How to Manage Electricians for a Homeowners Association blog image

How to Manage Electricians for a Homeowners Association

Regardless of the size of your community, the HOA will have a lot to do when it comes to electricity needs. Any power issues can impact many sources that provide security to a community. For example, streetlights, security systems, power gates, and landscape lighting all rely heavily on electricity to work effectively.

The larger your community and the more facilities you have, there is an even greater demand for consistent electricity and well-maintained systems. Many homeowners choose to live in HOA communities because they want a safe, secure neighborhood for their families. Any interruption in your electricity could significantly hurt the security your community normally offers.

How a Contractor Helps 

Many HOA communities have an electrician contracted that works directly for the property. By doing this, they can save time and money while getting problems solved quicker. If they needed to search for an outside vendor every time something went wrong, the costs could be extreme.

According to the agreement, the hired contractor typically responds within a specific timeframe and makes any necessary repairs to emergency electrical issues. They are also responsible for the regular maintenance and upkeep of designated projects, including all the security features on the property.

Having the company do regular inspections and repairs, bi-weekly or monthly, makes maintenance much more manageable. As a bonus, many companies will help the HOA with their overall electricity needs. After evaluating the property, they will suggest ways to save on electricity, such as solar power or other energy-efficient solutions.

If the board wants to pursue their ideas, the company will work with the HOA to create and execute a specific plan.

Hiring a Contractor

The board will want to hire a contractor who will provide the best service for their needs. But the board also needs to be concerned with liability, particularly when the work involves something as complicated and potentially dangerous as electricity.

Every contractor submitting a bid for the contract should have the following documents ready, which include: 

  • Liability Insurance
  • Surety Bond
  • Workers’ Compensation
  • Insurance
  • State Licenses
  • Business License
  • Permits

Let’s go into a little more detail on licenses and insurance. This is often overlooked but is extremely important for your HOA. The board should independently confirm the contractor has the necessary permits or licenses before beginning any work on the property. 

In many states, the law dictates that if the board hires an unlicensed contractor, the board is now the employer of that worker. And if that worker injures themselves on the job, the board is now the employer for that injured worker. This is true whether the board was aware they were unlicensed or not. Even if the contractor lies about their licenses, the board is responsible. 

And without worker’s compensation insurance, there isn’t a limit to the damages an injured employee can claim. The HOA would be liable for those damages, which could require special assessments on the homeowners to help pay these unforeseen costs.  

If the contractor has licensed, but uninsured workers, the HOA and the company could still be dually responsible for injuries in some cases. An easy way to avoid this risk is to see a copy of the Certificate of Insurance before the vendor even steps onto the property.  

Comparing Companies

Once you have found some companies that meet the minimum requirements, including being fully licensed, insured, bonded, and anything else needed, it’s time to get more information.

Try to compare at least three contractors, even if the association has used one in the past. Make sure there aren’t any conflicts between board members and the vendors being considered.

Your three bids should ask for the same information from each company and describe the HOA needs in the same way.

Common questions to ask are:

What is their background and experience in this field?

Did they do apprenticeships in addition to formal training?

How do they screen their employees before hiring?

Do they have minimum requirements each employee must meet?

What types of projects have they completed in the past?

Can you provide a list of three to five references from previous jobs?

Once you have all these details from all the companies submitting a bid for the contract, you can quickly compare their work.

Reviewing Bids

Once the bids are in hand, you can weigh all your options. The top consideration should be the quality of work and the costs. According to the HOA’s annual reports, you will also need to keep in mind the allotted budget for this type of contract.

Budget pressure can make choosing the cheapest bid more appealing. But basing your decision solely on the lowest bid usually leads to problems that can cost you more long-term. It’s critical to weigh the cost, experience, and quality of work.

Remember that the cheapest is not always the best, and the most expensive doesn’t guarantee the best work. When considering all the facts, use the references to determine how other clients felt about each contractor’s work ethic.

Another essential element to weigh in your decision-making is how they plan on delivering all the promises they make, especially when it comes to emergency response time.

Ask about any warranties or guarantees they provide for their services and ensure that they stay on top of any changes to the guidelines of the National Electrical Code (NEC).

Contracts

When hiring any vendor, particularly electricians, you need a written contract that an attorney has reviewed and approved. A contract is necessary to protect the HOA, community, and contractor. Everything should be clearly outlined and agreed upon, so there are no conflicts later about what was verbally agreed.

Any negotiations must occur before any work is started and should be included in the contract. Both parties must agree on the final cost and agreed upon response times for emergencies, maintenance, contract length, and other repairs. If anything changes, the board should draw a new contract that reflects whatever has been amended.

These contracts usually include a scope of work, deadlines for completion, cost of the work, options to cancel the agreement, and language to protect you from damages.