New HOA president is a Handyman

I live in a small 20 unit condo and we have new HOA president who happens to be a handyman. Since he has been onboard he has accomplished alot, but appears to be doing some of the handyman jobs himself. Some of the things he has done that i have seen was painting after the plumber fixed a wall leak and replacing patio fences... I personally don't have a problem with this because he appears to do a good job. Things are finally being done. So he appears to be using his services as a handyman and charging the association.

Is this a conflict of interest? Again, so far his service is great and may be saving the HOA in costs with his discounted service (need to verify that it is discounted...). I just want to be aware if there is an issue with this...

Thanks for any responses...

Joe,

There have been many times I've taken a saw and cut down a branch or picked up a screwdriver and rebuilt a broken mailbox housing. I was never paid and I never expected to be paid. As a board member I just saw it as being easier and more cost effective then to call a meeting, get bids and award a contract for something I could take care of in 20 or 30 min.

Even though it might appear that he is getting paid it also might be that as a homeowner he is contributing some time to the Association to make the community better. Next time you see him doing some painting or fixing something why not ask if he needs a hand and strike up a conversation? You might make a friend and at the very least have your concerns addressed.

Tim

Kelly:

Under most documents Board members are not to be compensated for their service in their capacity as members of the Board. This does NOT cover work performed outside their role as members of the Board such as in this case.

Board members are NOT handymen and if this Presdient is doing extra work for the property IMO it would not be in violation of the non-compensation clause in most documents.

The question now would be is the President being paid?
What rate of pay per hour or per job?

Is the rest of the Board aware of this?
Have they approved this work and pay?

It is possible this person is doing work at a resonable rate both serving the property to maintain its physical elements AND perhaps saving the property money.

Not everyone acts in their own best interests there are some community minded people even in HOAs.

You will probably find out that he is saving the HOA a lot of $ by doing these small jobs around the complex. Why don't you bid them out with another hired handyman, and see.

The "conflict" is if he was CREATING jobs for himself to do in order to get paid. This does not sound like it.

I've had this conversation with my property manager because I volunteer for lots of small tasks (but no heavy machinery) but still am not clear.

First, if the board members are property owners and as such are directly invested in the HOA organization, that would make them a part owner in a sense. So, wouldn't they be working on their own property, with the risks being no different that you deciding to DIY a home project and hurting yourself?

I also think that, as a board member, I am covered under an insurance policy carried by the HOA. Outside handymen are not covered under this policy.

I see a few problems with this situation.

First, there is at least a perceived conflict of interest, where the President of the BOD is acting as a vendor or contractor to the Association. Since the BOD has a fiduciary responsibility to diligently preserve and maintain the common areas of the property, the officers of the Association need to hold to a purely objective set of standards in fulfilling those duties. Any reasonable person would question the objectivity of the Board, when the President of the Board is getting paid by the Association to perform tasks that would otherwise be hired out to outside vendors, or performed by supervised employees.

Second, in California, a contractor's license is required for any project with a cost exceeding $500 for labor and materials. A good place to go for information is the California State Contractors License Board website at http://www.cslb.ca.gov

The CSLB states that "It is illegal for an unlicensed person to perform contracting work on any project valued at $500 or more in labor and materials. Besides being illegal, unlicensed contractors lack accountability and have a high rate of involvement in construction scams. They also are unfair competition for licensed contractors who operate with bonds, insurance and other responsible business practices."

Third, there is the liability issue. What happens if an unlicensed contractor performs work that is later proven to be substandard, or leads to an accident? Who is liable if your Board president is up on a ladder, and drops an object on someone's head? What happens if your President falls off the ladder and is hurt, or worse, permanently disabled? Will your Association be liable for paying all of his medical bills? Will your Association insurance cover an unlicensed contractor? Probably not.

There is much more to be considered than "apparently" saving money in this way. I say "apparently" because after weighing the risks vs the benefits, you may be saving nothing at all.

Rob