Having the right vendors can make a big difference in how easy it is to run your property owners’ association. Good vendors can help improve quality of life as well as property values for your members. In contrast, the wrong vendors can harm your reputation, blow your budget, and require so much supervision that you might as well do the work yourself. A vendor might even cause your association to incur significant liability or financial losses if things go really wrong. As the property manager, you could be held responsible for hiring a bad vendor. Here are some ways to avoid mistakes so that you select the right vendors for your property owners’ association.
Improve the Odds of Making the Right Choice
Selecting a vendor to help maintain or improve a property is never without risk. But you can improve the chances of getting great work at a fair price by taking time to select your HOA or condo association vendors with care.
Don’t hire any vendor as a personal favor. That includes choosing a vendor because they are a friend, family member, or business partner. If you personally or indirectly benefit from a vendor relationship, chances are that the arrangement is going to look shady to the board of directors. Avoid even the appearance of self-dealing by choosing vendors based on objective criteria.
Here are some criteria to consider:
- Length of time in business and experience doing the type of work you need done
- BBB rating, online reviews, verified customer references
- Overall local reputation including recommendations from third parties (who don’t stand to benefit)
- Proper certification, licenses, bonding, and insurance that meet industry standards and the board’s requirements (be sure to all subcontractors are covered as well)
- Clear communication and responsiveness throughout the bid process
- Willingness to do a site tour on the property to clearly understand what’s needed
- Clarity of scope of work so you know what’s being delivered and the relevant timeline/milestones
- Fairness of contractual language and protection of the property owners’ association’s rights (have the association’s attorney review agreements)
- Ability to work as an independent contractor rather than an employee of the HOA (in accordance with the IRS definition of these categorizations)
- Reasonableness of pricing for the value received (make sure you are comparing “apples to apples” with other bids in terms of scope)
- Ability to be proactive and creative with problem solving
- Good QC processes (check lists, site visits, supervisor walk throughs, etc.) and a high level of accountability
- A strong, enforceable warranty for labor and materials
When Should You Start the Selection Process?
If the property owners’ association board requires putting certain contracts out for bid every year, start the RFP process at least a couple of months before the deadline. Also, be prepared for the unexpected. Even though emergencies by their very nature can’t always be predicted, you can reasonably foresee that you’ll need help fast from time to time. For example, a restoration company that handles fire or water damage isn’t something you need every month. But you’re likely to need them at some point—and you’ll need them fast. Select this type of vendor before you have a need so you can vet them thoroughly.
Red Flags to Watch Out for with HOA or Condo Association Vendors
Sometimes, things just aren’t quite right. Keep an eye out for these issues. They can be signs of future trouble.
- Pushing “limited time offers” or high-pressure sales tactics trying to rush a decision
- Wanting more than 20% of the total job cost up front
- Charging far less than any competitors (this may indicate they aren’t quoting the same scope, or they will cut corners on quality in materials and workmanship)
- Being unable to provide documentation for licenses, insurance, etc.
- Hiding fine print in legal contracts that protect the vendor at the expense of the property owners’ association
Don’t Try to Do It All Alone
Selecting and maintaining a strong network of vendors can seem like a full-time job. Ardent Residential can help you manage this load with our property management services. Take advantage of our strong ecosystem of qualified vendors to maintain your community. Contact us here to learn more to select the right vendors for your Property Owners’ Association.