Banning Contractors
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BANNING CONTRACTORS

QUESTION: Is it permissible to blacklist a contractor in our newsletter or would we need to say something to the effect of "Contact a board member for a list of contractors who've done a good job and ones to avoid"?

ANSWER: This comes up from time-to-time in associations I represent. It happens more often in condominium developments because of common elements inside condo walls. Following are your options:

Good Contractors. Associations can keep a list of "recommended" vendors (such as electricians and plumbers) for owners to use. Doing so has two benefits: (i) it's a great convenience to owners who have no idea who to hire and (ii) you get vendors who are familiar with the development, do good work, and are properly licensed and insured (assuming the association screened them).

Bad Contractors. When it comes to "bad" contractors, associations have several options. They can do the any of the following:

1. Owner Reviews. They can keep a list of homeowner "reviews" of various contractors, just as the Better Business Bureau, YELP and others do. The association does not make any recommendations, it simply compiles reviews--good, bad and ugly--and makes them available to homeowners.

2. Recommendations. Associations can take a more affirmative role in one of two ways. They can either:
a. Authorized Contractors. Publish a list of authorized contractors for owners to use, i.e., those vendors who are licensed and insured, and leave off the list the known bad contractors. Or,

b. Full Contractor List. List the authorized contractors but also add a section of contractors the association recommends against using. The association is not prohibiting the bad vendors, it is merely recommending against using them based on complaints it received from owners as well as their own experience with contractors who violate the association's rules.
3. Blacklist. The final option is to ban bad vendors from the development. This is especially relevant in condominium developments where contractors (such as electricians and plumbers) open common area walls to perform work. If their work is shoddy, it can result in significant damage to the common areas and other units. Since the association controls the common areas, boards have a right to protect the association from contractors who (i) damage the common areas, (ii) violate the association's parking rules, hours of construction, etc., and (iii) perform shoddy work that could result in harm to common areas and surrounding units from water damage, mold, electrical fires and the like. Arguably, boards have a duty to ban such contractors.

Recommendation: If boards create a list of recommended contractors and/or ban bad contractors, they need a paper trail justifying their decision in the event they need to defend it. The vendor list can be published in the newsletter or kept in the association's office.

ASSISTANCE: Associations needing legal assistance can contact us. To stay current with issues affecting community associations, subscribe to the Davis-Stirling Newsletter.

Adams Stirling PLC