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How to Select the Best HOA Vendors and Ensure Great Outcomes

Spencer Brod Sep 23, 2022 11:20:09 AM

One of the most important things every HOA board must consider is its vendors. Partner with the right vendors and your community is set up for great success; partner with the wrong vendors, though, and you add another layer of difficulty to managing your community and relating to your members.

But selecting the best HOA vendors is far from an easy solution. Between balancing price and services, there are plenty of hurdles to overcome when selecting your vendors. In this guide, we’ll discuss how to begin your research into vendors as well as what to look for in your vendors to guarantee success.

How to research HOA vendors

Online Search

Hunt for vendors who fit the bill online. Online business review websites like HomeAdvisor and Angie's List offer users directories of many different types of service professionals, including vendors. Similarly, customer feedback-centered sites like Yelp can be helpful for getting a sense of what kind of work a contractor does. Look for a vendor with a high star rating or positive reviews that speak to their timeliness, know-how, and general professionalism.

Remember to be specific about the type of help you’re looking for in your search terms. If you just need someone to lend a hand with various projects, you can probably get away with a general search like "handyman." If you have a problem with your roof or plumbing, you’ll be better off seeking out a specialist in one of these fields.

These days, many vendors have their own websites where they advertise their services. While perusing a vendor’s website can provide you with useful info, third-party feedback is a more objective way to assess the quality and value of their work.

Referral Network

In addition to online research for local vendors, a great way to find qualified vendors is to work with a professional network for referrals. If you have a management company, they should have a list of preferred vendors or can connect you with vendors that they have worked with in the past.  

Ask the board members or someone in the community for a referral. Prompt them for detailed, honest feedback about the vendors' experience, standards, and performance. Most homeowners will have hired outside help for their property and will therefore be able to make a dependable recommendation.

Online Forums

Read reviews and seek suggestions on community home repair forums. While you’re online, see if the place you live has a community page that you can browse for referrals. Many gated communities and most condominiums have message boards where residents can share details of their experiences with vendors they’ve used in the past. One of these posts could be the next best thing to a word-of-mouth recommendation if you don’t know anyone who might be able to give you a promising lead.

Another option is to go through an app like Nextdoor or EveryBlock, which essentially serve as private social networks for the residents of a given community.

One of the biggest advantages of getting the name of a vendor through a community forum is that the vendor is usually local and has already done work in communities similar to yours.

Contact a local vendor company for quick and easy jobs. If you just need one or two things fixed and you’re not too insistent about getting a personal referral, consider simply calling one of the vendor services in your neck of the woods. Most towns have at least a couple of businesses that loan subcontracted workers out for small projects, like replacing broken tile or fixing a damaged deck railing.

Make sure that the company offers the service you need before you call. Vendors are trained to perform various tasks, but may not have the expertise needed to tackle more specialized projects, such as building a carport or rewiring an electrical outlet.

Local Stores

If you’re not having any success with online resources, head to the nearest hardware store or home improvement center and take a look at the bulletin board posted near the entrance. It’s not uncommon to find flyers and business cards for independent contractors looking for work in these places. Store employees may also be able to offer recommendations for vendors they've supplied in the past.

Don’t forget to take a tear slip or jot down the person’s contact info so you can get in touch with them later if you decide to interview them for the job. Before you hire a freelance vendor, plug their name into a search engine to see if you can dig up any reviews from former employers.

Some larger home improvement centers like The Home Depot even offer in-house vendor services for select projects through their Home Services department.

In every instance, check your prospects for past or pending complaints. In the U.S., it’s possible for employers to report contracted workers for scams, lawsuits, and other grievances through the website of the Better Business Bureau. Do some research on each of your leading candidates prior to submitting an estimate for your project. If any major complaints are registered against them, consider going with another choice.

Hiring a vendor without doing your due diligence could set you up for a major headache, or even leave you vulnerable to theft.

What is the minimum number of bids that the HOA should seek?

The usual number has traditionally been three bids, as two bids could be wide apart and leave the HOA in a quandary. Is one bid just a low ball or is the high bid really gouging?

Once the HOA has secured a third bid, it is far easier to evaluate the other two. Of course on small jobs, it might be worth taking the first proposal if it looks reasonable because securing multiple bids is time-consuming.

