Home -> Law Blog Directory -> Real Estate & Property Law Blogs -> California Condo & HOA Law

Real Estate & Property Law

: California Condo & HOA Law

Is It Okay For Managers To Recommend Contractors to Homeowners?

I just attended one of the biggest events in California for managers, the CACM Expo in Oakland. While there, I polled many managers and asked the question, "what do managers want to know?" I was asking for questions for the blog, as I find homeowners and board members tend to pose more questions than managers. So here is one for the managers!

May Managers Recommend Contractors to Owners Who Need To Do Work On Their Individual Lots?

The exact same question might be asked by a Board Member.

My answer is "Certainly, yes, by all means, it is beneficial to point owners to good, responsive, qualified, licensed and bonded contractors."

That said, there are some things to keep in mind. Blending work done by contractors between the HOA or Condo Association and the Owners can lead to problems. Some arise more commonly than others. Here are my favorites (to talk about, not to recommend):

**Manager/Board recommend, contractor gets so busy with owner repairs, no longer has time for the work of the Board.

What can I say? This might be a concern, but if the person is good, and they are doing work for the owners, everyone benefits. Manager, you may have to start looking for a replacement.

** Manager/Board recommend, the contractor does shoddy work for owner, owner blames Board/Management, demands that the Board rectify the matter.

This often happens. Owners assume that if the manager recommended they contractor, they would somehow guarantee the work. Not so, well ... I should say not so if terms are made clear right up front. If owner hires, the relationship is between contractor and owner, not contractor and HOA or condo association.

Key: don't recommend contractors that do shoddy work.

And if you provide names or lists of names, make sure that any recommendation comes with a disclaimer such as: "Board / HOA Management are providing this information to help you locate contractors that have shown us they are dependable and have done satisfactory work for the Association. We do not make any specific recommendations, guarantees or warranties about this/these contractors. This/these contractors at all times when working for us has/have provided adequate proof that he/she/they are licensed for the work being done, and carry insurance that protects the HOA, and those are things that you need to check out with any contractor that you hire to do work in your unit."

** Manager/Board recommends, and contractor does work, owner refuses to pay - contractor looks to board for compensation or resolution.

Don't fall into this trap. The Board needs to make it very clear, preferably in writing, that if a contractor does work for the HOA and the Owner, that the contractor is separately working for each, and that the HOA is not responsible to pay for owner's work, and the owner is not responsible to pay for work done in or about the unit or dwelling that is the HOA responsibility. Contractors must be warned not to blur the two. Separate agreements/contracts/bids must be signed.

** Contractor does not know what work is HOA responsibilty and what is owner responsibility, and so he or she works with the manager and the situation gest so confused, and the contractor does a bunch of work, and then looks to the manager to resolve issues over who pays for what, or the HOA / Condo Association to foot the bill.

My advice has to be: don't let the lines get blurred in the first place. Be clear with contractors that are used by the HOA or Condo Association when they are also doing work for the owners that they must have a separate contract. Be clear with owners that when the HOA / Condo Association contractor is working for them, they need their own contract or agreement. If it is a common practice for owners to use HOA / Condo Association contractors, they (both contractors and owners) may need specific written policies on working relationships. A good policy would help head off problems and would also protect the Association.

If one contractor is doing repairs and some of the work is the HOA responsibility and some is owner responsibility, the separate agreements must specify how the contractor should allocate their time and charges on any particular aspect of the work of construction. This really comes into play when there is water damage or some other kind of damage where the HOA or Condo Board might need to contract to repair the common area but the rest is the owner's responsibility. There certainly may be advantages to using the same contractor to do the work, but the lines need to be drawn clearly, preferably on paper, so that all parties understand their responsibilities clearly. In fact, the Board may need to get a lawyer involved to help spell out how to allocate the time and charges for combined work like this, and how to get the owner to sign on for their share "up front". It's extra work, yes, but worth it. Once the lines get blurred, the finger pointing begins.

And notice, nowhere in this email did I use the word "recommend". Think in terms of being a resource, not making a recommendation for a specific contractor.

In summary, it can be helpful for Managers to give out the names of contractors, and many do it without any history of problems and without thinking about "all the baaaaad things that can happen." Managers tend to have more experience dealing with contractors and hopefully, stick with and would only give out names of the ones that do good work, and who are licensed and bonded, and properly insured. Thus, managers can be a good source. Owners often have no clue whatsoever where to find a contractor that knows how to work in HOAs, and especially in condo buildings where the responsibilities may be harder to determine between common area and separate interests.

And one last thought, when a contractor's name is offered by the Board or Manager for owner work, the contractor may work even harder to please the owner so they do not report back bad things to management or the board.

Full post as published by California Condo & HOA Law on February 21, 2009 (boomark / email).