Winning Strategies for Managing Maintenance Costs in Multi-Family Developments

Building maintenance in common interest developments can be a burdensome task, particularly in older developments.  Often it is neglected due to a lack of funding and a belief it’s not necessary.  These two reasons alone account for much of the deferred repairs and high maintenance costs most associations are currently living with.  Deferring routine maintenance only accelerates the damage and overall cost to correct.

One association has been proactive in implementing basic strategies for managing their maintenance and containing costs.  The result has been an extension of the service life of building components, while allowing their reserve funds to accumulate.  In this case, it was the concerned board members who realized they needed to take better control of their association’s funding and develop a plan to implement the needed repairs to their complex. 

Unsure where to start, the board sought the services of a construction consultant to assist in developing a short and long term maintenance repair plan that would reflect both available and projected funding.  The process began several years ago, and the benefits can be seen today as the association is currently on track and up to date with their maintenance requirements. 

At the time, the association was 27 years old, consisted of 96 units in 12 buildings with visible deterioration to the exterior siding and roof covering.  The complex was currently scheduled for repainting, and in the next three years, siding and roof replacement.  All About Homes (AAH) was contacted by the association in 2007 to discuss options for determining needed exterior repairs with the limited funding available.

According to the reserve studies, the wood siding, trim, and roof covering were due for replacement at a projected cost of $2,500,000.00.  Yet, the reserves for the siding and roof replacement were only 40% funded.  The board needed to know how much of the siding and trim required replacement now, and whether the roof covering could be repaired to last another two years.   

 Evaluate the Current Condition

A two-fold approach was employed to assess what work needed to be performed.  First, establish and document the current condition of the exterior siding, trim and roof coverings.  AAH performed a baseline evaluation inspecting the exteriors and roofs, including the detached garages.  Second, the observations were listed for each unit and grouped into three categories: 

§    1) Items needing immediate attention

§  I  2) Items that could wait another year to repair

§  I  3) Items that could be repaired during the routing maintenance of the buildings.

The results of the evaluation revealed that 40% of the siding and 30% of the trim required replacement, which was within the existing available funding.  However the evaluation also revealed unanticipated repairs to approximately 35% of the upper floor wood steps and some repair to the rear decks.  The wood roof covering, although nearing the end of its life, could be repaired to extend its serviceability.  These results gave the board a clearer picture of repair priorities. 

Review Reserve Study, Funding, and Expenses

The board then reviewed the reserve study and its finances.  Although the current reserve study was only two years old, it was discovered replacement costs were not current and square footage amounts were incorrect, rendering the report unreliable.  Wanting accurate information the board commissioned an updated reserve study. 

Based on the available funding and cash reserves, the board set preliminary budgets for the exterior repairs, and began to discuss how the work could be structured to maximize cost savings.  In order to do this, the board divided the work into three categories, exterior (siding, trim, stairs), roof, and painting.   

Determine the Scope of Work

The overall scope of repairs was extensive and involved several components of the building.  How the work was to be performed and the scheduling of the different trades had to be considered and closely monitored.  In order to minimize the uncertainties of the overall job and test the planned process it was decided to stage the job in three phases of four buildings each.  Structuring a job in phases is advantageous for both the association and the contractor.  It limits the work to a specific part of the complex, and allows for a learning curve for the unexpected.

The results of the baseline evaluation were tabulated and listed in a format contractors could use when preparing a proposal.  Guidelines were added to the list of repairs describing the association’s expectations as to how the work was to be done.  For example, it was specified that when replacing the siding proper flashing techniques (some of which were omitted during original construction) were to be employed.  The guidelines also stipulated on when partial sheets of siding and trim could be used as opposed to full pieces.    

Solicitation of Bids

In order to ensure the repairs were performed by qualified contractors, efficiently, and according to the desires of the association, a request for proposals (RFP) was drafted and sent out to roofers, painters, and general contractors.  Each contractor was met on site and walked through the job to point out the specifics of how the work was performed, the staging of the materials, and the scheduling of the various trades.  Meeting with the contractors provided feedback as to what would work best for them, where cost savings could be achieved, and give the board an opportunity to get a sense of the contractor’s potential capabilities and limitations.  As part of the bidding process unit pricing for typical but unseen common repairs was requested of each contractor.

Once the bids were received, the proposals were reviewed with the board.  The time spent developing the RFP and defined scope of work resulted in comparative bid proposals which made it easier for the board to understand the differences in pricing.  Most of the bids were within 10% of one another, eliminating the very high and very low proposals.  Once the bids were narrowed between two contractors, references were checked, and prior jobs were reviewed. 

Check References and Review Prior Work

It is critical to review a contractor’s prior work to evaluate the workmanship.  Of the two general contractors being considered, one was eliminated due to the poor overall workmanship at one of his referred complexes.  This was also true for the painting contractor.  The prior work of both roofing contractors was professional and well done.  After this process, it was evident which contractor was best suited for the repairs to the complex.

Awarding the Contract, Walk the Job.

Once the contracts were awarded, each bidding contractor was notified of the board’s decision, whether they were awarded the contract or not.  Prior to signing the contract, the job was walked again with each contractor to review interfacing with the other contractors, change orders, material storage, hours of operation, protection of the work area, and other restrictions normally associated with working in Community Interest Developments.  .

 Start on a Small Scale

Prior to starting the job, a site construction meeting was held with all contractors, delineating responsibilities and the sequencing of work.  Potential problems and concerns were addressed and resolved. 

Due to the various complexities of the overall job, it was decided to start work on just one of the four buildings to see how the job progressed and what type of issues would have to be dealt with.  The scheduling and interfacing of the contractors went well, however hidden damage was discovered during the removal stage.  The other three buildings were worked on in succession. 

In the interest of efficiency and avoiding slowdowns or work stoppages, AAH was given the authority to approve change orders up to $1,500.00.  Copies of approved change orders were transmitted to the board. 

Knowing change orders were inevitable, we established a per unit price for the siding, trim, and stairs, as well as an hourly rate for a trades person in the contract for the general contractor.  This gave the association some control in verifying if the costs of a change order were appropriate.  

