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posted: 7/14/2012 6:51 AM

Condo Talk: Board should draft a water leak policy

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Q. An owner recently called the board, complaining of water leaking into his unit. The association hired a plumber, who inspected the unit, repaired a leaking p-trap under a bathroom sink, and sent the association a hefty bill. The association sent the plumber's bill to the unit owner. The owner said he thought the association was paying for the plumber, and he could have found a cheaper plumber. After contentious discussions, the association and owner of the unit with the leaking p-trap agreed to split the bill. The association knows the owner of the leaking pipe was responsible for the plumber's charges. Is there anything the association can do to avoid these disputes with owners over emergency plumber's bills in the future?

A. It's always amazing when an owner calls the board in a panic to make an emergency repair that turns out to be an owner responsibility; but in the calm aftermath the owner refuses to pay or complains the cost is too high. The policy should provide that the association will retain a plumber to investigate the source of the water leak and make the repair if they can. The policy should provide that if the investigation reveals that the source of the water leak is a common element, the association will pay the cost of the investigation and repair. However, it should also provide that if the investigation reveals that the source of the water leak is a component of the unit, the owner will pay the cost of the investigation and repair. This will limit these disputes.

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Q. Our association enters into any number of contracts each year with many contractors. The contractor typically provides the board with its one or two page proposal that the board agrees to and signs. From time to time, we have problems with the performance by contractors; yet the association seems to have little recourse under the contracts. What are we doing wrong?

A. This is an all too common problem in associations, regardless of the amount of the contract. The relatively small amount the association would pay to have counsel review and revise a proposed contract is worth the thousands of dollars the association may spend to battle a contractor over an issue that should have been addressed in the contract. Detailed specifications, start dates and completion deadlines, contractor insurance requirements, delivery of lien waivers, termination in the case of a breach, a warranty, and recovery of attorney's fees by the association are among the important issues that need to be included in any contract, regardless of the amount, and are often absent in proposals submitted by contractors. Unfortunately, many associations simply rely on a board member or the property manager to review proposals; neither is a substitute for review by counsel.

Q. The economy has slowed sales of units by the developer of our condominium association. The declaration was recorded almost four years ago, and about 60% of the units have been sold. The owners want to have control of the association. Isn't there a deadline by which the developer needs to turnover control to the owners?

A. The developer was to have turned over control of the association to the owners already. The election of the first unit owner board of managers must be held no later than 60 days after the earlier of conveyance of 75% of the units or 3 years after recording of the declaration. There is a procedure the owners can use if, as here, the developer does not call a meeting to elect the initial board. The owners with 20% of the ownership of the common elements can call a meeting by filing a petition for such a meeting with the developer. The owners can then send notice of the meeting to all owners and hold the meeting. Note too that the developer is required to provide any owner the names, addresses, and weighted vote of each owner entitled to vote, within 3 business days of the request. So, there is a means for the owners to determine who to obtain signatures from for the petition and who to send notice of the meeting.

• David M. Bendoff is an attorney with Kovitz Shifrin Nesbit in Buffalo Grove. Send questions for the column to him at CondoTalk@ksnlaw.com. The firm provides legal service to condominium, townhouse, homeowner associations and housing cooperatives. This column is not a substitute for consultation with legal counsel.

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