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Q&A: Using Association Members to Do Contractor Work

Q. Our board president said that her husband was qualified to perform gutter and minor roof repair 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?

                               —Conflicted Resident

A. “Boards allowing unit owners to perform work on behalf of the association on a volunteer basis should examine certain issues prior to doing so,” says attorney Nicholas P. Bartzen of Chicago-based firm Levenfeld Pearlstein. “Arguably, the most important consideration is that of liability for injuries, and insurance. The board should be sure to check with the association's insurance carrier to ensure that there will not be a coverage issue should the volunteer injure him or herself in the course of the work, or if the volunteer causes any damage to the association's common elements. In this particular question, the inquiry relates to gutter and roof repairs. The association should make it a practice of hiring licensed and insured contractors to perform such work. By doing so, the board ensures that the contractor will be bonded and insured and covered for any damage done to the building. This third-party coverage is likely non-existent when the work is performed by a volunteer. Thus, the board should consult with the association's insurance carrier to determine what insurance issues may arise from allowing volunteers to perform potentially hazardous work on the common elements.

“Another practical concern is whether the board is comfortable resolving potential workmanship disputes that may arise as a result of the volunteer's work on the building. As the question states, the volunteer is the spouse of a current board member. If that individual performs substandard work, or if his repairs lead to more gutter issues or continued ice-damming that contributes to leaks into units, the board must be prepared for the potentially uncomfortable job of resolving the dispute with the board member’s husband and then even footing the bill to correct or re-do the work. This obviously puts the board in the precarious position of a potential business conflict with the fellow director and, in cases where associations simply have a unit owner not affiliated with the board perform the work, potential conflicts with neighbors who have attempted in good faith to save the association money. Notwithstanding their fiduciary duty to act on behalf of the association, board members must also function simply as neighbors and fellow owners with those individuals attempting to assist. Outsourcing the work to a private contractor obviates any of these concerns.

“Finally, given that this issue is one of an association member simply volunteering, the board need not concern itself with Section 18(a)(16) of the Illinois Condominium Property Act, which contemplates conflicts of interests whereby the association enters into a contract with either a board member or a corporation or partnership in which a board member or the board member's immediate family has a 25% or more interest. Such contracts would require notification to be provided to all unit owners, thus affording the owners the opportunity to file a petition for an election to approve or disapprove a contract. Again, given this work is on a volunteer basis and is not with a board member or corporation owned in part by a board member, a Section 18(a)(16) issue will not be triggered.”

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