CAI-NJ Aug.2016

TRANSITION... from page 15.

and structural members resulting in rot and mold growth. After “connecting the dots”, the association’s experts should carefully determine how much it will cost the association to fix the various physical and financial defects. This “cost to cure” report provides the board with a basis for prioritizing the deficiencies and evaluating how much the asso- ciation should spend on attempting to compel the sponsor and others to remedy particular deficiencies. Without reputable experts solidly connecting the dots and determining the cost to cure, the association has little prospect of transition success. Assuming the experts connect the dots and accurately estimate the cost to cure, the board, its experts and counsel must finally evaluate the prob- ability of recovery. Is there an indi- vidual or entity that has the resources to cure the deficiencies or pay the association so that it may cure the deficiencies. Is it the sponsor? Is it the sub-contractors? Is it one or more insurance companies? Typically tran- sition is resolved with contributions by all of these but, if there is little or no prospect of recovery, the association should carefully consider other options such as self-funding repairs, obtain- ing a bank loan to fund repairs or phasing repairs over time while using “Band-Aid” fixes in the meantime. Communicate. Many boards are reluctant to communicate expert findings to the membership. This is a mistake. Everyone hopes that the transition process will be smooth and

CONT I NU E S ON PAGE 18

16

A U G U S T , 2 0 1 6