Arizona Practical Questions Archive
Recently, incidents have arisen in associations where owners are being defrauded and scammed by “contractors” using another legitimately registered contractor’s license number. The particular contractor at issue actually advertised services in the association’s directory, using another contractor’s license number. It is important to remember that an owner may try to hold the association responsible for the actions of these fraudsters.
Therefore, if the association has a newsletter, website, weekly newspaper, or other periodical in which it allows third parties to advertise, it should exercise the proper control over what appears in the periodical or on the website.
First, the association should make certain that it has exercised due diligence to confirm that the advertiser is legitimate. Associations can never guarantee the accuracy of an advertisement since the information is subject to change between the time the association receives the ad and when it is printed or posted. However, the association should undertake a good faith effort to confirm that the information provided by the advertiser is accurate as of the time it was received.
Second, the association should always include a prominent disclaimer in the periodical or on the website which plainly states that the association is not responsible for the accuracy of the advertisements included or for any damages resulting from readers or website users utilizing the advertiser’s goods or services.
Finally, the association should never place its faith in verbal assurances from a vendor. If the association is outsourcing its advertising, periodical printing, or website development to a third party, it should always ensure that the vendor has indemnified the association for any damages that may result.
Following these general principles will help the association to make sure that its bases are covered when allowing third parties to advertise in media under the association’s control. If you have any questions or would like assistance with your association’s advertisements, please contact Jason Wood at 480-922-9292.
The information contained in this Homeowners Association Tip is for informational purposes only and is not specific legal advice or a substitute for specific legal counsel. Readers should not act upon this information without seeking professional counsel.
© Ekmark & Ekmark, L.L.C. 2011 – reprinted at HOA Pulse with permission
