Repairs, general maintenance, grounds keeping—running an HOA means hiring many different people to keep your community nice and safe. While there are pros and cons to hiring internal employees for certain jobs, it’s common for associations to contract out a lot of the work.
Be Thorough When Evaluating Candidates
Selecting the right contractor (and the right bid!) is a detailed process. Take your time to thoroughly vet candidates for their quality of work, relationships with other customers and other contractors, and whether they fit with your association. One way to find solid vendor choices is to ask for recommendations from other vendors, nearby associations, or your residents. Ask people you trust, so you already know the contractor is reliable.
Once you have a few potential candidates, conduct in-depth interviews in person or over the phone. Have a list of preferred certifications or qualifications, as well as experience you’d like your contractor to have. Depending on the scale of the project, ask about subcontractors—who they use, what projects they’ve worked on before, etc. Get multiple estimates (at least three) and make sure they are comparative. These bids should be detailed so you can see where they differ and whether they need to be revised.
Knowing ahead of time the exact specifications of your project, the desired outcome, and the available budget will help you narrow down the right bid.
Require a Detailed Contract
No work should be started before the contract is signed, and the document should be as thorough as possible. Any and all costs, estimates, requirements from you, rules about when and where work can be done, approved materials, deadlines, and payment terms should be included in the contract before you sign. If you are purchasing insurance or having the contractor add your HOA as an endorsement on their policy to cover future liabilities, that should be clearly stated, too. It’s a good idea to have your contract looked at by your legal counsel before you sign.
Items all vendor contracts should include:
- Parties
- Scope of Work
- Payment Schedule
- Insurance
- Indemnity
- Time for Performance
- Permits and Licenses
- Warranties
- Mechanics Liens
- Termination Clause
- Evergreen Clause
- Escalator Clause
- Alternative Dispute Resolution
- Attorneys’ Fees
Read more about these items in our Vendor Contract Checklist.
Protect Yourself and Your Community
Depending on the scale of work to be done, you’ll need to look into insurance and permits. You should require a certificate of insurance from the contractor before any work is begun. Another way you can protect yourself is by carrying worker’s compensation insurance, in case you’re sued by a contractor or subcontractor who gets hurt on your property.
It’s also highly recommended, as mentioned above, to have the contractor add your HOA to their policy as an endorsement. This will shield your association from legal issues if someone is injured due to a mistake made by the contractor. Any such agreement should be included in the contract, and should cover completed work as well as ongoing work.
Ask the Experts
Dealing with vendors and contracts can potentially open your HOA up to a host of legal and financial issues if not done meticulously. Reaching out to an association management company to help navigate these situations can put your mind at ease. Contact us to see how we can connect you with dependable contractors, assist with bidding and contract deliberations, and make sure your work is done quickly, adequately and without breaking your bank.