Lessons Learned

The time spent at the beginning of the job closely monitoring the work resulted in large savings in time and money.  Phase 1 (four buildings) of the project took 4 months to complete, and Phase II & Phase III took three months each to complete.  The interfacing of the contractors went smoothly and after the first building, the change orders were controlled. 

Phase I also gave us an opportunity to reassess how the job was being structured.  Contingencies for hidden damages were increased to 15%, close to what the actual expenses were.  It was decided to take the responsibility for painting away from the general contractor and award it to a painting sub contractor.  The quality and execution of the painting did not meet the association’s expectations.  The general contractor and the roofing contractor were awarded contracts for Phases II & III. 

Developing relationships with the contractors, communicating expectations clearly, and weekly site reviews of the work kept the job running smoothly and on schedule.  At the completion of the project, the value of a project manager was evident.  Having a project manager on site to oversee the work and interface with the contractor allowed problems to be resolved quickly and information communicated clearly.

In terms of the total cost of the project, the siding, stair, roof replacement, and painting ended up costing 60% of the reserve estimate and the fees for the project management were approximately 5% of the total job.

Once the work was completed, the board decided to establish a bi-annual evaluation of the complex as a basis for its maintenance needs.  They reassessed the non-critical items from the original baseline evaluation and incorporated them into the annual maintenance schedule.  Within three years their annual maintenance costs were reduced by approximately half, and calls for repairs diminished to a manageable level. 

 John R. Schneider is a licensed general building contractor and certified code specialist. Since 1985, he has been president of All About Homes, Inc., an East Bay consulting company that specializes in the investigation of construction related deficiencies, project management, and the facilitation of disputes between owners, associations, and vendors. Mr. Schneider is a member of the ECHO Maintenance Panel. Questions can be directed to Mr. Schneider at, or by calling 510-537-6000

Request for Proposal (RFP)

ECHO Journal: Ask the Expert January 27, 2012

“What is a “request for proposal”? The association I belong to needs to have some roofing and siding work done, and I’ve been told that the best way to get contractors to bid the job is to provide them with a proposal request. What type of information needs to be in the document?

A “request for proposal” (commonly referred to as RFP) is a document drafted by a building owner or association that formally requests bid solicitation for material, services, construction, or repair of a building, system, or component. Commonly used when soliciting bids on larger projects, RFPs are increasingly being used by associations on smaller jobs as a tool to clarify and detail the work being desired. An RFP usually contains specific information about the services being requested, and the information necessary for a bid proposal to be considered by the association. Along with a scope of work, a RFP can ensure that contractors bidding on the job are bidding to perform the work in the same manner with the same material.

Repairs to buildings and components of a Common Interest Development are often very specific and must be done on a periodic basis with minimal impact on the residents. Although repairs to a complex may be major (siding or roof replacement) or minor (replacing light fixtures, signage), specifying the needs of the association with how the work is done and what is expected of the contractor will always lead to a better overall project.

Associations are charged with the responsibility to maintain and repair the complex and ensure that the repairs to a complex are performed by qualified contractors and properly done in an efficient manner. Creating an RFP can be a valuable tool when requesting any repairs or reconstruction. A RFP can be a simple one page document or it can be more detailed depending upon the size of the work being requested and the needs of the association. It can be drafted by the association, a construction consultant, or a project manager.

As a basic template, a RFP should have two main parts. The first part would contain a summary of the work to be performed, the general expectations of the association during the course of the project, an estimated time frame for the work to be done, a scope of work listing methods of installation and materials to be used, and any special requirements the association may have with regards to access to the units, where material may be stored, and parking of company vehicles.

The second part of the RFP should detail the submission requirements for contractors presenting proposals. Determine what information you will need from each bidding contractor to ensure that the firm is qualified and capable to do the work. Ask the contractor to describe how the work will be performed and how the contractor will address any special issues associated with the job. This section should also require contractors to state they are properly licensed and equipped to perform the work, the contact information of the company and foreman on the job, certificates of insurance for general liability, professional liability, and workers compensation.

The RFP should clearly state the date proposals are to be submitted, and the date a decision will be made to award the contract. Be sure to request a list of at least three previous jobs that closely reflect the work being anticipated Prior to selecting a bid proposal, someone from the association must inspect the properties listed as a reference to determine if the quality of the work performed meets with their satisfaction.
Sending out an RFP will inevitably trigger phone calls and questions from bidding contractors and requests for site visits to review the project. Associations should appoint one individual to handle all of the information requests and site visits to ensure each contractor sees and receives the same information. This person could be a committee member, a construction consultant, or project manager, and should be familiar with the project and the association’s needs.

It is important to remember that bidding a job takes time and manpower that a contractor normally does not charge for. Reputable contractors will not bid jobs that are poorly defined, and they are hesitant to work with associations that do not appear to be organized, do not have a single point of contact, or cannot make timely decisions. Even in these tough economic times, good contractors will be selective in who they will work for, and under what conditions. If a request for bids is not clearly stated, it will be harder for an association to determine if the bidding contractors are truly qualified and whether they are actually bidding on the same work

As a final note, when you do ask contractors to submit proposals for work, it is professional courtesy to notify each of the firms submitting proposals the outcome of the bid review. Whether a contractor is awarded a proposal or not, they have invested a lot of time in preparing the bid and they deserve to be told what the board decided. A proper notice should include the statement that the association has chosen not to accept the contractor’s proposal, and that they appreciated the time and effort the contractor spent in preparing their bid. This can be done via a letter, an email, or a simple phone call.

John R Schneider is a licensed General Building Contractor, and certified Code Specialist. Since 1985, he has been president of All About Homes, Inc., an East Bay consulting company that specializes in the investigation of construction related deficiencies, the management of projects, and the facilitation of disputes between owners, associations, and vendors. Mr. Schneider is a member of the ECHO Maintenance Panel. Questions or comments can be directed to Mr. Schneider at

The Value of Periodic Inspections for Common Interest Developments

Lessons from the field:
The Importance of Periodic Inspections and Proper Oversight of a California Common Interest Development

One of the most important challenges facing Home Owner Associations is the ability to manage and maintain the buildings and common areas in their complex while at the same time limiting their exposure to financial and legal liabilities. This article will discuss how association boards and management companies can create exposure to liability while overseeing a complex and deciding on how to ensure the maintenance, safety, and comfort of the owners.

