Vendor relationships are about partnership, built on trust that deepens over time. Choose the right vendor-partner and you’ll receive quality work at a reasonable price; make the wrong choice and you might end up with a very expensive legal headache. Your residential or commercial property management company can help you navigate the detailed and time-consuming processes involved in selecting the best vendor, but, before you get started, keep the following key principles in mind.
What to Look for in a Vendor
At a minimum, any vendor from whom you request a proposal should possess all proper and current licenses and insurance. Resist the urge to use a “friend of a friend” without this coverage in place as it can expose your homeowners association–a multi-million dollar corporation–to major liability.
Next, take a close look at the bids you receive and make sure that the scope and contract the vendor is offering matches your request. Look for a detailed list of what is included and excluded from their service. Be wary of vendors who offer boilerplate responses; they might not have looked at your scope of work very carefully, an indication that they might not do a detailed job on the project.
To get a sense of what to expect before you enter into a contract with the vendor, ask to see samples of previous work and personally speak to their references.
Finally, trust your gut. Schedule an in-person meeting with the vendor or their representative and pay attention to the feeling you get when you’re face-to-face. Mixed feelings are generally an indicator that you’ll receive mixed results.
Know the Difference in Recommendations from Your Management Company
Your residential or commercial property management company can connect you with vendors with whom they already have a good track record, but this connection should never come at the expense of the trust that you have built between your HOA and your property management company. Remember that the management company has a responsibility to look out for your best interests first.
Some management companies have “marketing agreements” in place with certain vendors, which is simply an elaborate way of saying that there is a financial agreement between the management company and vendor. This type of arrangement presents a potential conflict of interest on the part of the management company and inhibits their impartiality.
Approved vs. Preferred Vendor List
Many property management companies have an Approved Vendor List, which means that the vendor meets all proper licensing and insurance requirements. However, some management companies have a Preferred Vendor List, which means that there are marketing agreements in place with those vendors.
Although all marketing agreements should be disclosed by your management company, ask your management company to go into detail about the types of vendors they recommend and ask explicitly if they have any marketing agreements in place or if they receive any incentives for recommendations. If so, be aware that the management company is not necessarily looking out for what’s best for your community.
What to Expect from Your Property Manager
Your property management company should perform the role of an impartial, trusted advocate working on behalf of your HOA. Since management companies often share information about quality vendors, feel free to ask for your property manager’s experience with and opinion of a particular vendor. They should help obtain three separate bids from vendors that would be appropriate for the job, without any personal vested interest in your choice.
Your management company should also analyze and compare the bids you receive, to help your association gain a clearer understanding of what you’ll be getting when you make your final decision.
Your management company should manage the day-to-day operations of the project and ensure that the job is complete on time and within budget. If there are any disputes or conflicts, your management company will help you resolve the issue, by moving on to another vendor or undertaking additional dispute resolution tactics if necessary.
Additional Tips for Choosing a Vendor-Partner:
- For big-ticket projects (those with budgets exceeding $5,000), obtain three bids, review them closely and always schedule a face-to-face meeting with the vendor
- For smaller projects ($1,000 or under), save time by skipping the triple-bid process and working with vendors you already know and trust. By not over-scrutinizing and having faith in their work based on your track record with them, you’ll continue to foster a beneficial long-term relationship.
- Talk to your management company. If you are dissatisfied with the way your property management company is working with your vendors, let them know. If they become defensive or resist your feedback, consider switching to a new manager.
Choosing a vendor-partner for your community is a task that should not be taken lightly. It’s typically beneficial to enlist the help of your property manager to identify, select, and hire new vendor-partners. As your partner in maintaining your property and property values, your property management company should be available to assist you throughout the vendor selection process and provide any advice.