CAI-NJ August 2021

FIDUCIARY DUTY... from page 18.

cladding systems, structural deficien- cies, etc., a board does not have the expertise to make this determination on its own. Therefore, boards that take their fiduciary duty seriously will consult with the appropriate professionals. It is recommended that boards often seek the advice of an architect or engineer to help determine if a building system is in need of repair or replacement, and, if so, what an appropriate scope of work is. While an association will likely have to pay the Professional for their time, this is a worthwhile invest- ment as the association will likely get an objective, unbiased opinion on what work needs to be done and what work can be tabled for a later date. There is a chance that if an association requests this advice from an unscrupulous contractor, the recom- mended scope of work (and resultant

cost of work) could be broader than necessary. Who will do the work? After determining what the scope of work will be to repair or replace the aging infrastructure component, the next question a board following its fiduciary duty will have to answer is: who will do the work? With a scope of work in hand, boards, with the assistance of a property manager, are positioned to bid out the work. The more bids the association can solicit, the better; the scope of work should be provided to contractors during the bid process, so they will all be bidding on the same work and the board can make a straightforward, ‘apples-to-apples’ comparison when it comes time to select a contractor. Boards that comply with their fidu- ciary duty will seek appropriate con- tractors for a given work scope. For instance, although the board might be friendly with a maintenance contractor that has an existing relationship with the association and has performed punch-list repairs for the association, that contractor might not have the necessary experience to replace a complex HVAC system or exterior cladding system. Although it is com- mon for boards and property man- agers to develop relationships with vendors, fiduciaries must be careful to not let those relationships cloud the decision making process in hiring a repair/replacement contractor, espe- cially if said contractor does not have the requisite experience in doing the subject type of work. In addition, although it might increase costs, boards should strongly consid- er hiring an architect or engineer to

tion. Rather, boards should instead be analyzing the following questions: • What scope of work is necessary to correct the aging infrastructure system? • Who will do the work? • How will the association pay for the work? Scope of Work Once it is apparent that a building system is no longer functioning prop- erly, the first question a board must answer is: What needs to be done to correct the issue? Can the system be repaired, or does it need to be replaced? Often, with complex systems such as mechanical/HVAC units, exterior

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