Q. Our board president said that her husband was qualified to perform gutter and minor roof repairs at our community, and would do the work for free. He is not licensed or insured, yet the other board members agreed to use her husband to avoid doing an assessment. They also agreed that we should always try to have members of the association do work for free if they volunteer. Is there cause for concern?
A. “In a word, ‘yes,’ there is cause for concern,” says Gary M. Daddario, partner in Marcus, Errico, Emmer & Brooks, PC, which has offices in Braintree, Massachusetts and Merrimack, New Hampshire. “Anytime someone is performing work on the association’s property, there is some amount of risk involved. In situations in which a person is not licensed for the type of work they are performing, if licensing is applicable, the risk increases.
“In situations in which a person is performing work without insurance, the risk increases significantly. Even those persons with the best of intentions will feel compelled to file suit if an injury on your property results in permanent disability or the need for significant medical treatment and ongoing expenses. In the event of a tragic death, you will not even be communicating with your ‘vendor,’ you will be dealing with the executor of that person’s estate, who may very well elect to file suit to increase the estate’s assets.
“These are the direct scenarios that could spin out of an unlicensed, uninsured person performing work at the property. Further complications could arise if this person’s accident ends up also injuring other people or damaging property.
“Still more complicated questions would be posed if poor performance of the work—even if it’s unintentional—resulted in injury or property damage surfacing sometime after the fact. Frankly, these liability risks do not even account for the full spectrum of potential issues. To the extent that the person performing services has a connection to the board, there could also be allegations of self-dealing by those who may choose not to believe that some form of compensation isn’t being exchanged. Further, some governing documents contain language prohibiting the association from dealing with ‘inside’ parties.
“Depending on the language in the governing documents, it is possible that this type of arrangement is prohibited. Another consideration is presented with respect to the work itself. If the job is done in a manner which is not satisfactory, it is difficult for the association to seek redress when the person performing the work is an ‘insider’ and not an ‘arm’s length’ vendor. Here again, having obtained the services free of charge, the association could face obstacles in seeking remedies.
“In sum, given the increased risk and multitude of potential problems, it is advisable, at least from a legal perspective, that associations deal with outside vendors who hold the necessary licenses and adequate insurance.
“Although negative incidents may be rare, it would only take one such issue to more than eliminate any cost savings resulting from insider dealing. Further, there is nothing inequitable about unit owners being assessed appropriate condo fees to cover the necessary expenses associated with proper maintenance of the property.”