As a construction consultant, I am often asked by home owner associations to evaluate building components for damage or safety concerns and offer suggestions for scopes of repair, and facilitate the resolution of construction related disputes. The work includes the investigation of moisture intrusion issues, building and foundation movement, drainage concerns and hazards to pedestrian traffic. The one common element of these evaluations is that most of the damage and hazards observed could have been prevented or minimized had someone made periodic inspections of the building and landscaping of a complex.

Periodically inspecting a complex is the most efficient and economical endeavor an association can undertake to minimize the cost of future repairs and liabilities. Yet, it is almost never done on a regular basis. Associations and management companies usually wait until there is “visible” evidence of potential damage or a complaint of a hazard before any action is taken. The downside to this approach is that the discovered damage usually necessitates an immediate repair that is not easily executed, and an expenditure that has not been planned for.

There is a basic assumption that the casual inspection or review of the landscaping, sprinkler system, pool area, or the exterior lighting which is often done on a monthly or quarterly basis, fulfills this need. The problem is these inspections are not in depth reviews of the complex, nor do they reflect the relationship between the multiple components of the buildings or grounds.

Properly done, thorough periodic inspections can provide valuable information on the current condition of a complex as well as the ability to identify conditions that will become problems in the near future. This process can eliminate untimely surprises and will allow associations to plan for the repair of components in an organized manner.

A recent project I was involved with concerned a 40 year old complex consisting of several buildings and mature landscaping with tall redwood trees. Prior to my evaluation of the complex, several home owners complained of cracking to the stucco exterior, and to the interior walls and ceilings of their units. These complaints were communicated to both the association and the management company over a three year period.

The management company advised the unit owners the complex was old, the cracks were due to building settlement, and that the damage was not the responsibility of the association to correct. If the home owners wanted the interior damage repaired, they would have to fix it themselves. However, over time the cracking to the exterior of the buildings became obvious and more severe and the association decided to investigate the matter.

Arriving at the site I initially walked the grounds and viewed the three buildings in question. From a distance there were no apparent signs of damage to the exterior of the buildings suggesting structural damage was occurring; the fractures in the stucco were similar to what would occur in an older building. However, as I got closer to the first building, it was evident the cracking in the stucco was more sever.

The planter areas next to the buildings were covered with ivy, and tall redwood trees shaded the buildings. Brushing away the vegetation and debris from the top of the soil near one of the buildings large roots from a nearby redwood tree could be seen traveling along the surface of the ground . These roots had extended under the building slab, cracking and lifting the concrete.

Although the roots were clearly visible on the surface of the ground near the base of the tree, no one made the observation that the roots were actually growing underneath the building slabs. It had taken years for these roots to reach the building and cause damage, yet they were never identified as a potential problem by anyone from the landscaping company, the management company, or the association board during their periodic reviews of the complex.

Given access to the interior of one of the units, I observed the damage to the walls was obvious, and extensive. Cracking was observed at the walls in the entry, living room, kitchen, and hallway. I could feel that the floor slab under the carpeting was cracked and lifting. The damage to the unit was unmistakably structural in nature, and affected the entire side of the building.

A written report documenting my observations was sent it to the management company. The report recommended that a further evaluation of the affected buildings and slabs be performed by a structural engineer to determine the true extent of the damage and what the scope of repair would entail. I also recommended that an arborist be consulted to determine what should be done with the redwood trees.

The management company’s response to the report’ was to have a landscaping company cut down two of the redwood trees closest to the damaged buildings. They deferred any further action on the matter citing the HOA’s budget restraints, and held to their belief that the responsibility for repairing the damage to the interior of the building was up to the individual homeowners to fix.

The decision not to investigate the matter further and the lack of direction from the association board in how this matter was handled, raise ethical questions regarding the fiduciary responsibilities for governing and overseeing a Common Interest Development. To understand the legal responsibilities an association has to effectively manage a complex, I spoke with Don Odell, an East Bay attorney specializing in real estate and construction law.

Mr. Odell began by stating, “Home owner associations and particularly their board of directors, face a difficult and often confusing task when dealing with member complaints of damage to individual units. Landscaping, as part of the common area in a development, is owned collectively by the members of the association and therefore falls under the Board’s wide managerial umbrella. Unfortunately, this is an area where competing interests can come into play.”

“The association, through its board of directors is responsible for the maintenance and repair of the common area owned by the association. If improvements in the common area cause damage to other parts of the common area, the association cannot be held liable for that damage unless it can be established the damage causes some appreciable harm to property or rights owned by the individual owner. In the case of the tree roots, a review of the Association’s governing documents must be made to define who owns the damaged property which would include the structure of the building and the slab it is built upon.”

“However, establishing who is responsible for correcting the damage only addresses part of the legal questions that need to be answered. The more important questions are why this condition was not identified as a potential problem at an earlier date, and whether the Board acted properly in its handling of the owner’s complaints”

Mr. Odell pointed out that had there been proper review and oversight of the landscaping and buildings, or periodic inspections of the complex, the tree roots would have been flagged as a potential issue before any damage to the building could have occurred. By allowing preventable damage to occur, the management company and the association board could be held liable for negligence.

Most association boards are made up of home owners who volunteer their time, and who do not have the specific skills to manage a Common Interest Development. Because of this, management companies are hired to assist the boards in performing their fiduciary duties. The problem with this relationship is that boards tend to assume that the role of the management company is to fully watch out for the board’s best interests, and protect them from liability exposure.

Mr. Odell addressed this fact by referring to Section 7231 of the California Corporations Code which states that the directors for homeowner associations must be diligent and perform their duties in good faith, in a manner the directors believe to be in the best interest of the corporation and with such care, including reasonable inquiry, as a ordinarily prudent person in a like position would use under similar circumstances.

“In performing that duty, the directors are entitled to rely on information, opinions, or reports prepared by consultants, management companies, or other professionals. In the example of the tree roots, the board hired a management company to manage the development. The management company, presumably with the board’s prior knowledge and consent, removed the trees but then took the position that the unit owner was responsible for fixing the damage to the interior of their units”.

