approving a change order

Started by PatriciaL1 • 17 replies • 193 views

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PatriciaL1 (California)
Posts: 78

Posted:

Last September we approved a project to upgrade the lighting in our common area. Lights were purchased from one source (~$12,500). Contracted the electrician as a separate vendor (~$22,000). All is well. Lights finally came in. We expected the electrician to take possession of the lights, he expected us to do so. Oops. Just a misunderstanding. Electrician can and will take possession but it will be an additional ~$3000. That's okay. Not a problem. My question has only to do with the approval of this unexpected change order.

The project was supposed to begin Jan 2. The next posted Board meeting will be Jan 13. Can the Board approve this change order by email and then ratify it at the next meeting? Is this legal? Acceptable? I'm hoping we can since this is "only" a change order - the actual project was approved months ago at a formal Board meeting.

Thoughts?

KerryL1 (California)
Posts: 14,550

Posted:

Our Board has--perhaps twice over many years--approved big-ticket change orders in similar circumstances. We once met--with quorum-- at an emergency meeting. And the other time, we took action without a meeting online and ratified at the next open meeting.

In both cases there were pressing time deadlines of some sort when the Board believed ruined quick action.

CathyA3 (Ohio)
Posts: 6,299

Posted:

The contracts with the vendors should have spelled out how to handle changes and any costs associated with them.

If they did not, then you'll need to re-negotiate this one piece with the affected parties, get board approval of the cost, write up the new/modified contracts, and get them signed.

DeanJ
Posts: 1,786

Posted:

Quote:

Posted By PatriciaL1 on 12/24/2024 11:57 AM
Last September we approved a project to upgrade the lighting in our common area. Lights were purchased from one source (~$12,500). Contracted the electrician as a separate vendor (~$22,000). All is well. Lights finally came in. We expected the electrician to take possession of the lights, he expected us to do so. Oops. Just a misunderstanding. Electrician can and will take possession but it will be an additional ~$3000. That's okay. Not a problem. My question has only to do with the approval of this unexpected change order.

The project was supposed to begin Jan 2. The next posted Board meeting will be Jan 13. Can the Board approve this change order by email and then ratify it at the next meeting? Is this legal? Acceptable? I'm hoping we can since this is "only" a change order - the actual project was approved months ago at a formal Board meeting.

Thoughts?

The lights cost $12,500 and electrician wants 24% of the cost of the lighting ( $3,000 ) to accept delivery of the fixtures and transport them to the work site? You are being ripped off and need an emergency meeting to discuss this,

PatriciaL1 (California)
Posts: 78

Posted:

Or - the project costs $34,500 and the electrician wants <10% to store all 50 bollards lights safely so they won't disappear which may happen if stored on the property. Then transport them over several trips over the next 2 weeks as he needs parts and wholes for installation, paying for diesel each way. If purchased through him, or any vendor, we would have paid a minimum 15% upcharge. While I may not like the numbers, they are what they are.

The project is on hold until the entire Board has the opportunity to discuss and decide. My question is: can we have this discussion online which would be convenient over the holiday season or do we have to schedule an actual meeting for this with the minimum 3 day notice, etc.

I always understood an emergency meeting, not requiring notice was for emergency matters - fire, flood or blood. Not a change order for lighting delivery.

PatriciaL1 (California)
Posts: 78

Posted:

Yes, this one piece - the delivery and storage of the lights is the part the vendor discussed with me. He submitted a change order (a bid) for that part only. That is the piece I want to present to the Board.

We can always discuss options - renting a POD to store on site, using a homeowner's unit for storage. Each option has it's benefits (cost savings) and it's negatives (availability, liability, concern for theft).

I wanted to send the change request by email to the rest of the Board for their responses. Eventually reaching a consensus so that one way or another we can move forward.

PatriciaL1 (California)
Posts: 78

Posted:

Yes, thank you. I would like to get responses by email - approval? and then ratification? No matter what we do right now, the project will be pushed back some days. How many is determined by our next steps. If we can do this online without a meeting it just seems potentially quicker.

I guess I would have to be convinced this was an emergency to call an emergency meeting. Especially over the holidays...

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Pat
You tried to save money by splitting things up versus contracting for a completed job from planning to installation. Like going to a restaurant with your own steak and wanting them to cook it for you.

Lesson learned. Do not trying to be so cheap.

