CAI-NJ Aug.2016

A U G U S T , 2 0 1 6

“Transition”

is the due diligence process required

by the board members’ fiduciary

duty. In sum, the homeowner-elected board members must deter-

mine if the sponsor did what it was supposed to do and, if not, take

action to get the deficiencies corrected. Upon assuming board

control homeowner-elected board members must:

1) evaluate the association’s physical and financial condition;

2) communicate the findings to the members and the sponsor;

3) negotiate for repairs, money or a combination of repairs

and money.

Evaluate.

Due diligence begins with evaluating the

association’s physical and financial conditions. These eval-

uations must be undertaken promptly. Delay may result in

losing some or all claims due to expiration of warranties,

statutes of limitation and/or the statute of repose.

Engineers, architects, accountants and other experts

are enlisted by the board and the association’s

attorney to ferret out deficiencies and “con-

nect the dots”. “Connecting the dots”

requires experts to:

1) Identify the duty – statutes,

architectural drawings and speci-

fications, building codes, industry

standards, manufacturer’s specifica-

tions, etc.;

2) Specify how the duty was breached–

for example, required building wrap was not

installed;

3) Specify the damage – for example, moisture got behind the siding

and was not shed down and out; instead the moisture damaged the substrate

and structural members;

4) Specify how the breach caused the damage – for example, if the required

building wrap had been properly installed, water that got behind the siding would

have been shed down and out of the building envelope without damage to the

substrate and structural members. Instead, the water was absorbed by the substrate

TRANSITION:

Evaluate, Communicate & Negotiate

but…should we litigate?

By Fran McGovern, Esq.

McGovern Legal Services, LLC

CONT I NU E S ON PAGE 16