Why hire licensed Contractors ?

In a previous thread, a member of this forum offered the following comment:


For the record, I am a member of my Associations Board, serving as it's President. I am not personally, nor is the Association, a member of the CAI. However, I strongly believe that the Association needs to protect itself from possible litigation by using simple common sense. This common sense includes hiring licenses contractors.

The reason for having a licensed contractor, can be better demonstrated with the following scenario:

HOA owns a snow blower that is available for members to use as needed. A resident checks out the snow blower and in the process of using it throws a rock through your window, which also strikes your child causing injuries. You now have a broken window and medical bills to pay for. Who should pay - The resident who used the snow blower or the Association who allowed them to use it? Either way, you just want to reimbursed for the damages so you file legal action (costing you more money)against both of them. The resident tries to protect himself by filing legal action against the Association saying that they should have never allowed him to use the equipment without proper training. This causes additional legal expenses for the Association. Before the court even hears the case the Association now passes a special assessment to pay the legal bills. You - who suffered the actual damages, are still responsible (as a member of the Association) for your share of that special assessment. Now you are out even more money and you still haven't even had the case heard.

All of the above could have been adverted if the Board had simply hired a contractor who was properly licensed. Typically, for someone to be licensed they are required to be insured but this should also be checked by the Board prior to awarding a contract.

All of the above is the reason why our Board turned down the suggestion at our annual meeting of purchasing a snow blower for residents to use. In this economy I could have even taken the above scenario further:

The owner who incurred the damages believed that they shouldn't have to pay for the special assessment since they were the one's who suffered damages and were already out of pocket for the broken window, medical bills and hiring the lawyer to sue the association. They decide not to pay the Assessment. The Association, not receiving payment for the special assessment starts foreclosure proceedings on the home.

I know a little far fetched, but it legally could happen. This is why, in my opinion, the Board should only hire licensed and insured contractors to perform the work.

As the person I quoted said, does it really take a licensed contractor to change a light bulb or blow leaves from the sidewalk? The answer would be no. I will admit that I have gone out and cut a dead limb or two from a tree. However, I never took payment for it. I did the work as a neighbor and not as a member of the Board. However, if something did happen - since the Board didn't hire me to do the work, it's possible that I could be in a world of hurt (legally speaking) personally. I fully understood this.

The point is, if something happens to the individual changing the bulb (perhaps falling off the ladder) or to personal property (a rock is picked up by the leaf blower and breaks a window), someone would be legally responsible for the damages. The question of whom would be decided by a judge in a court of law. The Boards responsibility is to minimize this risk - thereby protecting the membership.

Tim

Jon,

Good points.

It is my understanding that acquiring a license includes the process of proving to the State that you also carry insurance. I could easily be wrong in this (as I have not done the research to verify).

I agree, that if there are separate requirements for your State, the need for the contractor to have insurance is primary.

I believe that the best advise is that Associations understand the risks and then use common sense along with this understanding to make an informed and intelligent decision.

And waht if the Board memebrs lack common sense?

It would be nice if common sense were available for purchase somewhere perhaps in a gel or cream, as most people I know lack it. But that nevers prevents thme from thinking they know it ALL!

As members of any Board you would hope some if not all members could use common sense in serving the property in the best way possible.

Not sure about other parts of the country but we have many contractors who lack a license in some areas but do carry insurnace.

Tim one of the first things I did as a President was to divest our HOA of all sorts of equipment from old portable phones and obsolete Xerox copiers. This saved some money. A notice in the newsletter of a coming auction closed to Board members and poof the stuff was gone and money went into our Treasury. Where this is relevant is your snow blower example. Why does the Board own that? It eats storage space money, requires maintenance and was expensive to purchase. Point is the less equipment an HOA owns, the lower the liabilities and year round costs.

That said we contract with licensed firms to the greatest degree possible. VA DPOR's website can usually confirm the existence of the license. In VA your two biggest headaches are mowing/parking lot trash and snow removal. Experience dictates to us that little Johnny down the street whose dad owns a lawn mower is not the best recipient of a mowing contract no matter how little he charges. The same holds true for him as a teenager who puts a plow blade on his pickup truck. Avoid him. In our Association we ran an ad in the newspaper for both services soliciting bids. A Board member was designated as a POC and she toured the area with the repliers (not coming to look and just sending in a bid was a quick disqualifier to us) and told them where to send their contract bids. Later on the entire Board reviewed the bids which ranged from being written in crayon on scrap paper (I kid you not) to half inch word processed volumes full of legalese. They selected three then we speaker phone called the people and asked questions. The one with a fair price who gave us all a warm fuzzy feeling was chosen for an annual renewable (requires Board vote) contract and life has been good. Similar steps resulted in the issuance of snow removal contracts with construction firms in June and July in advance of the snow. We also last year identified those members with Bobcat experience and rented a Bobcat for 40 hours and used those volunteers to supplement the contracted company.