“I said, ‘Really what you need to be concerned with is exposure for the association because it’s on association property,’ “ says Linda A. Engle, CIRMS, an account executive with CB Insurance in Colorado Springs, Colo. “They said: ‘Oh yeah.’ A light bulb went on.”
Volunteer labor by residents can be a boon for associations – saving money, building a sense of community and ensuring work is completed by the people who benefit the most from having it done right.
But volunteer labor can come with an unseen price tag if it’s done poorly, causes injury, damages property or gets the association into a legal or insurance fight. Board members, insurance agents and community managers say it’s important to consider what types of jobs are appropriate for volunteers – and to leave the dangers ones to the hired help.
When Engle raised her objections, the board decided to hire a contractor to dismantle the shelter and build a new one. That way, if something went wrong, the contractor’s insurance would take the loss instead of the association.
“I feel like I’m throwing cold water on their great ideas once in a while,” says Engle, who has specialized in community association insurance since 1998. “We know associations have a very hard time getting volunteers, and we don’t want to discourage that, but there’s a fine line between the risks and benefits.”
Not quite as fine a line, maybe, as the association that asked her whether a resident should be allowed to mulch dead trees with his wood chipper.
Even a seemingly innocuous idea like allowing a resident-led Boy Scout troop to clean up a weedy, trash-strewn common area can have its dangers. Involving children can create a huge exposure to liability for an association and could place the community in a bad position if, say, a boy stepped into a gopher hole and got hurt, Engle notes.
Volunteer labor also has zealous advocates like Robert McConnell, president of Chevy Chase subdivision near St. Louis. “I really believe these things help make it more of a neighborhood,” he says. “It’s a community spirit thing.”
One weekend last June, volunteers completed a series of projects including weeding, pulling out trees and relandscaping the community entrance. All told it saved about $3,000. In one day, 15 adults and about seven kids worked for several hours planting and moving decorative grasses.
Timothy S. Rainey, a portfolio manager with KS Management Services in southeastern Michigan, believes in volunteer labor too. A 21-unit condominium board came to him trying to figure out how it could paint a 1,300-foot fence along the property without busting its budget. All three bids submitted for the project were more than the association could afford. Rainey advised the board to have a “Tom Sawyer Fence Painting Day” and make it fun.
The idea was so popular that about 30 people showed up to paint, munch on chips and burgers and socialize. “It was a perfect picnic day,” Rainey says. “They got it all done for the cost of food, paint and equipment rental. It was a fraction of the (bids).”
With the economy sluggish, associations are increasingly looking for ways to save money. “They are looking for ways to handle things (themselves) that two years ago they wouldn’t have thought twice about hiring someone to take care of,” Engle says. “They don’t want to raise dues to pay a subcontractor to cut down the bushes, but you also don’t want to give a chainsaw to an unqualified person.”
TAKE THE GOOD
Small associations are particularly motivated to save money by doing work themselves since there are fewer units to spread the cost, says Clifford J. Treese, CIRMS, president of Association Information Services in the San Francisco area. “At the smallest associations, people just say, ‘Hey, we’re going to do it,’” whether it’s snow shoveling or getting on a ladder to change light bulbs.
Saving money is often the lure for using volunteer labor, but the tactic has other benefits as well.
Bernie Howe, CMCA, PCAM, general manager at Lake Linganore Association in New Market, Md., says volunteers get to know each other and that breeds more volunteering. “More people are meeting more people. A lot of people don’t even know their neighbors,” says Howe, who is launching a volunteer program at the lake community he started managing in March. The next time a committee chair needs help with something, he or she can draw from the residents they met at the last volunteer gig.
Howe is methodical in his handling of volunteers. He sends out a talent survey in which residents list their educational and professional backgrounds and their interests. New members get the survey in their welcome packet. From there, he sets up a searchable database so that when he needs a certain type of volunteer; he can sort through the electronic pile and find them.
“If you get 80 good volunteers in a community of 8,000 residents, like mine, you’ve got a real gold mine. It’s not like you need to have everyone. One percent of your population is great,” says Howe, who uses volunteers to fill the gap between the list of projects that an association wants to do and the number it can afford.
Treese says it’s also a way to channel, the energies of residents who want to be involved. Associations that have many retirees tend to have larger pools of potential volunteers, he says.
Sometimes volunteers can do a better or faster job than paid help.
Just after McConnell moved from a farm in Iowa to Chevy Chase subdivision, a vicious wind storm cut a swath through his neighborhood. “We had massive tree damage. Most of the tree companies were overwhelmed, so a lot of stuff wasn’t getting cleaned up quickly,” he says.
Residents didn’t have to wait. McConnell and others pulled out their own chainsaws and got to work. McConnell, who hones his sawing skills on the farm, started helping so quickly, he was soon president of the association.
