batten boards were removed and all roofs were inspected.

It was obvious that there had been a major original construction oversight: the siding had not been preprimed before the battens were nailed on, leaving raw wood underneath the battens. Over time, rainwater had seeped behind the battens, soaking the wood and giving dryrot a foothold. The "weather" sides of the buildings showed a greater decay but virtually all sides of all buildings showed varying degrees of deterioration.

The architect wrestled with the proper solution: Do a remedial repair (patch) or a comprehensive reconstruction? The board had experienced several "partial" fixes only to return to the problem all too soon. A special board meeting was called and all homeowners invited to attend, the architect presented a comprehensive report detailing his findings. His recommendation: replace all siding and trim boards, performing needed repairs to the underlying structure. The board's logical response was: How much is all of this going to cost?

THE BIDDING PROCESS -- An invitation to bid the project was sent to experienced area contractors. "Experience" meant specific and verifiable dryrot repair experience. Area contractors were chosen for proximity and ease of warranty followup work. The use of in-state contractors also meant more recourse for warranty issues through the Construction Contractor Board.

Interested contractors met with the architect at a bidder's walk-through held at Coastal Village. Questions were asked and answered by the architect. The architect also considered suggestions from the contractors on materials and correction techniques to use. The three hours were well spent and revised job specifications were sent out to the contractors within several days. They were given 30 days to submit a written bid.

Once the bids were received, the board scheduled another open meeting to which homeowners were invited. The bid review meeting was most interesting. Dryrot repair bids generally cause much uneasiness. Why? There are always two parts to the bid: Part One offers a set price to repair what can actually can be seen. Part Two deals with what cannot be seen on a "time and material" basis. So the board asked the logical question: How much should we plan for in total? The architect's best guess: triple the Part One bid.

There is an expression that goes, "If you're going to New York, don't stop at Chicago." After discussing the dryrot repair bids, one board member suggested that if all siding was to be removed, why not replace the outdated aluminum windows with more energy efficient ones at the same time? Aside from the fact that the cost of the siding repair alone was sizeable, the suggestion made a lot of sense. The board, keeping an open mind, agreed to look at options and costs.

Then, a board member/building contractor decided to submit a bid to do the work. That bid was substantially cheaper than the others received. Since there was an obvious conflict of interest, the remaining board members agreed that if his bid was accepted, he would have to resign from the board. The architect inspected the contractor's work and references, and reported back to the board that all was acceptable. Based on the recommendation, the board accepted his proposal and he promptly resigned from the board.

The stage was now set. Based on combined estimates to replace all siding, paint, roofs (didn't I mention that roofing was needed too?), and install new windows, the board approved a special assessment of, hold on to your hat... $14,000 per unit.

An elaborate presentation was carefully prepared and laid out at the Annual Homeowners Meeting six weeks later. Samples of dryrotted siding, window, and roofing samples were exhibited. There were several vocal owners that made their case against the assessment loudly. One howled "MISMANAGEMENT." Some had legitimate concerns about not being able to pay. However, most listened patiently to the discussion. All were given a chance to ask questions and give opinions. It was a l o n g meeting. The board called for a vote of confidence and fell only a few shy of unanimous approval.

Following the meeting, a formal notice of special assessment was mailed to all owners of record. For those of limited means, a three year payment option was included, while a discount was offered to those that prepaid.

It is said that an earthquake's after shock is often the worse part of it. After the special assessment notice was received by those that had not attended the Annual Meeting, the board was bombarded with phone calls again. It was obvious that there was still more damage control to be done.

Another meeting was called and many that missed the Annual Meeting were in attendance, as well as others that had come before. Of course, there was a rehashing of old information for those that missed it the first time around. The board patiently indulged all input, positive and negative. While the meeting was long, this time it was different. Many of the owners that had attended the Annual Homeowners Meeting stood in defense of the board. By meeting's end, the overwhelming majority again affirmed the special assessment. Some thoughtful owners actually offered well deserved thanks to the board for their hard work.

The Moral of the Story: This board undertook a HUGE challenge successfully using the following techniques:

  • Teamwork: Once alerted to a problem, a meeting of the whole board was convened. The board acted as a unit, and unity was crucial to success.

  • Consultation: A specialist was hired to determine the scope of the problem and proper correction. That informed opinion served as a solid foundation for action.

  • Communication: Homeowners were notified early and updated regularly.

  • Integration: All owners were allowed to give input into the solution.

  • Patience: The board systematically analyzed and implemented the plan.

  • No Conflict of Interest: When a board member wanted the job, he did not vote on the matter and stepped off the board when he was selected.

  • Re-Evaluation: The board made course corrections, like adding window replacement, when logic dictated.

The leadership of the board was elected to make tough decisions and they understood the need to lead. This board was successful by integrating all of these important components. In so doing, they succeeded in achieving the ultimate goal of a community association: Harmony

Rate this item
(0 votes)

Agent Resource

Limited time offer - 50% off - click here

Realty Times

From buying and selling advice for consumers to money-making tips for Agents, our content, updated daily, has made Realty Times® a must-read, and see, for anyone involved in Real Estate.