Do-It-Yourself? When Free HOA Help Can Be Costly

 

1) Check your insurance. “First talk to an insurance agent and ask, ‘Are we covered enough?'” recommends Sima L. Kirsch, a principal at the Law Office of Sima L. Kirsch P.C. in Chicago.

“Every association should obtain what’s called a minimum premium workers’ compensation policy,” advises Robert L. Tankel, principal at Robert L. Tankel P.A. in Dunedin, Fla. “That means the association is representing that it has no employees that need coverage, but in the event volunteers are injured, they’ll have workers’ compensation to cover the injury and any allegations of a loss of income.”

Is that a reasonable expense for struggling associations? “You need to make a business decision whether the cost of the policy—about $1,200 a year—is cheaper than three hours of a lawyer’s time or the first five hours of defending a lawsuit,” says Tankel. “That’s a business decision. If you’re going to save money in one way, you need to get protection in another.”

2) Beggars should be choosy. Though your association may be in dire financial straights, you should still be choosy about the types of work you allow association members to take on. “The classic lawyers’ answer to whether to use volunteers is that it depends on the task you’re talking about,” says Nancy Polomis, a partner at Hellmuth & Johnson PLLC in Eden Prairie, Minn. “For some things, it’s OK. For most things, I’d be very, very cautious. A lot of associations will do gardening tasks rather than paying a landscaper. That’s probably not a big deal. But I had one association that was trying to get by on a bare-bones budget, and it had owners rotate mowing the lawn. I said, ‘Are you crazy? It saves you X dollars, but when somebody mows his foot off, will it really be worth the savings?’ The board hadn’t considered that.”

Another example? A member volunteers to shovel snow. “He forgets to do it, somebody slips and falls, and the association is liable,” explains Polomis. “Or he slips and falls while shoveling, breaks an ankle, and makes a claim against the association’s policy. There’s often no malice intended by the owner against the association. That’s just the process the owner has to go through to get his medical costs paid.”

How do you know when to draw the line? “Too dangerous,” says Kirsch, “are things where you have to be licensed to do the work, such as electrical or plumbing jobs.”

3) Get waivers, but know their limits. “Consider obtaining a release in advance of the work indicting that the volunteer knows the risks and holds the association harmless from injuries suffered while doing the work,” advises Tankel. “That being said, courts generally frown on releases given in advance of injuries. But it never hurts to get a waiver. It’s just one more layer of protection—how thick it is, I don’t know.”

Polomis is also dubious about the enforceability of waivers. “Having an individual sign a waiver saying, ‘If I fall and break my neck, I won’t sue the association’ sounds good,” she explains. But for any contract to be valid, both sides must give up something of value—which in the law is called consideration. “I don’t know what the consideration for the waiver is,” says Polomis. “The association isn’t going to pay the work, but, in exchange, members are giving up the right to sue the association if they get injured.

“A waiver might give owners pause, but if people have significant injury, they’re going to plow ahead and do what they can to get reimbursed for damages,” concludes Polomis. “Waivers are good to put into place. But associations should know that if push comes to shove, a court may say the waiver isn’t worth anything, and the association is liable.”