“The decision by the management company to remove the trees was reasonable, and the company’s deferral of repairs to the exterior of the building and slab for budgetary reasons was also objectively reasonable. However, its position that the unit owner is responsible for the interior repairs is wrong and could subject the association to liability from the unit owners.”
Mr. Odell referred to the 1999, California Supreme Court case of Lamden v. La Jolla Shores Condominium Home Owners Association (1999) 21 Cal.4th 249, as a case where similar legal issues were considered. In Lamden, termites were found in one of the units. The association’s Board of Directors, acting on the advice of consultants, including a termite company, decided to treat the infestation locally rather than fumigate the entire building. The impacted unit owner then sued the association contending that Board’s decision not to fumigate the entire building lowered the value of her unit as it left open the prospect that termites may still be living in other areas of the building.

The Supreme Court, found in favor of the board after concluding that the directors had rational basis for their decision to spot treat the termites. The Lamden decision, when read with the applicable sections of the Corporations Code, vests the Board with the authority to manage and control the association and the common area owned by the association.

Mr. Odell went on to explain, “This basically means if the board, acts within the constraints set for it by the applicable laws and decides that even though responsible for the damages, the association will not repair them, that decision may be upheld by the court, even if that decision has a disproportion ally high impact on the unit owner. Unless the owner can show that their separate property was damaged or that the Board acted improperly, they may not be able to recover those damages from the association.”

“The unit owners in the example of the tree roots face some tough decisions. They have been damaged and need to decide if the damages are worth the time and money to try to recover, and whether or not the association is legally responsible for the repairs. It also has to be decided whether or not the board’s actions were appropriate in all regards, including the boards apparent lack of landscape maintenance, its hiring and supervising of the management company, and, finally its decision not to repair the damages.”

“The example of the invasive tree roots plainly shows the need for association boards to be involved in the oversight of the association, and their need for a clear understanding of the role and responsibilities of a management company or a vendor servicing the complex. The potential liabilities and costs of repairing damage that could have been prevented can be enormous, and the stigma of having to disclose un-repaired damage can affect the perceived value of the entire complex.”

In situations like this, there are no easy answers for who is at fault and who needs to pay for the damages. To make appropriate decisions, associations would be well advised to periodically hire independent experts to evaluate the major components of a complex and suggest options before a condition becomes a liability. They should then consult with their attorney to determine what their fiduciary obligations are to make the corrections. A few hundred or even a few thousand dollars spent when a potential problem is first discovered, may well save associations hundreds of thousands of dollars in the long run trying to fix something that could have been prevented if proper supervision had been performed.

John R Schneider is a licensed General Building Contractor, and certified Code Specialist. Since 1985, he has been president of All About Homes, Inc., an East Bay consulting company that specializes in the investigation of construction related deficiencies, the management of projects, and the facilitation of disputes between owners, associations, and vendors. Mr. Schneider is a member of the ECHO Maintenance Panel. Questions or comments can be directed to Mr. Schneider at
© 2009, by John R. Schneider, all rights reserved.

When is a Permit Required?

Ask the Expert When is a permit required?
by John R. Schneider

Q. As a new association board member, I would like to know when a contractor has to obtain a permit. We currently have to replace a sewer line damaged by tree roots, plus we’re adding some additional lighting to the common area. Some contractors have told us no permits are required, and others have said they are required, and that the association must get them. Who is right?
C. W., Hayward

The permit process is one of the most important parts of any construction process and the one often misunderstood by both home owners and contractors. Requiring permits and inspections is the only way a municipality can ensure that work to a building will meet minimum levels of health and safety. Work not done to code can compromise the safety of a structure, present significant disclosure issues when the property is sold, and may effect insurance coverage in the event of an accident or property damage resulting from the work performed. These exposures to liability are the main reasons all work should be done with permits.

The requirement for a building permit is in the 2007 California Building Code which states;
“§108.4.1 Permits. A written construction permit shall be obtained from the enforcing agency prior to the erection, construction, reconstruction, installation, moving or alteration of any building or structure.”

This applies to work done by anyone, whether a contractor, home owner or association. There are four types of permits required in residential construction; building, electrical, plumbing and mechanical permits. The instances when a permit is not required are listed in the California Building Code but it is always wise to check with the local authority. Though the work might not require a permit Section 108.4.1 continues with this admonition;
“Exemptions from permit requirements shall not be deemed to grant authorization for any work to be done in any manner in violation of other provisions of law or this code.”

A simple repair to a water line, exterior siding, or to a roof covering would usually not require a permit. However, replacing a section of damaged sewer line, re-routing a water supply line damaged by tree roots, adding additional lighting to a common area, or replacing a furnace or water heater would usually require that a permit be obtained.

A permit allows the municipality to inspect and approve of work being performed before it is covered up, and once more when the job is completed. You’d think that replacing a sewer line would be straight forward but there are several things that must be checked to ensure the work is done properly. I’ve seen many repairs where improper fittings were installed or the piping was not installed on a firm compactable base. These conditions could restrict the proper drainage of the piping or allow the piping to sag and crack when it is backfilled with dirt. Once covered over these conditions would have not been visible to anyone, and it could take months before signs of a failure were visible. Having a permit gives a municipal inspector an opportunity to inspect the work before it is covered over and concealed.

The California Business and Professions Code require licensed contractors to have permits (when required) for all work they perform, but it does not require the contractor to actually obtain the permit themselves. The property owner or the association they are working for may obtain them. Although an owner or association can obtain permits for most work performed by contractors, there are several good reasons why they should not.

When a person applies for a permit, they fill out and sign a legal document (the permit application) stating that they are either the owner-builder or contractor for the work, and assume full responsibility for the work done. This includes making sure the work meets all applicable building codes and ensuring that inspections are called for and the work is approved by the municipality.
Reputable contractors know they are responsible for obtaining permits, and they will include the costs for permits in their bids. Contractors who want the owner or association to pull the permit, or state that a permit was not necessary usually do so for one of three reasons. The contractor is not licensed, and therefore cannot obtain a permit, they don’t want to include the cost of permits in their bids to look more competitive, or they know their work would not pass inspection. Any reason not to pull a permit should be a red flag for the party paying for the work, unless the work being performed does not require it.

