Q–The board of directors of our condominium association, on which I serve, has encountered growing concerns about worker’s compensation insurance and other liability issues. Can you provide some guidance?
What documents should the board of directors request from unit owners before authorizing work in the units?
Usually the board does not know about the work until we see workers going in and out of the building. Does the board have any responsibility in these matters? Do we need to add a rule to our documents concerning unit owner notification to the board about work to be done, or should the board consider unit work to be none of its business?
Let’s say a unit owner hires a worker who sustains an injury in the common area of our building, but does not have worker’s compensation insurance. Would that mean the board would face liability for the injury?
I am concerned about workers being hurt in the hallways, the elevator, or on the roof while installing an air conditioner.
Our concern has grown to a point that the board is considering adding worker’s compensation coverage to our insurance policy. Is that a wise decision for the board?
If a contractor has a valid certificate of insurance for our master association, must each individual building condominium association, of which there are 14, obtain a separate certificate before the contractor can perform work on any of the condominium buildings?
It seems that these questions are coming up at most of our board meetings. Can you direct me to any reference materials on this subject?
A–For unit owner work, the board of directors should request a certificate of insurance from the general contractor who is supervising the job.
In addition to naming the unit owner, the certificate should name the association and its board of directors as additional insured parties.
Work done solely within a unit, and not involving common elements, should be documented by an application giving the description, scheduled dates, and identity of all contractors performing services for the remodeling project.
If the owner is removing a demising or support wall between units to combine them, the board of directors should require the owner to sign a license agreement. As part of the common elements, the board cannot convey the demising wall without the unanimous consent of the ownership, so a license to use this common area is the appropriate form. The license will permit the owner to use a portion of the common area for the unit combination; include provisions for the owner to indemnify the board and association for any damages; and require the owner to restore the common area taken if the units are sold as separate condominiums.
Remodeling work in a unit is a concern for the board. Liability may arise if any laborer is injured on the property, damage is caused to another unit, or a resident is injured as a result of the work.
Regarding notification by the owner, Section 29 of the Illinois Condominium Property Act states that a unit owner owning two or more units has the right, subject to reasonable limitations in the condominium instruments, to remove or alter an intervening partition between the units. The owner is required under this provision to notify the board of directors of the work at least 10 days before beginning the work. For non-unit combinations, a reasonable time period is appropriate for the board and management to have notice of contractors at the building and to reserve the use of elevators or other common areas for the work.
Worker’s compensation covers injuries to workmen hired by the owner. The board has general liability concerns for work done in a unit which may result in property damage or injury to another person, including a workman. For these reasons, the owner should provide a certificate before the work starts.
Worker’s compensation insurance is an issue when an association employee or an independent contractor sustains an injury on the job.
The Illinois Worker’s Compensation Act is a strict liability statute, which means it is not necessary for the injured party to establish fault in order to recover damages.
Any person engaged in a business, including the maintenance of a structure like a condominium building, is liable for compensation to its immediate employees; but it also is liable for injuries if the owner directly or indirectly engages any contractor to perform work on the property. An independent contractor may, thus, be considered an employee of the association for purposes of worker’s compensation. For this reason, worker’s compensation coverage is an essential part of an association’s liability package.
A master association supervises common areas surrounding individual condominium associations. Typically, master associations maintain areas such as lakes, a clubhouse, or other recreational facilities. A contractor hired by the master association should have a certificate of insurance for work on the common parcel. The certificate should also name any individual condominium associations for whom the contractor is performing work.
The common areas of the master association are distinct from the common elements of an individual condominium building. For work done within or on the common elements of an individual building, each association should have separate coverage or, preferably, obtain a certificate from the contractor that names each individual association and their respective boards of directors.
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Mark Pearlstein is a Chicago lawyer who specializes in condominium law. Write to him c/o Condominiums, Real Estate Section, Chicago Tribune, 435 N. Michigan Ave., Chicago, Ill. 60611. Sorry, he can’t make personal replies.
