Hiring a Contractor

Q. What steps should I go through, both as an owner and as a board member, to assist me in hiring a contractor to do work in my home or for the association?

A. A recent court ruling [Andreini v. The Superior Court of San Mateo County, 60 Cal. App. 4th 1415 (1998).] emphasizes why both you, as an individual, and your association should use only licensed and insured contractors to minimize your exposure to claims.  To very briefly summarize, in Andreini, homeowners hired an independent contractor to perform touch-up painting work at their house.  An employee of the independent contractor sustained injuries on the job after he lost his balance on a windy day while painting the chimney.  The homeowners were not at home at the time of the employee's accident.  In addition, they did not control the work being done nor did they provide tools or materials for the work.  The California Court of Appeal found that, under certain circumstances, an independent contractor's employee could sue the homeowners directly where the independent contractor did not carry worker's compensation insurance nor was the contractor self-insured under the worker's compensation laws. 

In an effort to avoid this type of situation, I can offer the following suggestions:

• Call the California Contractor's State License Board ("CSLB") to verify that the contractor is licensed, the license is current and active, and that no complaints are pending.
• Discuss with your insurance agent what type of limits/coverage you should require of the contractor.  Various types of insurance can include Commercial General Liability, Automobile Liability, Umbrella and/or Excess Liability, and Worker's Compensation.
• Require, as part of your contract, that the contractor maintain the requisite insurance in appropriate amounts necessary to protect the Association or you, as a homeowner.
• Require that you be named as an additional insured under the applicable contractor's insurance policies.  This can be accomplished by the adding of an additional insured endorsement to the contractor's applicable insurance policies.
• Require that you or the Association be given a mandatory thirty (30) days' prior written notice of cancellation of any of the required insurance policies.
• Before you allow any work to begin under the contract, have the contractor provide you with certificates of insurance and any additional insured endorsements which establish that your insurance requirements have been met.  Certificates of insurance are issued by the contractor's insurance agent and identify the contractor's policies of insurance, the limits of liability, and coverage periods.
• If you have any doubts as to whether your interests are being protected, you should have an attorney review the proposed contract and proposed insurance requirements prior to signing the contract.

Laura V. Kwiatkowski is a member of the Community Associations Institute and is a San Diego attorney.  Readers can get their condominium or homeowner association questions answered by calling the Community Association Institute at (619) 299-1376 or sending questions to:  Condominiums, Homes, San Diego Union-Tribune, P.O. Box 191, San Diego  92112-4106.

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