It should be emphasized that obtaining a permit does not mean the work is automatically approved by the Authority having jurisdiction. A contractor might obtain a permit, but never call for an inspection. At the job completion, the association is left with work that was never checked or approved by the municipality. The ultimate responsibility of ensuring the work is code complying falls on the permit holder. Don’t assume that responsibility by agreeing to take the permit out for the contractor, and be aware that obtaining a permit is only part of the permit process.

For a permit to be complete, the building department must called for a rough inspection before the work is covered up (with dirt, siding or sheetrock), and then a finial inspection to look at the finished job. If a person does not call for a rough and a final inspection, the permit will become invalid. This means that the work was never approved by the municipality. If the job extends over several months, and an inspection is not called for within 180 days of obtaining the permit or since the last inspection, the permit will be considered void, and a new permit will have to be obtained and paid for.

The cost of a permit is based on the valuation of the work being performed, which includes labor and material. Municipalities are allowed through adopted ordinances, to charge fees for services they provide. The fees charged for permits must cover the administration costs of reviewing and approving the plans, and the costs of providing the required site inspections. Over the years, cities have developed data for costs to provide permit and plan checking services for various sizes and types of projects. Typically, the cost of a permit runs about 1 ½% to 3% of the estimated cost of a project. On smaller jobs, the cost for a permit will be closer to 3% of the job, and on larger jobs, the permit cost will be much lower. On very small jobs or jobs with specific replacements such as a water heater or furnace replacement or a section of a sewer line, the permit fee will be a set price.

If you don’t know what permit or inspections are required for a certain repair or modification that the association may want to do, call or visit your local building department and ask. Be sure to inquire if there are any local ordinances or design requirements that may affect your job. Not only will they try to answer your question, they can usually supply you with printed information about specific requirements for various aspects of work and what the potential permit costs will be.

John R Schneider is a licensed General Building Contractor, and certified Code Specialist. Since 1985, he has been president of All About Homes, Inc., an East Bay consulting company that specializes in the investigation of construction related deficiencies, the management of projects, and the facilitation of disputes between owners, associations, and vendors. Mr. Schneider is a member of the ECHO Maintenance Panel. Questions or comments can be directed to Mr. Schneider at

© 2010, by John R. Schneider, all rights reserved.

Understanding Construction Terms

Scope of Work:  Every job or task has a number of processes through which it must go to reach completion.  A scope of work defines each step necessary to complete the job in a safe, compliant, and successful manner.  A scope of work is usually created in conjunction with plans and specifications..  It is the baseline document along with the terms of the contract that establishes the parameters of a job and how the work is to be performed.  A thorough scope of work will result in competitive and comparative bid proposals.

Contractor and Sub-Contractor Procurement/Bidding:  When a project is designed and a scope of work is defined, costs to perform the work must be obtained.  This is referred to a “putting a job out to bid”, and is usually done through a formal Request for Proposal (RFP).   The RFP would outline and define the general nature of the work to be performed, the license and insurance requirements of the bidding contractors, and include the scope of work.  Without an RFP and a detailed scope of work, contractors bidding a job will not necessarily be qualified and will not be bidding on the same items or amount of work.  This is the main reason bid proposals result widely varying costs.

Project Scheduling:  Once a scope of work has been established,  a schedule must be created to reflect the time it takes to complete each task to complete the project, and how each task will integrate into the flow of the job.  The project scheduling is usually devised by the contractor awarded the contract.  It will detail the start of the job, each phase of work, material delivery, inspections, and a date for completion.

Phased Construction Inspections:  Once work is started, it is advisable to have someone, preferably a third party, perform inspections at the different phases of construction to verify that work is being performed according the plans and specifications.  This becomes more important when various trades are involved, and can be valuable when determining whether a progress payment should be made.

Phased Contractor Payments:  One of the most important tenets of construction is to only pay for materials or services delivered.  Often times, contractors receive more payments than services delivered and this is when problems occur.   A payment schedule should be prepared that clearly defines when a contractor should receive a payment, and how much the payment will be.  Payments should be associated with “phases’ of the project.  For example, on a small addition, payments could be scheduled once demolition and site preparation have been completed, once the foundation is poured, once the addition has been framed, and once it has been finished.  It is always wise to withhold 10% from the final payment until a final walkthrough of the project is performed to verify it’s completion.

Permit and City Management:  Almost all work performed in the demolition, construction, or modification of a structure requires permits and approvals from the local municipality.  This requirement can be found in the state building code and local ordinances.  The reasoning is simple; there must be a means to ensure work is performed in a safe and workmanlike manner.  All licensed contractors are required to obtain permits and approvals for work requiring permits.  There are few exceptions to the need to get permits, with painting and cosmetic work being excepted.  Always consult with the local building department to verify if permits are needed when performing any type of repairs or construction.

Owner Punch List:  Owners are best served by inspecting each aspect of work, or by hiring an independent construction specialist to evaluate that the work has been done according to the plans and specifications, and in a workmanlike manner.  This should be done at each phase of work and prior to making a progress or final payment.  It’s common to find items which need to be addressed, and these items are compiled into a (punch) list.  This list is then given to the builder/contractor to fix.  Once the punch list is completed, and verified, final payment can be made.

 Final Payment Inspections:  The final payment represents not only the completion of the job and the work performed, it represents the owner’s acceptance of the work.  Once final payment is made, it can be difficult to get the contractor back to complete unfinished items or work not reflecting acceptable standards of workmanship.  At least 10% of the final payment should be withheld until it can ascertained the work is truly complete.   It is always advisable to have an independent construction professional or the designer/engineer associated with the project review the work and verify it complies with the plans, specifications, and contractual requirements.

