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Homeowner and Condo Associations Must be Prepared for Disasters!

Trying to save money? Beware of hiring unlicensed contractors. They could be more expensive than you think.

 
PRLog - May 16, 2011 - KENNESAW, Ga. -- A West Virginia man probably never thought he could be held liable for more than $1 million when he hired an electrician to replace a circuit breaker in his mother’s house.

A California community association never expected to be found responsible when a contractor’s employee was electrocuted while installing new rain gutters.

BUT THAT’S EXACTLY what happened.  In both cases the workers were unlicensed-and, the results were costly for those who hired them.

“Poor Workmanship may cause or exacerbate other problems, in some instances impairing the structural integrity of a building or improvement.  Thus, the quick and inexpensive repair may produce exactly the opposite result – increased expenses and delays.”

With escalating energy and fuel costs, increased delinquencies and bad debt resulting from current economic conditions,  Your community association board may be looking to trim expenses anywhere it can,  especially with repair and maintenance work.

Some community leaders and residents believe they can reduce costs by using day laborers or community volunteers instead of licensed contractors for such jobs.  Others might believe that licenses or permits aren’t required for smaller projects or that the permit process is a waste of time and an unnecessary expense.  Before you take another step, consider the potentially costly consequences.

BUYER BEWARE

Some of the drawbacks of using an unlicensed contractor are obvious.  Shoddy workmanship, inability to enforce warranties, lack of manufacturer warranties, damages to the property and improvements and failure of completed work to comply with applicable building codes are frequent complaints.  If the work performed by the contractor does not comply with local or state codes and ordinances, the building department or agency with jurisdiction may stop the work and, if the work is complete, require corrective work to be performed.  Corrective work may consist of hiring a licensed contractor to remove the improvement altogether or prepare and submit the documents necessary to obtain a permit.  Of course, the corrective work is an additional expense not contemplated when initially engaging the contractor.  Moreover, the local enforcement authority generally has the power to levy fines for building code violations.  The fines, which may accrue on a daily basis, may result in a lien against the property.


Poor Workmanship may cause or exacerbate other problems, in some instances impairing the structural integrity of a building or improvement.  Thus, the quick and inexpensive repair may produce exactly the opposite result – increased expenses and delays.

Unlicensed contractors requiring large upfront payments without performing the services leave the property owners without much recourse because state recovery programs are often limited to resolving disputes with licensed contractors.  If the work is done well, is any harm done?  What about small projects that are not likely to result in building code violations or major damages, such as installing gutters, replacing a few roof tiles or hanging a ceiling fan?  Why can’t residents volunteer to help out when it comes to certain maintenance projects?  Is hiring someone who is licensed in another state such a bad idea?

UNEXPECTED CONSEQUENCES

Using an unlicensed contractor may have negative impacts that are immediate or delayed.  That’s a lesson learned by the man in West Virginia after he hired an electrician to do some work on his mother’s house.  Sometime later, a cable company employee was working on a cable attached to a nearby utility pole and fell, breaking his hip.  The cable company worker filed suit against the utility company, the cable company and this West Virginia man, the son of the owner of the property.  The injured cable worker claimed the wiring from the utility pole to the circuit breaker was faulty and later discovered that the electrician that the man had hired was not licensed to perform the work.

In a community association, all owners and residents are affected when problems result from code violations.  How would you feel if what you considered a routine project for your unit resulted in displacing almost half of the residents of your building?  Residents of a condominium development in Florida have paid dearly – both emotionally and financially – when a do-it-yourself home improvement project went awry.  A fire started in the condominium unit when an improperly mounted ceiling fan fell and created a short circuit.  An analysis revealed there was no fan box, as required by the city’s building code.  Also, the fan was attached to the drywall with just a toggle bolt instead of being secured to a ceiling joist or beam.  While the association’s master insurance policy covered most of the repair work, it did not reimburse the owners for replacement housing, furniture storage or the long, costly legal battle that ensued.

CHECK IT OUT

We require all vendors to pass a rigorous screening process before being approved to service any of the associations we manage.  Vendors are also required to provide Proof of, and continuously maintain workman’s compensation & liability coverage to avoid cancellation of their contracts.

Associations should require contractors to provide proof that they are licensed and insured.  Ask to see a copy of their license.  Ask for a copy of their liability and worker’s compensation insurance.  If the contractor won’t provide proof of insurance or the declaration page for insurance has a different name, steer clear.  You can also find out whether a contractor is licensed by going to the appropriate state agency.

Associations and consumers in general, should be suspicious if a contractor asks for a large down payment, requests payments be made to an individual rather than the company or asks that checks be made payable to “cash”.  If you are told the work doesn’t require a building permit or you’re asked to apply for the permit yourself, you should also be concerned.

Board members have a fiduciary duty to the association and its members to make decisions in good faith, as a reasonably prudent person would in similar circumstances, and in the best interest of the community.  While board members may rely upon the advice of experts, and they often have a stronger legal defense when they do so, they must insure they have the information necessary to make informed decisions.

Cutting corners-either in time or money-can have costly consequences.

Read from source at http://www.communityassociationmanagement.com/facilities-...

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Riverside is a full service HOA and condo association management company serving metro Atlanta. Riverside leads the industry in customer satisfaction and is the fastest growing HOA and condo property management company in Georgia .

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Source:Riverside Press Room
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Location:Kennesaw - Georgia - United States
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