In this series, we ask our experts for their advice on real-life situations that residents and board members of a homeowners’ association (HOA) are currently facing. Read on to learn about this HOA’s dilemma and what our experts advise.
HOA Dilemma: HOA Maintenance: When to DIY vs When to Hire a Pro
There’s a retired owner who has lived in our homeowners’ association (HOA) for 20 years. This retiree has recently become especially skilled at installing shade sails and is a well-known handyman. This person is considering volunteering for the HOA by doing odd jobs around the community, like painting and cleaning the pool. Community leadership is open to the idea as a money-saving strategy but concerned about the risks. How would you advise a board to proceed in deciding whether to allow owners to do small maintenance projects around the community (on a voluntary basis) or to pay a contractor to do them?
Manager’s Advice: Consider the Liability
“I love this question and I get asked this often. I have always been a huge advocate of maintaining a sense of community in my associations by accepting volunteer services from homeowners. This has been a great springboard to get neighbors to talk to one another and develop relationships. Plus, it helps the association save money.
I have always advised my boards to ask for insurance. However, if the job is not one that is a huge risk, they must at minimum sign a waiver of liability. In addition, I suggest that the association pay for the materials and, if there is no compensation, send a nice thank you card and a gift card to show appreciation.
If it is a large task, I try to encourage the board to make it a community project or create a committee to foster that community feeling. It’s always nice to complete a project with fellow neighbors and build those connections.”
- April Herrick, Community Association Management Director, Associa McKay Management
Manager’s Advice: Create a Committee
“I would advise the board to let this retiree lead a new volunteer committee in which they can present one-time projects—such as painting, a repair, or an installation of an item—to the board and complete themselves. Most governing documents allow for an ad-hoc committee to be created. I would limit the type of repairs to one-time services. The description of the committee can outline if the HOA will pay for materials or not. If so, then the budget should also reflect a line item for purchases. These are volunteers, so they would not be paid. Lastly, make sure to make this change in a board meeting so that it is properly documented in the minutes of the association.
I would recommend staying away from ongoing services, such as servicing the pool, especially if it is one person and not a group of people. There are contracts and vendors who perform this service and there are regulations that need to be followed. It also becomes complicated when a volunteer is not servicing to the standards of the HOA.”
- Greg Farkas, Community Association Manager, Associa Principal Management Group of North Texas
Manager’s Advice: Check Your Governing Documents
“First, make sure that there are no governing regulations or rules at your HOA which may prohibit this. The board should consider state (in the U.S.) or provincial (in Canada) employment regulations that determine or define what an employee is versus a volunteer. Also, the board should be cognizant of insurance requirements for the owner to volunteer his time at the property. Make sure that this owner is covered for any potential injuries he may incur while volunteering. Also make sure that if the work done by the volunteer should accidentally cause damage to the property, that insurance will provide coverage. Last, the board should put a cap or spending limit on how much money the volunteer can spend on a specific project.”
- Bruce Adanac, BA, Director of Community Managers, Licensed Strata Manager, Associa British Columbia, Inc.
Workers’ Compensation Coverage for Communities: Your Questions Answered
HOAs perform a unique blend of functions that involve governance, business, and resident engagement, opening them up to a unique set of risks. Risk management involves identifying, analyzing, and evaluating those potential areas for loss and then implementing methods for mitigating them. Workers’ compensation insurance coverage is designed to address a common area of risk for associations: contracted personnel. Read our article, “Workers’ Compensation Coverage for Communities: Your Questions Answered,” to find frequently asked questions about workers’ compensation for HOAs and answers from the experts at Associations Insurance Agency, Inc.