This is part 12 of Randy Sawyer’s 16 Part series on UCIOA. You can read previous posts here.

Section 88, subsection (b)

88(b) – If the committee authorized in subsection a. of this section is established and there has been substantial completion of the common elements and public improvements in any phase of the common interest community which are not covered by the performance or maintenance guarantees posted with any governmental agencies having jurisdiction, the committee shall, at the declarant’s request, cause such common elements and improvements to be inspected and evaluated for compliance with the declarant’s warranty and construction obligations, with the assistance of qualified independent engineering and legal consultants selected by the committee. The fees for such consultants shall be paid from funds contributed at closing for such purposes by unit owners other than the declarant or by regular or special common expense assessments, or by both; provided, however, that the declarant shall have the option to supplement such funds to the extent that it deems appropriate.

The language of subsection (b) of Section 88 has a number of glaring problems. They are discussed separately below:
If the committee authorized in subsection a. of this section is established and there has been substantial completion of the common elements and public improvements in any phase of the common interest community . . . .

The phrase “substantial completion” is not defined. What is substantial completion? Typically, when dealing with a completed residential structure the date of substantial completion is measured from the date that the governing municipality issues a certificate of occupancy for the structure. Here, UCIOA gives the developer the power to force inspections over each common elements as it is constructed, such as roofs, sidewalks, siding, etc. How, then, will the date of “substantial completion” be determined? The statute offers no guidance.
If the committee authorized in subsection a. of this section is established and there has been substantial completion of the common elements and public improvements in any phase of the common interest community . . . .

The language “in any phase” in this section apparently gives the developer the ability to force the process of inspections and mediations over common elements throughout a condominium project as each one is completed. This means that the developer, presumably, has the ability to force a small number of independent unit owners to go through the expense and burden of this inspection, mediation and arbitration process, multiple times as each of numerous common elements within the project are completed. The burden on the unit owners, and the pressure to resolve each common element matter quickly as new ones arise, will be tremendous. This appears intentional from the statute.
. . . the committee shall, at the declarant’s request, cause such common elements and improvements to be inspected and evaluated for compliance with the declarant’s warranty and construction obligations, with the assistance of qualified independent engineering and legal consultants selected by the committee. The fees for such consultants shall be paid from funds contributed at closing for such purposes by unit owners other than the declarant or by regular or special common expense assessments, or by both . . . .

This provision provides that the independent unit owners have to pay for the engineers necessary to
conduct inspections of common elements when “requested” by the developer. The problem is there may only be
a few unit owners within the condominium development at the time the developer makes its “request.” That is a
significant financial burden to be placed upon a small number of unit owners who just moved into the
development. The unit owners will have no choice, however, because the institution of the process is controlled
by the developer. The practical result of this provision is that the unit owners will be forced to either hire less
expensive, less qualified engineers and inspectors, or simply cave in and accept whatever the developer if willing
to offer.
The fees for such consultants shall be paid from funds contributed at closing for such purposes by unit owners other than the declarant or by regular or special common expense assessments, or by both; provided, however, that the declarant shall have the option to supplement such funds to the extent that it deems appropriate.

This provision is outrageous. It gives the developer the authority to pay for the engineers or inspectors
hired by the independent unit owners to inspect the common elements. That means that the developer will have
an influence over the choice of engineer or inspector that is used and the outcome of the inspections. This is a
significant conflict of interest. And, since the developer has the ability under this provision to force these
inspections when there are only a few independent unit owners in the development, the unit owners will almost
always be amenable to allowing the developer to pay for the inspections. Again, this is improper influence by
the developer over the outcome of the inspections.