Articles Posted in Construction Issues

Blog post/article by David Swedelson, Senior Partner SwedelsonGottlieb, Condo Lawyer and HOA Attorney

The Daily Journal reports that Los Angeles County Superior Court Judge Madden recently ruled on the monthly fee that owners at Marina Pacifica Homeowners Association (located in Long Beach, California) paid to a developer. The Judge found that the fee constituted a “transfer fee” that was a violation of California Civil Code sections 1098 and 1098.5.

California Civil Code sections 1098 and 1098.5 took effect on January 1, 2009, eliminating real property “transfer fees,” particularly targeting fees written into the recorded CC&Rs at some California community associations. These fees are not the fees charged by an association or its managing agent for providing documents and other information as part of Civil Code Section 1368; these transfer fees were typically being paid to the original developer. Since the legislation’s enactment in 2009, we have not seen any court cases, at least until now.
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The California Contractors State License Board (CSLB) recently issued a news release regarding their recent sting operation, which caught several unlicensed contractors attempting to perform work for more than $500. Unlicensed contractors tend to prey on senior communities such as the Sun City retirement community, which assisted with the sting operation. Boards of directors and managers of senior communities should be especially vigilant and ensure due diligence is performed when hiring contractors. See the news release for a list of important tips and red flags when hiring contractors.

Check contractors’ status with the CSLB here.

By David C. Swedelson, SwedelsonGottlieb

Effective January 1, 2011, California law imposes new requirements and notice procedures for contractors who are serving and recording mechanic’s liens. California Civil Code § 3084(a)(6)-(7) now mandates that a valid mechanic’s lien must contain the following information in addition to what the law currently prescribes:

• Particular language in 10-point boldface type entitled “Notice of Mechanic’s Lien” as set forth precisely in the statute, and

By Sandra L. Gottlieb, Esq. and Stephanie Rohde, Esq.

Now that the rainy season is soon upon us, many associations have been scrambling to get their association roofs repaired or replaced to avoid water intrusion issues (leaks). In every roofing contract that we have prepared or reviewed, the most important issue is the warranty.

A roofing contract should include two types of warranties, the manufacturer’s warranty and the roofing contractor’s warranty. Typically, the manufacturer’s warranty will cover a long period of time (10-20 years), and may include materials and possibly workmanship, but generally excludes “incidental and consequential damages.” This means if something goes wrong (and the new roof leaks), the manufacturer will cover the work that was performed under the contract (i.e., it will pay to replace the roof, but not the cost of labor) but will not do anything about the resulting damage from the leaks, like the damaged ceiling, walls, furniture, carpet, etc. This is an especially important consideration and issue in a roofing contract, where poor workmanship can result in extensive water damage and/or mold intrusion throughout both the common area and individual units. And in our experience, workmanship is usually the source of the leaks, not the material.
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Where a homeowner paid an unlicensed contractor for landscaping work at his home, his knowledge that the contractor was not licensed when work commenced did not bar an action for full reimbursement under Business and Professions Code Sec. 7031(b), and the homeowner was entitled to recover the total amount paid even though the contractor was licensed during a portion of the work. The homeowner was also entitled to recover payments for materials retained by him, in addition to payments for labor.

This applies to California Community Associations who hire contractors and then find out they are not licensed. This may sound unfair, but the penalty is designed to discourage unlicensed contractors from performing contracting work.

Click here for the full text of the Alatriste v. Cesar’s Exterior Designs, Inc. case recently decided by the California Court of Appeal.