COLUMN: Barbara Holland

Q. We asked the management company to provide proof of insurance, liability and workers' compensation, licenses, contracts and lists of duties for all people and contractors who work at our community. We received a partial list and paid $16 for the copies.

We discovered that the maintenance person, an independent contractor, was not required to have a license and not required to have liability insurance or a contract. We did not receive a complete list of his duties.

The manager has stated that our association has liability insurance that covers all companies performing tasks on site. We thought it strange that we would have coverage for other companies' employees. When we tried to contact the insurance company we were told all inquiries must come through the management company.

We spoke with the state Ombudsman's Office, which agreed that all workers at associations should be licensed, insured and have written contracts. What is your opinion?

A. Every company that provides service at the community site must have liability insurance naming the association as an additional insured on their policy. This serves as insulation, providing additional protection to the association.

For example, if the roofing company the association employs accidentally spills tar on a homeowner's car and the homeowner sues the association, the association may countersue the roofing company. With insurance premiums rising and insurance policies becoming more difficult to obtain, associations do not need claims against them that could at some future date lead to an insurance coverage problem.

Second, every company that provides service at the community needs workers' compensation. This coverage is not standard in an insurance policy that covers property and liability issues. The association would be required to obtain separate coverage for that, too.

Whose premiums and deposits will increase if there are injuries on the property and the contracting companies have no coverage? Why increase your own operating costs and liability when you can simply hire companies that are properly insured?

As for the technician working for the association with no contract, you invite Uncle Sam to the table. He could be viewed by the IRS as an employee and thus the association would be liable for him and could be penalized for not withholding taxes from his pay. Even with a contract he could be viewed as an employee.

The association board should inform the management company to take proper steps to protect the association.

Questions for Barbara Holland mazy be sent to Association Q. & A., P.O. Box 7440, Las Vegas, NV 89125. Her fax number is 385-3759.

Barbara Holland, Certified Property Manager, is president and co-owner of H&L Realty and Management Co. She is a member of the Institute of Real Estate Management and is the author of two books on the subject. Holland is a past president of the Greater Las Vegas Association of Realtors.

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