Once you've rounded up a few different vendors who you think might suit your needs, have them come to the HOA to bid on your project in person if possible. Not only will this allow you to compare pricing and find the rate that best fits your budget, but it will also give you the chance to meet with them face-to-face, discover how punctual they are, and get a feel for their professional etiquette.

Keep in mind that there are more factors involved in shopping around estimates than just price. The lowest bid will usually be the most attractive, of course, but you may ultimately be more inclined to work with the person who was the timeliest and most reliable.

A thorough, detailed bid is often a sign of competence and integrity. If a vendor takes the time to break down the cost associated with each step of the project, it shows that they care about doing things the right way and not just trying to gouge the HOA.

Set up interviews with potential vendors

Interview the candidates personally. Set up a time to meet with the vendors who have caught your eye and discuss the project you’re hiring them for in-depth. Like the initial bid, this is a good opportunity to evaluate your prospects on both a personal and professional level while ironing out all the important details of the job.

Come up with a list of questions to ask the vendor that will offer you a better idea of their qualifications. For example, you might ask them how many employees they have, how long they’ve been in the business, or what their greatest strengths are.

Ask the vendor to provide a list of references. Any vendor who's worth their salt will be able to produce testimonials from satisfied clients who they've done work for previously. Vendors who come prepared with their own set of references are usually a safe bet. If the person was also recommended to you personally by a friend or loved one, all the better.

It's also a plus if the vendor can show you photos of similar jobs that they’ve completed in the past.

Be wary of candidates who decline to give out the contact information of their references so that you can speak to them yourself. It may mean that they have something to hide.

Does the vendor carry insurance?

Find out whether the vendor you’re considering is properly insured. Vendors aren’t typically required to be licensed, and bonding is usually only necessary on major projects with hundreds of thousands of dollars of work like a new roof in a condo complex.

However, you always want to ask your vendor to supply proof of insurance upfront. At the very least, some form of general liability insurance is crucial. Worker's compensation is also a must if the vendor has other employees working under them.

Be sure to review your candidate’s insurance policy along with the rest of their paperwork. A good general liability insurance policy will offer the contractor coverage for at least $1 million per claim.

When it comes to hiring a sole proprietor, sometimes they do not carry general liability insurance, so should the HOA refuse to do business with them? Well, it depends on the work.

If it is general handyman work like painting or landscaping, then it is probably alright as long as the HOA is carrying its own liability insurance to protect the HOA from any cost of a claim resulting from an accident that occurs on the HOA’s property.

Detail the scope of the project in writing

Once you’ve settled on a candidate, it’s time to draw up a formal contract to seal the deal. Make sure the vendor is willing to sign a detailed written contract that explains the details of the job. This is called the project scope and should include the number of materials and a description of the work.

Go over your written agreement with your vendor to recap and confirm each of the main provisions, including the general timeframe, estimated cost, and payment procedures. Don’t sign the contract until you’re satisfied with the scope and the terms.

You should always request a contract if it’s your first time working with a particular vendor, even for small weekend jobs.

Your contract essentially says that the vendor promises to perform a set of agreed-upon duties in a specified time for a predetermined sum of money. A record like this can come in handy in the event that a dispute arises between you and your vendor.

Ask about vendor warranties

Lastly, it’s crucial to see if the vendor offers a warranty on their services. Some vendors extend HOA’s the benefit of a written warranty or similar guarantee in addition to the terms of a formal contract.

This means that if the problem reoccurs or something goes wrong with a repair job within the specified warranty period, the vendor will come back and fix it at no additional cost. If the vendor you've chosen to work with offers a warranty, that will give you more confidence, especially if the vendor is a mid-size or larger company.

One-year warranties are standard for most remodeling jobs and other large-scale projects. Warranties are a sign of good faith as much as they are a way of attracting business, and are generally useful for distinguishing honest contractors from less-than-honest ones.

Select the Best HOA Vendors With Confidence

Here at HOA Management Solutions, we pride ourselves on providing excellent service throughout all facets of HOA management, including vendor relations. Want to learn more about our ability to help your community? Reach out today for a free consultation.