When you work in an HOA, no day is the same. The daily meetings and consistent day-to-day obligations can sometimes become overwhelming. In addition to handling large-scale responsibilities such as landscaping, vendors, and even home maintenance, giving yourself time for anything else becomes limited. In these situations, hiring a contractor can sometimes be the best solution. Sounds easy, right? Considering you’re responsible for the care of homeowners, this may seem easier said than done. As a way to ensure that your HOA is in the best of hands, let’s explore some areas of importance that every HOA should consider before they hire a contractor.
The primary reason hiring a contractor is beneficial to an HOA is strictly due to help reduce the risk of liabilities. In most cases, a contractor and an HOA will have a formal written waiver that prohibits the contractor from putting any liability on the HOA. In addition to this, hiring a contractor requires less paperwork and financial hassle than hiring an employee. As a rule of thumb, be sure to reference your HOA governing documents, along with any IRS official forms that may be required by both the contractor and the HOA.
Obtaining a written contract between the vendor and the HOA is essential to ensuring the HOA protection itself. In most cases, written agreements usually contain a cost of labor breakdown, termination options, methods of payments, warranties, and the scope of work. Once a contractor is considered hired, we recommend advising your HOA legal counsel with any drafted contracts or proposals before making a final decision.
Due to the many liabilities that HOAs can encounter, we suggest hiring vendors that are licensed, bonded, or work as insured contractors. This will ensure the HOA's protection against any property damage or injury.
When starting any project, the HOA and contractor should distinguish the scope of work so that all proper steps are established to complete the project. Initially, the work size is considered to function more as a request for a proposal process, which will be integrated into the contract.
In any situation that an HOA is looking to hire a new vendor or contractor, we recommend doing a thorough reference check. A few examples may include: requesting up to 3 references from either a former or current client, researching online reviews, or social media. An HOA may also consider referencing their Better Business Bureau, which should contain a clear rating of the contractor's or vendor's current business state. Here are some questions to consider asking references:
The discussion of the cost will be a vital part of the process. When searching for the best rate, we recommend researching quotes from at least 3-5 vendors. Although it may come naturally to select the lowest rate, going this route may not always be the best decision. As they say, “you get what you pay for” will oftentimes come with major risks that can create more financial stress and headache in the end. Vendors that offer lower-cost rates can sometimes mean less experience and a history of shoddy work. In this situation, always perform a background or reference check to prevent your HOA from being put at risk of any poor outcome. As an added suggestion, request the contractor or vendor to provide you with visual examples of past work that may relate to their asking cost.
It’s quite common for vendors to have a product preference. In some situations, a vendor may recommend specific products strictly due to their crew's familiarity and past success from former clients. Be aware that if a vendor offers only one brand or a specific type of product, an HOA may end up putting themselves at an increased financial risk. What’s suitable for the contractor may not always be best for the HOA. As a solution, we recommend asking the vendor or contractor if they offer multiple products or would ever consider including other types of developments outside their main list. This way, your HOA can compare the value and financial liability of each product.
Quality communication is key to hiring a valued contractor or vendor. Regardless of the type of project, a contractor should be professional and available to answer questions at all times. Before initiating your project, provide the contractor with a guideline on who and how to communicate with specific community members. Include a list of phone numbers and emails and a 24/7 emergency contact number in the situation that urgent communication is needed.
When hiring a contractor, we recommend creating a checklist that ensures all proper documentation is collected from every hired contractor. Depending on the HOA and state, the following are standard documents that are often requested from the contractor:
It may seem easy to hire the first contractor that your HOA board may recommend. Or even better, an HOAs friend of a friend. Although the person may come highly recommended, we suggest taking the time to interview at least two to three new unrelated contacts. You may find that working with a new unaffiliated contractor can sometimes keep things more professional and unemotionally tied. When interviewing contractors, treat the interview like any business professional would — with courtesy, kindness, and an open mind. You never know what new ideas they may have to offer your HOA.
When selecting a contractor for your project, the options of professions are countless. Here are a few of the most common types of HOA contractors:
TownSq now offers communities the ability to easily submit architectural projects through a new feature called Arch Request. This new feature allows residents to submit their DIY or home projects through the app for approval from their HOA or arch review committee.