Electrical Grounding Q&A


“I have an older home with the old style, two pronged outlets that are not grounded. I’m concerned about having my electrical system properly grounded, but I don’t really understand how a grounding system works. All I know is that it is supposed to prevent you from getting shocked. Would you tell me a little bit about it?” – R.P., San Mateo


Grounding an electrical system is more than just driving a grounding rod and connecting it to the main panel. It is a matter of providing a path of least resistance for electricity to return to its source, to prevent it from traveling back through our bodies, outlets, and appliances. To understand grounding, it is important to know how electricity works, and how it travels through a house’s electrical system.

Electricity can basically be broken down into two elements, voltage and amps. A good analogy for electricity is pressurized water in a pipe, like the water lines in your house. Water is similar to the electron flow in an electrical current. As water flows through a pipe, the electrons in an electrical current flow through a wire, or any similar conductive material. Voltage is similar to the water pressure in the pipe, and amperage is similar to the volume of water that comes out the end of the pipe. The common voltage for residential construction is 120/240 volts, and the common amperage is 100 amps.

The one golden rule about electricity is that it always wants to get back to its source. That is why electrical systems need to utilize at least two wires, a hot and a neutral. The hot wire is the one that carries the current to house, and the neutral wire is to provide a return path to the utility or source of the power. Unfortunately, this is not a completely safe system because electricity has the ability to travel through other conductive objects as well as the ground we stand on. The grounding portion of an electrical system is designed to provide a safe, alternate path for electricity to travel back to its source, without the possibility of traveling through a person or an object.

The grounding system for a house, starts at the main panel. In the main panel, there are usually two hot conductors, each 120 volts, that supply the electrical power to the panel, and there is also a neutral conductor that acts as the return path back to the utility. Since the neutral conductor is the dedicated source back to the utility, all potential paths that an electrical current can travel on, need to be connected or “bonded” to this neutral wire.

This is accomplished by connecting a “grounding wire (usually just a bare copper wire), to all of the panel boxes, outlets, appliances and metal pipes in the house, and connecting the other end to the neutral in the main panel. The interesting thing about this connection to the neutral line is that this is only done in a main panel, and not in a sub panel. In a sub panel, the neutral wires and grounding wires must be kept separate, and not connected together. This is why the neutral buss bar located in a sub panel, is isolated from the ground connections by plastic insulators.

If the neutrals and grounds are connected together in a sub panel, and there was a short to the ground, the electrical current would have the ability to travel through other circuits in the house, potentially injuring a person in another area.

Many accidents occur ever year where someone is electrocuted by touching the metal housing of an appliance, metal water line or metal furnace ducting, because an electrical current from a short, was running though it. The current in these items was just waiting for a path back to ground, and in each case, the person touching the item, provided that path. A person’s safety is the most important reason to have a properly grounded electrical system.

To properly ground an electrical outlet, you need to connect one end of a ground wire to the base of the outlet, to the green screw, and the other end to grounded surface. If your house wiring contains a grounding (bare copper) wire, it is probably attached to the metal wall box that houses the outlet. In this case, you can connect the ground wire from the outlet directly to the box. This can be done with either a special screw or clip.

If there is no grounding wire in the wiring, you must run a ground wire to another grounded surface such as the electrical sub panel, or a metal water pipe that has been connected at some point, to the grounding system. This is the only way to guarantee that there is an alternate path for electricity to flow back to its source.

Whenever you are dealing with electricity, it is always best if you consult with a competent electrical contractor. Properly grounding an electrical system is not difficult, but it can be very technical, and there are a lot of specialized fittings and hardware. If electrical work is done incorrectly, or carelessly, it will not provide the protection it should.

Aluminum Wiring Q&A


“We just inherited a 45-year old house, and shortly after we moved in we noticed that the lights would occasionally flicker on and off. Some switches were hot to the touch. I contacted an electrician to come over and inspect the wiring. He said that the problem was with the aluminum wiring used in my house. He showed me burn marks at some switches and outlets. He said that I should have the whole house rewired and that can cost thousands of dollars. My parents were the original owners, and I don’t remember them ever having a problem. How much of a concern is it to have aluminum wiring in the house?” –  D.S., San Mateo


Aluminum wiring has been used for many years in residential construction and is still being used today. Properly installed, it is as safe as copper wiring. In fact, you will probably find it (to some extent) in more than 90% of the homes, condominiums and apartments being built today.

The fears and concerns about using aluminum wiring usually dates back to the late 1960’s, because aluminum wiring got a lot of bad press. There were several cases where electrical fires had been occurring in houses built with aluminum wiring. In some homes, people would have switches and outlets getting hot when in use, and sometimes causing shocks to individuals, or starting fires.

Before the 1960’s, most homes in California were wired with copper wire. It was cheap and easy to work with. Then in the early 1960’s the price of copper had gone way up, and contractors building large housing tracts turned to using aluminum wiring as an alternative. PG&E had been using aluminum wiring for years and never had any problems.

What the contractors did not understand at the time, is that the characteristics of aluminum wiring are very different from that of copper, and that there were specific installation standards that had to be followed when using it. Investigations that followed all of these fires were able to prove that it was not the wiring that was the source of the fires, but rather the workmanship of how the wiring was installed.

Aluminum wiring is soft, has a low melting temperature, expands when heated and oxidizes easily. Because of this, aluminum requires that any connection to it be made in such a way that the wiring will not be able to loosen. This is usually done with a special crimping tool and special connectors. Copper wire on the other hand, is a little more stable and flexible than aluminum wiring, and does not require the special connectors

The secrete to living with, and using aluminum wiring, is making sure that it is properly installed with the proper connections. The National Electrical Code requires that any fitting connected to aluminum wiring be approved for use with that type of wiring. This basically means that you cannot connect an outlet, switch, fixture or fitting to aluminum wiring unless it is rated to be connected with aluminum wiring. These devices should be clearly marked with the designation “CU/AL” or “CU/ALR”. This means that the fitting is approved for use for copper (CU) and aluminum (AL). The “ALR” designation means aluminum residential.

What happened back in the 1960’s is that the installing contractors were connecting the aluminum wiring to outlets, fixtures and switches that were designed to be connected to only copper wiring. The fact that your house has aluminum wiring should not pose a safety problem if it is properly installed.