Rainey, in addition to managing properties, is president of Mill Creek Homeowners Association, where he lives. The large pond on the property hosts 11 species of fish, blue herons, egrets and water fowl. Cleaning and maintenance would cost $3,500 a year if a contractor did it. He and some neighbors do it instead.
“We keep it looking nicer than an outside contractor would,” Rainey says. “We see if every day. We want it to look as nice as possible.”
Rainey gets push back from some residents at associations he manages about the volunteer work. “Most of the people are not motivated because they figure they pay their annual fees. They figure that’s good enough,” he says.
He is won over by the cost savings and community building, as well as the convenience of having the repair crew available quickly. Outsiders often try to cut through his gated community to get to other roads, crashing through the gate. Calling a contractor to repair it each time would mean a wait and a $150 bill. Instead, he or another neighbor fixes it.
McConnell has made volunteer work a windfall for the whole community by spending some of the savings in other ways. A recent spring evening featured a party with a band and ice cream sundaes. The savings also helped pay for an outdoor theater system that can be used for community gatherings or for families that want to have their own parties and events.
It’s easy to justify the push for volunteers when you can point to positive outcomes, McConnell says.
LOSE THE BAD
However, even advocates like McConnell and Rainey say there are risks and shortcomings to volunteer work, especially if boards don’t set up safeguards. Even something simple, like planting shrubs, can end badly if volunteers don’t know what they’re doing. The association could lose hundreds of dollars.
Howe has had many good experiences with volunteer work, but volunteers tend to take longer than hired help. At a golf community he managed in the Charlottesville, Va., area, 30 volunteers agreed to renovate and add onto the clubhouse, expand the kitchen and put new roofs on cart barns. Howe had to schedule the work around the biorhythms of the volunteers; no one was available in the early mornings because they were on the links.
One serious risk with volunteer labor is harming people or property when volunteers make mistakes. A lawnmower that kicks out a rock, for example, can injure a passerby or take out a window. Howe recalls a time when a volunteer – setting up a large extension ladder by himself – took out an entire lamppost. (Other volunteers helped repair the damage.)
Without oversight, a number of problems can go undetected. During the clubhouse renovation project in Charlottesville, volunteers drilled holes right through the building envelope for electric wiring – a major building code violation. Howe, who had a Class A general contractor license and the experience to oversee the workers, caught it in time to fix the problem.
Engle remembers a case when a resident fixed his own pipes instead of checking whether the repair would be covered by the association. His repair job failed, the unit flooded and the association insurance faced a $12,000 claim for ruined hardwood floors and baseboards. “If the work is shoddy, or a mistake is made and a pipe isn’t tightened, the next thing you know, water could be flooding a unit,” says Engle.
If an association tries to hold the volunteer responsible for damage, she notes, ill will can ensue.
Injuries to volunteers can be a particularly sticky situation. Though it seldom happens, financial and legal problems arise if the injury involves expensive medical care. “The larger the claim, the larger the magnifying glass,” says Treese.
Associations can’t just assume that a volunteer would never sue. High medical bills might make it necessary, or the estate might make that decision if a person is killed. “A volunteer can be the nicest guy on the block until something happens. Then it can get ugly,” says Engle.
That’s why insurance is crucial.
Although insurance rules vary by state, and it’s not always clear what a judge would decide, associations should fine tune their coverage. Three types of insurance could apply to volunteer workers; general liability, workers compensation and special volunteer policies.
Association commercial general liability coverage can cover cases of negligence, says Jackie Fink, CIRMS, a health care risk consultant for RJF Agencies in Minneapolis. For instance, a volunteer who falls off a faulty association ladder could be covered. But many injuries of volunteers don’t involve negligence, and coverage per incident could come up short.
Workers compensation policies could cover volunteers in some states. Treese says a few states consider those under the direction or control of the association to be workers even if they aren’t paid. “The association should always have workers compensation (insurance) even if they don’t have employees,” says Treese. The coverage also helps with contactors if they are injured after their own insurance lapses.
Workers compensation for associations without paid employees can cost as little as $300 or $900 a year, according to Treese.
Stand-alone policies that cover volunteers are helpful and not too expensive. Fink says most policies are available for $400 a year. “We’ve been writing a lot more of these in the last couple years,” Fink says. About 80 percent of the associations she works with have picked up the coverage recently. “They don’t want to see their neighbor out of pocket volunteering for their association.”
The bottom line is that associations need to weigh the risks and benefits of volunteers for each community project.
“There are a lot of competent people in associations that can do things,” Treese says. “But when they do physical work that could lead to bodily injury, the association should think about the risks and whether it’s better to have a contractor who is already insured do the work.:
Rainey uses a similar rule. Anything that needs a permit or a level of skill the average person doesn’t have, he leaves to a contractor. “If it involves (possible) electrocution, dismemberment or drowning, then I’d say you should have an outside contractor who is licensed, insured and has workers comp,” he states.
Forethought and safeguards never hurt.
By Tamara Lytle