Waiver of liability

Started by KathyS • 9 replies • 2845 views

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KathyS (California)
Posts: 145

Posted:

We have many licensed professional homeowners that are willing to take over the landcaping, pool operation and maintainance, litter pickup and other needs of the association. All are willing to provide the services for free in order to bring our costs down and keep our assessments low.
They are all willing to sign a waiver of liabilty.

Our association manager says we can't provide our own services because of liabilty issues. The homeowners feel otherwise because there are other associations in the area that are self managed and do their own work.

Many of us feel it isn't so much a matter of liabilty as it is the management company getting more money for locating the vendors to provide the services, getting the bids, etc. etc. We also understand depending on a homeowner instead of a vendor could create problems if for some reason the homeowner couldn't do the work promised. Still, the homeowners that have offered to do the work are reponsible professionals and we feel they wouldn't offer their services if they didn't intend to provide them.

What are the legalities of a homeowner professional vs a vendor providing services to an assocition?

PatrickH (California)
Posts: 204

Posted:

Kathy,

If they are professionals, why not just do what you would with an outside vendor, sign a contract with them for a year? Make sure they have all the licenses and insurance that any contractor should have, but pay them a nominal fee of say $ 10 per month for their work.

That way, it's just like a contract with any other vendor, but the HOA is paying a lot less for the service.

RogerB (Colorado)
Posts: 5,067

Posted:

Kathy, I would hire them as independent contractors and reimburse for their insurance, out of pocket expenses, and any other expenses. But first I would pass this by an experienced HOA attorney.

HaroldS1 (Arizona)
Posts: 314

Posted:

Kathy - That is a crock. Why is your liability more for an owner/contractor than for say the property manager's vendor? You should be getting three bids for major expenditures anyway. Evaluate them as you would any other purchase. But if you pick your own vendors, be prepared to pay more for your PM contract. That is a given. Be aware some PMs have their own maintenance subsidiaries, or certainly ones they "work" with. They will get their fees one way or another. Maybe you need to look into finding another property manager too. Harold

MikeS1
Posts: 668

Posted:

Hire independant contractors and ave your PM ask for C.O.I.'s (certificates of insurance) on all your contractors and ask your attorney about liability waivers. He might tell you that they don't always hold up a law suit.

KathyS (California)
Posts: 145

Posted:

Quote:

Posted By HaroldS1 on 04/24/2007 8:27 AM
Kathy - You should be getting three bids for major expenditures anyway. Harold

Harold,

This is another problem we are having. The management company is telling us they don't receive any bids when they request them from contractors. Usually, in the end, there is only one bid and we don't know if it's a good one or not. Sometimes the prices seem excessive to me and others. I think I mentioned earlier we are not a large association but have never had a problem with getting bids before. Being in the SF Bay area, there are lots of landcaping companies, pool companies, etc. It is hard to believe no one is interested in the work. Which brought us back to the question why can't homeowners do the work if they have the licenses etc.

Thanks to everyone for their answers. I will take it in front of the Board at our next meeting.

Kathy

BradP (Kansas)
Posts: 2,640

Posted:

Kathy:

A waiver of liability is pretty much a useless piece of paper. I don't see any issue with them performing the work, however, they need to sign a contract and have their own insurance to protect the association. The term independent contractor has been used and that is what they need to be. Although unlikely, many things could happen that right now no one views as a potential issue, but things change when money and other things are at stake.

BradD2 (Florida)
Posts: 418

Posted:

We had the same problem with our last Management Company. The truth came out later that they had intentionally waived off several insurance agents that were providing significantly cheaper quotes. In addition, the work that they had done was 50% to 75% than it should have been. Just another reason we fired them.

I suggest you get at least three quotes for anything you might have done and if the quote is $10 from a homeowner then fine.

RickR3 (California)
Posts: 42

Posted:

I am the President of an HOA also in the bay area. We had similar issues with our OLD Management Company. A change there and things just got a whole lot better. We have replaced the landscapers, the pool maintenance company, the law firm, etc. Things just are a lot easier on myself and the rest of the BOD. The replacements have forced us to raise the dues, but within the restrictions of the Governing Doc's. A good management company is well worth their weight. At times it seems the fees they charge are excessive, but when I look back it makes that thought go completely away.

We have had a few homeowners ask to do or bid on the contracts. I tell them sure and when the non professional bids come in from them they are immediately dropped. One in particular is from a homeowner who has a landscape maintenance company. He has some contracts with individual homeowners and when the BOD looks at the job he does on those it was so much of a no brainer to drop his bid.

If I were you I would get your BOD looking for a new management company.

JM2 (Oregon)
Posts: 439

Posted:

Hi Kathy:

I see two options:
1) Ask the PM to include these community members in the bid process. If your PM can't find more than one company to bid, they aren't looking hard enough. Check the website of your local CAI chapter for their vendor list and invite those companies to bid as well. Don't stop at three bids if you don't want, get as many as you need. Before you hire one, make sure that they have a business license, have sufficient insurance and name the HOA as a co-insured, etc.

2) Look at the possibility of hiring them on as employees - but that would have some additional cost involved (workman's comp insurance, payroll costs, etc.). If that's the route you take and the owners are willing to be hired, then you would need a complete review of your HOA insurance to make sure that you have adequate coverage. You would also want to make sure that you put together (or have put together for you) a good personnel policy; include in it that if employees or their family members are elected to board positions, the employee needs to resign (to avoid a conflict of interest).

When I managed a portfolio of HOA's, there were certain landscape companies in the area that specialized in HOA landscape services. I would usually invite four companies to bid on projects, and walk through the HOA with all of them present, so that they could all ask questions and hear the same answers, so that the bids were all comparing the same set of specifications and expectations.

Part of the process for the manager is choosing companies that the manager knows will do good work with less supervision, which in the end, costs the HOA less money than a vendor that will require constant supervision. Also, it's knowing which companies may choose to write a cheap price on the contract but nickel & dime to death with extras. Be sure, whatever you do, that your new contract has a reasonable cancellation clause - but be aware that many landscape companies charge an even amount all year, but with a cancellation will go back and re-bill everything at a different rate, especially if they go through the heaviest part of the growing season when the most work needs to be done, only to get cancelled when the lighter months are ahead.

J. Patrick Moore, CMCA

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