Your question seems to indicate that the problem with the wiring is at the joints or connections to the switches and outlets. This is where most of the problems occur with aluminum wiring. Because aluminum wiring expands and contracts a bit when an electrical load is running through it, it tends to heat up and loosen connections if it is not properly tightened. This usually results in a switch or an outlet being warm or hot when touched. Over the years, this overheating tends to damage outlets and switches. Merely replacing these devices will fix the problem in most cases.

To ensure the safety of your electrical system, you should have it inspected by a qualified electrician. Start by having the electrician inspect all your outlets and switches. It is possible that there is a loose connection at some other area, such as a light fixture, junction box, or sub panel. In any case, a good electrician should be able to trace down all of the problems.

Arc Fault Circuit Interrupters (AFCIs)

A new electrical safety device is now being required in the State of California, and it is called an Arc Fault Circuit Interrupter (AFCI). Since 2003, it has been required to be installed on all bedroom circuits for new construction. This device has the ability to “sense” and detect overheating and shorting of electrical wiring that could start a fire, but would not trip a standard breaker. What’s interesting is that it has taken almost ten years of research and development for this device to be required in residential construction.

In 1992, the Consumer Products Safety Commission initiated the “Home Electrical System Fires Project”, and contracted with Underwriters Laboratories to provide research and evaluations on electrical fires in homes. The research revealed that arcing and overheating of a home’s electrical wiring are associated with more than 40,000 home fires each year, that claim over 350 lives and injure more than 1,4000 individuals.

Arcing occurs when electrical wiring is nicked or damaged, or when there is a loose or poor connection. Nails from installing pictures, wood trim or cable wires can damage electrical wiring. Damage can also occur at power cords caught in doors or under furniture or rugs, plugs in outlets being pushed against by furniture, or cords that are exposed to extensive sunlight or heater vents. Loose joints and poor connections occur outlets or switches or partial breaks in the wiring. All of these conditions can cause arcing, and create high temperatures that can cause fires.

Arcing is dangerous in that it often goes undetected for extended periods of time. It usually begins where it is not easily seen, such as in an extension cord running under the carpeting, at a worn light switch or wall outlet, or at a wiring connection that is no longer tight. In a split second, arcing can create temperatures as high as 5000 degrees Fahrenheit at low current levels. Unfortunately, regular circuit breakers do not respond to signs of early arcing but are rather designed to trip when there are excessive loads and short circuits. They will not trip off when arcing and overheating of electrical wiring produces small differences in the flow of current.

AFCIs are designed to differentiate between normal and unwanted arcing conditions by continuously monitoring current flow. Normal arcing can occur when a switch is opened or a plug is pulled from a receptacle. This is not the type of arcing that usually causes fires or serious electrical concerns. However, unwanted arcing (high heat producing) takes place when conductors touch and separate, resulting in sparks and overheating. When these conditions happen, they are detected the AFCI, and it immediately trips, shutting off the power, and prevents fires from occurring.

The currently adopted edition of the 1999 National Electrical Code in California, requires all electrical outlets in bedrooms of new construction be protected with AFCIs.

Research has shown a large percentage of electrical fires and injuries occur from arcing wiring in bedrooms. Although the electrical outlets in bedrooms represent only a few of the circuits in the house, future editions of the code will require them in other areas and applications.

The good news for the consumer is, this important safety device is relatively inexpensive to install. It can easily be added to most electrical systems in existing homes to provide additional protection for older, and possibly deteriorated wiring.

There are two basic types of AFCI devices currently being used in residential construction. The first type is a circuit breaker that is installed in a main or sub electrical panel of a home. The second is an outlet that is connected directly onto the wiring of a wall outlet. AFCIs can be installed in any 15 or 20 amp branch circuit in the house. Although the installation of either device is relatively straight forward, it is best to consult with an electrical contractor to ensure the devices are properly connected.

It is important not to confuse the ACFI with ground fault circuit interrupters (GFCIs). GFCIs have been required in residential construction since the mid 1970’s. The most common type of GFCI is a circuit breaker or an outlet with the two little push buttons built into the middle of the device. They are usually installed in bathrooms, garages, and kitchens. GFCIs are designed to provide user protection from electrical shock from ground faults.

Electrical shocks from ground faults occur when an unintentional electrical path is created diverting the current to the ground. If this electrical current is allowed to travel through a person’s body, he or she could be severely shocked or electrocuted. GFCIs are not designed to react to hazardous arcing faults that can cause fires, but AFCIs are. Realizing the potential of combining these safety features, manufacturers are already designing devices that have both forms of protection built into one device.

Anyone thinking of updating or adding onto their electrical system, should seriously consider installing this valuable safety device.

Illegal Patio Covers Draws City’s Attention Q&A


“We just finished building a large patio cover in our back yard, when one of our neighbors complained about it to the city. Someone from the building department came by and said that the structure was illegal. He gave us notice that we have 30 days to either tear it down, or go through the planning and permit process to make it legal.

What gives the city the right to tell me what I can and cannot build? Since when do patio covers need permits, and why would we have to go through the planning process?” –  S.E., Pleasanton


Every municipality is required by law to have what is known as a General Plan; a detailed outline as to how it is to be developed and managed, in order to meet current and future needs. The General Plan addresses seven basic issues of how a city will be laid out, how traffic will move through the area, where parks, schools, businesses and open spaces will be located, and how such issues as noise and overcrowding will be controlled.

In order to enforce the requirements of the General Plan, a municipality adopts ordinances or laws that specifically detail what will be allowed in a particular area or zone of the city. Located in the municipal code, these “zoning regulations” are approved by the city council and reviewed and updated every five to ten years. Everyone can have input to this process, but it is usually the local planning department that oversees the development of the General Plan and controls its enforcement.

Zoning laws and city ordinances give a city the authority to determine what someone can and cannot do, to a particular piece of property. There are zoning laws that stipulate the shape, size, design, and color a building can be, where it can be located on a lot, and what type of accessory structures will be allowed.

