Can You Save Your HOA Money By Doing Owners’ Repairs?
In this week’s tip, we explain how helping owners with routine maintenance can reduce your HOA’s expenses, liability, and disputes among owners.
A townhouse HOA in Michigan checks owners’ taps to ensure there are no leaks, which saves on HOA water bills and helps reduce the incidents of water damage between owners. It also requires owners to have a furnace inspection at a cost of $30 to ensure there are no furnace mishaps that can cause damage between units.
Though Robert M. DeNichilo, an attorney at DeNichilo & Lindsley LLP in Irvine, Calif., who specializes in representing community associations, hasn’t seen his HOA clients doing unit repairs and maintenance, he sees the benefits. “It sounds like a great program,” he says. “Offering the program and working with vendors is fantastic. In the long run, everybody saves. At HOAs, owners are required to maintain certain structures, and the HOA is required to maintain others. When there’s damage, there’s usually overlap, and preventive maintenance is a lot cheaper than fixing damage after the fact.”
Of course, your HOA should work only with pros. “A board should be careful it’s affiliating with a competent professional,” adds Matthew A. Drewes, a partner at Thomsen & Nybeck PA in Edina, Minn., who represents associations. “The last thing an association wants is to sign itself up for liability for bringing in someone who’s not qualified or to give the appearance of endorsing the contractor. And it certainly doesn’t want a board member doing these things, especially if it’s for a fee. In Minnesota, board members are given great deference for actions and decisions when they’re not being compensated. But once you take on something that’s not a true director responsibility and charge for it, those protections are out the window.”
No program is without risk, and J. Roger Wood, an attorney with Carpenter, Hazlewood, Delgado & Wood PLC in Tucson, Ariz., who specializes in representing community associations, sees some risks.
“I’m with the idea—to a point,” says Wood. “But boards should be mindful of what their governing documents say about whose responsibility it is to do A, B, and C,” adds Wood. “An HOA that takes responsibility for something that’s not its own may find itself taking on additional tasks. Then if the program gets really expensive and the board says it shouldn’t be doing it anymore, the owners might say, ‘But you’ve done it for years! ‘”
For more ideas on how your HOA could save money by doing owners’ work, see our new article.