Unless the governing documents say otherwise, nothing formally requires a homeowners association to formally draft a plan for a possible catastrophic event. That said, association boards and managers really should “expect the unexpected” when it comes to unexpected adverse events like fires, earthquakes, and flooding. Whether it’s the worst natural disaster since the BP oil spill (the recent gas leak in Porter Ranch), or something unfortunately more common in California like mudslides or wildfires, disasters strike indiscriminately at any time. What should association boards in advance do to prepare themselves for any not-so-pleasant surprises in the future? For that matter, what should be done during and after one of these episodes happen?
The Role of the Board Member in Planning for Disaster: Before, During, and After the Event
Legendary basketball coach John Wooden used to teach that “failing to prepare is preparing to fail.” Truer words were never spoken. Before the unexpected happens, board members should spend quality time preparing for what could happen, and developing a quality disaster plan is a great way to start.
A good disaster plan will clearly communicate to association members its purpose, expectations, and processes. Such a plan should be implemented into the governance of any association, even if not required by the CC&Rs.
Ideally, the plan should be manageable, clearly stated and communicated to the membership - in writing as well as online. The responsibilities of each board member should be defined and the effective date of the plan provided so that each member understand his or her role. If the plan is too complex or difficult to understand, it serves no functional purpose. Ultimately, the plan should be adopted by board resolution.
The plan will necessarily include instructions for keeping important business records (or at least copies) handy and available. Insurance policies, vendor contracts, board resolutions, building plans and specifications, and other important financial documents should be kept in a separate and safe location, like the “cloud.” Any disaster plan distributed to the association membership should contain, evacuation routes, emergency phone numbers and a list of important government agencies. By ensuring the community is informed about federal, state and local agencies who can provide assistance in times of need, the community will be ready to grasp for any and all available lifelines available.
Another “Woodenism” applies to any board members response during an emergency event – “Be quick, but don’t hurry.” A quick, calm response by the board while some unforeseen event is taking place will benefit the association in droves. Something as simple as having extra emergency supplies available (for example, extra blankets, first aid kits, flashlights, portable generator) in storage for those in need makes a difference. Any such collection of supplies should be itemized in the disaster plan. Safety is, of course, the highest priority; however, board members should also consider that wherever possible, limiting or “mitigating” the damage from a catastrophic event will not only benefit the community as a whole, but also limit potential liability down the road for the association. Anything that can reasonably be done to minimize damage should be done, even if it’s simply shutting windows and doors and covering belongings as the relocated Porter Ranch residents have done.
After the event has taken place, restoring normalcy to the community requires focus and determination. When safe to do so, boards should assess and document any immediate damage to the common areas and building improvements for insurance claims, and set up temporary shelters onsite if as necessary. Security policies must be revisited and enforced, as post disaster conditions often inspire theft, looters, and other criminal activity.
From a legal standpoint, certain responsibilities come with a position on the board of directors that cannot be ignored, even in a crisis situation. Board members have a duty of loyalty and must protect the assets of the association, whether under challenging circumstances or otherwise. Unfortunately, this means ensuring that assessments are enforced during what could be difficult times for many. Additionally, the California Civil Code provides alternative avenues for associations that encounter unforeseen expenses. Civil Code Secs. 5610 and 5615 grants boards the authority to impose a special assessment to repair or maintain a common interest development in an emergency situation with proper notice. As well, Civil Code Sec. 5515 allows associations to transfer money from reserve accounts to operating accounts to meet short-term cashflow requirements, again with proper notice provided to the membership explaining the reasons for needing the transfer, options for repayment, and whether a special assessment will be considered.
The Role of the Community Manager
While association boards have their hands full in emergency situations, property managers also have an important role is preparing for a disaster. Managers should work with their boards of directors to encourage preparation through preventative maintenance and periodic evaluation of common area components. For example, the threat of recent El Nino rains should spur the clearing of gutters and drains, inspection of roofs, and inspection of retaining walls. With the drought comes the threat of summer fires, and clearing away dead flora and dry brush early in the year should be a priority.
Managers may also assist with drafting clearly written disclosures for the membership regarding the disaster plan, availability of emergency supplies and resources. Keeping a list of particular vendors ready with emergency contact information, like 24 hour flood restoration contractors, locksmiths, etc. will pay dividends in the event this information is needed quickly. Finally, the association’s insurance coverage should be reviewed, up to date and completed. If the disaster plan creates new responsibilities for board members, additional coverage may be required. It also doesn’t hurt to consider if there is adequate coverage for damage from fire, flood, and mudslides. When in doubt, managers should arrange a meeting with an insurance professional.
As difficult as managing a disaster situation can be, the fact remains that no one wants to end up in court as a result of a catastrophic occurrence. Avoiding liability should be the goal of every association board. Here are some final tips to help boards dodge the courtroom and protect association property:
1. Keep things simple. Trying to do too much as volunteer board members raises expectations and invites lawsuits. Only promise in writing what can reasonably be expected to occur, and follow through.
2. Rely on professionals/consultants’ advice. The disaster plan should be reviewed by a professional with experience in disaster planning. The business judgment rule will protect
3. Join a local specialty organization that will train in disaster preparedness, or attend seminars provided by local authorities. The American Red Cross, FEMA, and local fire and police department officials can provide valuable information on how to avoid sticky situations.
4. Be pro-active. Keep up with basic maintenance schedule and property checks to avoid a potential negligence claim down the road.
If you think you have potential construction defects, contact Burdman & Ward for a free, no obligation inspection with a licensed contractor.
Burdman Law Group
This material is for informational purposes only, and is not legal advice. For specific legal advice concerning a particular fact situation, please consult an attorney.