Newer HOA’s—Know Your CCR’s

By Kathi J. Smith, Esq.

Common interest developments built after 2003 have the most up-to-date floorplans and modern amenities, which is why owners love them. These new construction homes also have a clock ticking on remedying any construction defects they may have. When the development is ten years old, the clock runs out, and the builder cannot be held liable for construction defects in the homes or common areas. Don’t fumble the chance to place responsibility where it belongs.

These younger communities probably have Amended and Restated CCR’s covering their relationship with the builder. These HOA boards should familiarize themselves with the CCR procedure for asserting a construction defect claim. Don’t be surprised if it is very complicated. Newer CCR’s may have several required steps, including allowing the builder an opportunity to repair the defects, and required Alternate Dispute Resolution instead of a lawsuit. These steps can trip up unwary HOA’s, and allow the builder an end run around its duties.

Now is the time to retain a professional to perform a comprehensive inspection of the development, to determine whether there are construction defects that need to be addressed with the builder before the clock runs out. Also, review all owner complaints. When your ten year clock expires, there is no overtime period. And that’s a call you can’t challenge by throwing a red flag on the field. The referee can’t change the call.

Contact Schneiders & Associates, L.L.P. to schedule a comprehensive review of your HOA’s CC&Rs and other governing documents as well as to assist your HOA in obtaining a inspection report of your development.