Maintenance Contracts
QUESTION: We are a small, self-managed, condo association. I have been newly elected President and we have a big problem: the last president hired a homeowner for maintenance work & didn't pay him. As a result, bad feelings ensued. Because this homeowner is important, as he knows what he is doing, he's honest and hiring him helps to keep costs down. However, paying him has presented bad feelings with the out-going president. What guidelines can we implement when hiring homeowners? RESPONSE: First and foremost, you should review your Association's governing documents to see if there is any prohibition or special requirements involved when hiring a member of the Association to do paid work for the Association. If any such requirements exist (i.e., no owner may be hired for work unless unanimous consent of the Board), then obviously you should follow them.
You should also always have a written contract for any work being paid for by the Association, whether it's an outside contractor or an owner. This can go a long way towards preventing any misunderstandings in the future. Even if your governing documents do not require special approval to hire owners or board members, you should contemplate adopting such guidelines for future use. Such guidelines might require unanimous (or super-majority) consent of all directors, a written contract, or even the obligation to acquire at least one other bid from a non-owner, so as to ensure that the owner doing the work is giving you a fair-market price. Gregory J. Montero