Effective Communication During a Construction Defect Claim in the New Normal
By Ritchie Lipson, Esq. and Scott Thomson, Esq
This article first appeared in The Communicator, Spring 2021. To read more, click here.
Effective communication within a homeowners association is always important. Once an association brings a construction defect action against the builder, communication and cooperation among the board, community association manager, and the construction defect attorney become essential. However, with the outbreak of COVID-19, communication and cooperation regarding construction defects will most likely remain permanently changed.
A construction defect action by a homeowners’ association usually begins with a Notice of Commencement of Legal Proceedings under the Calderon Act (Civil Code § 6000 et seq.), which concurrently meets the need for a Notice of the Claim pursuant to SB800. However, before the attorney may prepare such notice, he or she must investigate the defects in the community and discuss the identified defects with the board and the community manager. This conversation is the key to defining the scope of the action desired by the association. Sometimes, associations are concerned only about a few key issues. Other times, the association has a plethora of concerns about the construction of its community and wishes to pursue all issues completely. The attorney, board members, and manager should discuss these issues and the scope before the attorney prepares and serves the requisite notice on the builder.
After the notice is served, California provides for certain statutory timeframes in which the builder can investigate the claimed defects, provide construction documents to the association, perhaps perform repairs, and for the parties to mediate the dispute. During this time period, the builder will generally want to visually inspect and photograph the claimed defects. Seeing unknown people walking through the community and photographing various areas can be alarming for some residents. Thus, the construction defect attorney will develop an inspection schedule for the community and send out a representative from the attorney’s office to guide and monitor the builder’s investigators. The attorney will share the schedule with the board and manager, who can provide feedback on the schedule and share the schedule with any concerned residents. Good communications with the manager, board, and members is essential at this point.
With today’s "new normal" it is important to develop a detailed COVID-19 compliant inspection program that all experts, those for both the HOA and the defense, are required to follow. This protocol should be communicated to owners so that they feel safe from increased exposure, while at the same time keeping the claim moving forward.
After the inspections, the builder’s attorney may provide some feedback to the association’s attorney. They may also reveal how the builder views the case. The association’s attorney will then share this information privately with the board and manager to develop the best strategy for addressing the defects at mediation, which is part of the Calderon Act.
Calderon mediation generally occurs near the end of the 180-day window, after the parties have completed some inspections and consulted with experts. Although not required, board members may attend the mediation as the association’s elected representatives. At the mediation, the construction defect attorney will provide periodic updates to the board members as to the status and progress of negotiations as advised by the mediator. If the mediation is successful, the attorney will provide an update and recommendation to the board as to a proposed settlement and will provide further information or answers to questions that board members may have. If the mediation is not successful, the attorney will provide a recommendation on how to proceed. This recommendation will include the filing of an action in Superior Court or binding arbitration. Again, effective and proactive communication between the attorney and the association client is crucial at this point in the claim.
Throughout this process, the construction defect attorney, board members, and community manager must remain in regular, consistent communication to best facilitate the association’s construction defect action on behalf of all members of the community.
The diligent attorney will use a combination of methods to keep the board and manager informed and will develop a communications plan at the beginning of the legal relationship. Common methods are weekly or monthly updates sent via email to the manager and board members, regular attendance at board meetings (both in executive and regular sessions, as appropriate), and frequent written updates suitable for sharing with all members during key periods in the process.
We have now become comfortable with how to handle meetings via Zoom or some other delivery service, and this type of online setting allows boards and owners to ask questions and participate from their own homes without any additional risks of exposure to the coronavirus. It has also been our experience that attendance has improved with online meetings versus the in-person meetings we conducted pre-pandemic.
Ritchie Lipson, Esq. is director of client relations for Kasdan Turner Thomson Booth LLP, which has recovered in excess of 1.2 billion dollars for its clients. For the past 20 years, he has worked with commercial investors, municipalities, school districts, homeowner associations, and residential property owners to assist in the fair resolution of their claims for defective construction. Scott J. Thomson, Esq. is the managing partner in Northern California for Kasdan Turner Thomson Booth LLP. For the past 15 years, he has worked with commercial owners, school districts, homeowner associations, as wells as residential property owners, resolving and litigating their claims for defective construction.