KerryL1 (California)
Posts: 14,550

Posted:

I agree with your understanding of an "emergency." Our board rationalized taking action without meeting I oe case, and calling an emergency meeting, who dos noe require 4 days notice as all other open meetings.

While I don't recall the exact details, in both cases delaying long enough to provide notice for an open meeting, was going to cost the HOA (all owners) quite a lot of funds. WE directors felt the time was of the essence and quick action benefited the entire HOA. Also, imo, that it's the holidays doesn't matter.

Some who are reading this. Patricia's issue is how to make this change order --which requires board approval-- without violating CA's open meeting act. It isn't about the cost of the change.

I beleive our Board acte. in good faith & in the best interests of our corporation by approving the change orders at an mercy meeting and , in an other case, by taking action online.

ElleN (Idaho)
Posts: 1,335

Posted:

Quote:

Posted By PatriciaL1 on 12/24/2024 11:57 AM
My question has only to do with the approval of this unexpected change order.

The project was supposed to begin Jan 2. The next posted Board meeting will be Jan 13. Can the Board approve this change order by email and then ratify it at the next meeting? Is this legal? Acceptable? I'm hoping we can since this is "only" a change order - the actual project was approved months ago at a formal Board meeting.

Thoughts?

Given the holidays and the timing, IMO this qualifies as an emergency. This means that the board can do this by email, as long as all directors consent in writing to the meeting being done by email. The (email) vote on the change order does not have to be unanimous to take effect.

See https://www.davis-stirling.com/HOME/Statutes/Civil-Code-4910

https://www.davis-stirling.com/HOME/E/Emergency-HOA-Board-Meetings

This is a judgment call. Some people are going to disagree with me and see this as a non-emergency.

PatriciaL1 (California)
Posts: 78

Posted:

Actually, we weren't trying to save money. We liked the other lights better. We asked the vendor to get them and he was not able. Not cheap at all. Which is why I am willing to spend the extra $3K to have the vendor take over now. I just need others to agree.

PatriciaL1 (California)
Posts: 78

Posted:

Kerry - Thank you. That is my feeling. I am not discussing the cost. Just want to make sure we don't violate the open meetings act. Thanks again. Patti

DeanJ
Posts: 1,786

Posted:

Quote:

Posted By PatriciaL1 on 12/24/2024 1:50 PM
Or - the project costs $34,500 and the electrician wants <10% to store all 50 bollards lights safely so they won't disappear which may happen if stored on the property. Then transport them over several trips over the next 2 weeks as he needs parts and wholes for installation, paying for diesel each way. If purchased through him, or any vendor, we would have paid a minimum 15% upcharge. While I may not like the numbers, they are what they are.

The project is on hold until the entire Board has the opportunity to discuss and decide. My question is: can we have this discussion online which would be convenient over the holiday season or do we have to schedule an actual meeting for this with the minimum 3 day notice, etc.

I always understood an emergency meeting, not requiring notice was for emergency matters - fire, flood or blood. Not a change order for lighting delivery.

Crime must be tough in CA if the labor is being stolen in advance of the work.

PatriciaL1 (California)
Posts: 78

Posted:

DeanJ. Thanks for your completely UNINFORMED opinions. I did not bother to explain the complexity of the job, the lights, locations or any other details. I regret giving you the dollar amounts. I only did that so the others would understand that this is a significant project and so therefore was not something that I was willing to approve lightly. We are not being cheap. We are not being ripped off. Nothing is being stolen. There is no crime. It is complex. And worth every penny of what has been bid. Please keep your negative and useless comments to yourself. Thank you very much.

Fortunately I got answers to my questions from others.

KerryL1 (California)
Posts: 14,550

Posted:

Dean can't seem to help himSELF, Patti.

TerriS6 (California)
Posts: 3,284

Posted:

Quote:

Yes, like Kerry said, an emergency meeting - Civil Code Section 4923. Can be called by president or any two other directors. Meeting can be held by email if all directors consent in writing. Can be held by teleconference if there's a quorum.

TerriS6 (California)
Posts: 3,284

Posted:

4923: "if there are circumstances that could not have been reasonably foreseen which require immediate attention and possible action by the board, and which of necessity make it impractical to provide notice".
It doesn't have to be a natural disaster.

KerryL1 (California)
Posts: 14,550

Posted:

Nice citation, Terri!

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