In order to understand how these ordinances come into effect, it is important to look beyond an individual piece of property. I spoke with George Thomas, Building Official for the City of Pleasanton, who explained that when an area is first developed, the developer will meet with the city, and will negotiate what will be allowed for that particular group of homes. These agreements then become the basis for regulating what can occur in the development. “The city’s concern is the overall look of the development, how it affects roads and traffic, and how it will enhance the community. In this way, the city can preserve its character and charm, while allowing for growth and expansion,” commented George.

There are actually several different players that are involved in the planning and zoning process of any given city. Besides the city council, the planning department and the planning commission are the two most influential . The planning department is the governmental agency that oversees the enforcement of zoning. It can make suggestions and recommendations to the city council on whether zoning laws should be changed.

The planning commission on the other hand, is a group of private individuals, appointed by the city council, who can also make recommendations or changes to zoning and planning issues. If an individual wants to appeal a decision by the planning department, a hearing can be arranged with the planning commission to determine an outcome.

Zoning ordinances vary dramatically from city to city, and usually address accessory structures such as patio covers, particularly if they are over ten feet in height. From a code point of view, patio covers are considered to be roof structures that people can gather under. They must be constructed to sustain live and dead loads, and built to resist lateral movement. Patio covers have been addressed in the Uniform Building Code for over 35 years, and normally require the issuance of a building permit.

For the city to ask you to go through the planning department, I would assume that your patio cover is over ten feet in height, is not built as a conforming structure, or does not have the proper property line setbacks. Most cities require at least a five foot setback at the rear, and a three foot setback at the side property line. Violating property line setbacks can expose a property owner to liabilities in the event of the spread of fire, or damage that may occur because of the structure failing when people are near. The best way to handle this is to find out what is essential for a patio cover to be considered safe and code complying.

Home owners can protect themselves, and prevent this situation from occurring, if they check with the city building or planning department before beginning any constructing or remodeling on their homes. The staffs in these departments are more than willing to answer any questions a home owner may have regarding new construction or additions. Also, most municipalities have brochures and handouts that clearly outline what is required before a construction project is started.

Understanding Contractors Liens

Before entering into a home improvement contract or contracting for the services of a tradesperson, a homeowner is well advised to understand a powerful legal right that contractors, subcontractors, laborers, or material suppliers have to collect non-payment of services or materials supplied to a job. Under most circumstances, these individuals are allowed to file a Claim of Lien within 90 days of providing any work to a job, or the substantial completion of a project if they are not paid.

However, before a contractor can file a lien for non-payment, the contractor must “notify” the homeowner of his or her lien rights. Section 7018.5 of the California Business and Professions Code requires a contractor to provide a homeowner with a notification called a “Notice to Owner” prior to signing a contract for services to be performed. This notice states that under the “California Mechanic’s Lien Law”, any contractor, subcontractor, laborer, or material supplier who has improved real property but has not been paid for the work, has a right to place a lien on the improved property to secure payment of the monies owed to them.

The Notice to Owner is required to be in the original contract that is signed with a prime contractor. Sub contractors and material suppliers that are not directly contracted by the homeowner are required to provide them with a “Preliminary Notice” which can be sent via the mail. The Preliminary Notice provides basically the same information as the Notice to Owner, but it must be sent to the homeowner no later than 20 days after the claimant has first furnished labor, service, equipment, or materials to the jobsite.

Once a lien is filed, the claimant has 90 days to file a Lien Foreclosure Action in court. The Lien Foreclosure Action is a civil action that, if successful, could allow your property to be foreclosed and sold, with the proceeds from the sale used to pay the lien.

I spoke with Don Odell, an attorney with McNichols, Randick, O’Dea and Tooliatos, a law firm specializing in real estate and construction law. I asked his opinion of the impact that construction related liens have on the consumer. “Filing a lien on someone’s property can be a serious matter for both the contractor and the consumer.

If the contractor has not been licensed during the entire time on the job, or if the contractor does not have a legitimate reason for filing a lien, or if the contractor has not complied with the notice requirements, the contractor could be exposed to both legal and disciplinary action”, began Don.

“For a homeowner, a lien can prevent the refinance or re-conveyance of the property (subject to the lien) until the lien is settled”, Don continued. “If the contractor has recorded a lien and does not file a Lien Foreclosure Action within 90 days, the lien is unenforceable. If the contractor then fails to remove the lien, the homeowner can petition the court to have the lien removed, and may then seek recovery of the associated costs from the contractor.”

“On the other hand, if a Lien Foreclosure Action is filed by the contractor, the homeowner will have to defend against the action and may have to file a counter-claim for breach of contract in order to justify not paying the contractor in the first place.

The frustrating part about the mechanic’s lien laws is that the contractor essentially controls the matter and could delay the resolution of the lien for years. This can waste a lot of time and money for the homeowner even in the best of circumstances.”

Odell stated that although a homeowner may successfully defend against a mechanic’s lien and recover the potential attorneys’ fees and costs, fighting a mechanic’s lien is not a pleasant experience. His best practical advice for anyone in a dispute with a contractor is to make sure that you have everything documented. If you decide to withhold payment from the contractor until the work is completed, make sure you are working in good faith with the contractor to resolve your differences.

In the event that you cannot resolve your differences and wish to terminate the contractor, do so promptly and immediately record a Notice of Termination. While this will not prevent the contractor from filing a lien, recording the Notice will reduce the amount of time that the contractor has to file a lien from 90 days after the completion of the improvement, to 60 days from the date of the Notice of Termination. If the contractor is not paying attention, the reduced time frame may cause the contractor to miss the filing deadline, making the lien unenforceable.

Remember, any time that a lien is involved, the most critical supporting document you have is the contract that you signed with the contractor. Your contract will contain the agreed upon payment schedule, and a description of work to be completed, two of the most important pieces of information needed to determine the legitimacy of the claim. Your contract should also include a start and finish date, a detailed description of the work to be done, a down payment amount, a schedule of when payments are to be made and an explanation of what constitutes a completed job.

Resolving issues with liens and contracts can be a frustrating and lengthy experience for most people. Consumers need to protect themselves whenever they enter into a contract. The best way to do this is by working with a competent contractor, and having a well-written document with clearly defined terms. To assist the consumer in this matter, Don Odell has developed a six-page handout describing the various steps involved in the lien process, and what consumers can do to protect their rights.