3 Considerations When Selecting HOA Vendors
There are many services provided in an HOA community, funded by owners who make up the membership of the association. The owners are responsible for paying dues or maintenance fees to provide for shared amenities, common area maintenance and capital replacements. But how does that money get collected and how are those services provided?
It is the elected Board of Trustees who is responsible for the success of an HOA or community association. The Board often enlists the assistance of a property management firm to facilitate association business on the board’s behalf. But the Board and management company aren’t the ones cutting the grass or repairing the gutter – this is where various HOA vendors come into play.
Whether selecting a vendor for ongoing service such as landscaping or a one-time project such as a roof replacement, picking the right HOA vendor is key. This could be the difference between good and poor workmanship, quick and slow response times and effective or ineffective service.
Below are three tips to selecting vendors to work in your HOA.
Three HOA Vendor Selection Factors
Understanding All Rules Regarding Soliciting Bids
Before advertising for bids, the Board should meet and define the scope of each job needing to be filled. The next step is soliciting proposals from independent firms. It is essential to follow both the rules of the established governing documents of the community and any applicable state laws in this process. It is customary to attain at least three bids for work service. The lowest or highest bid price is not always indicative of value, and one reason for the Board to define what is wanted and needed.
Verify Contractor Credentials
Before approving any bid, be sure to verify that the individual contractor or firm has shown proof of being licensed, bonded, and possesses liability insurance for those they employ, who may be injured while working, and liability coverage should community property become damaged. The contracted firm should also have compensation insurance for their workers, so the community is not potentially responsible for missed wages. It is also recommended to verify contractor experience and check references of their past and current client work.
Signing A Written Contract
The final step in acquiring an HOA vendor is the written contract. The contract should be typed, error-free and contain with no handwritten sections. Yes, dot the i’s and cross the t’s as to the scope of the work to be done, contract duration, itemized list of all specific vendor costs, and the total agreed-upon price plus tax explicitly stated. The HOA community, and all parties involved, should be named in the contract.
It is usually good for the community’s attorney to review the final agreement before all parties on the dotted line.
If you require any guidance with vendor selection for your HOA community, don’t hesitate to reach out to AR Management, a New Jersey-based property management company. Contact us today!