Condo Media - June 2014 - 18

by Frank A. Lombardi, Esq.

C A I

R e g i o n a l

N e w s

RHODE ISLAND

Energy-Saving Contracts for Condos
Be Mindful of Legal Ramiﬁcations

W

hen a condo board member
or manager calls and asks
me to review an energysaving product or program,
I don't need to look far or wide to
spot some legal issues. Let's take my
most common energy-savings program
scenario. An engineering firm comes in
and proposes to install energy-efficient
light bulbs on the common elements
and in the units.
The legal issue is simple. Regarding the common elements, the board
can go through the normal contract
process. For example, it should ensure
that the contractor has the appropriate insurance coverage and names the
association as an additional insured.
Terms should be reviewed, including
a search for any hidden fees and the
like, hours of work, etc. If the bulbs are
going in the unit, then it would be the
unit owner's obligation to follow the
same contractual review process as the
association.
From there, it gets a little more
complicated. Now let's say the energysavings company proposes to insulate
the unit owners' attics and to install
roof vents. I am told that when an attic
is sealed to prevent the interior heat
energy from escaping outside and the
outside cold air to penetrate in, then
the attic could "sweat," which I believe
would be the accumulation of moisture
- never a good thing in a darkened,
closed-in wooden space. Accordingly,
the vent would be needed to circulate
air to prevent the sweating. This raises
a number of issues.

Three Issues

First, most attics are either common
areas or limited common areas. The
18

Condo Media * June 2014

roofs are most likely common
areas as well. Generally,
most condominium-governing documents direct
that any maintenance,
repair, replacement, or
improvement of common areas and limited
common areas shall be
done by the association
or under its direction, supervision, and
control. Accordingly,
energy contractors and
the unit owners they
seek to serve should be
mindful of keeping the
condominium's board
and by extension, its
property manager, in
the loop.
Second, the board
must either do the
work by its own contractors
or have the unit owner contract to have the work done
by its contractors. But be sure
that those unit owners agree
to indemnify and hold harmless the association for problems
or claims that may arise regarding the
work. Again, of course, any contractor
must be appropriately insured. It is also
critical to ensure that the unit owner
acknowledges in writing that he or she
will be ultimately responsible for the
work done by the energy contractor.
Third, if any other collateral issues
arise while the work is being done, the
unit owner must agree to contact the
board to ensure that it is made aware
of the defects or issues before moving
forward. To that point, I had a client
association call with an issue - appar-

ently the unit owner was
given permission to install new energy-efficient
windows on her own.
When her contractor
took the windows out,
he spotted wood rot in
the exterior wall, which
was a common element.
Rather than contact the
board for permission to
fix the wood rot at great
cost, the unit owner gave
the go ahead to do the
work. When she demanded reimbursement for
the work, I advised the
board that while ultimately it must pay the
cost of the common
element repair, I suggested that it conduct
a covenant enforcement
hearing with the unit owner
at which time it could seek
either a fine or reimbursement
for its additional expenses.
For example, in Rhode Island
especially, there could be wide
variation in prices for work done
on an individual unit basis versus on a
volume basis. The association may have
established contacts with contractors
and would have received the benefit
of a volume discount. Or, perhaps the
association has an on-site handyman
to do this type of work. By doing the
work himself, the unit owner deprived
the association of an opportunity to
minimize its costs. Also, suppose the
work on the exterior wall was poorly
done? The association was not given a
chance to inspect the work. Granted,
it may be difficult to quantify the dam-
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