Managing HOA vendors gets much easier when the board does a few things consistently: give each vendor one point of contact, agree on expectations in writing, keep a simple record of performance, pay on time, raise problems early, and put renewal dates on the calendar. Most associations depend on several vendors at once (landscaping, pool service, janitorial, gate and elevator maintenance, and others), so a little structure saves the board time and keeps contracts, deadlines and invoices from piling up.
This article picks up after the hire. For the selection process itself, including the scope of work, bids, license and insurance checks and the contract, see how to hire a contractor for your homeowners association.
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Start With the Right Vendor
The easiest vendor to manage is one that was chosen carefully. Before you request bids, review the governing documents for any spending or bidding restrictions, write down the specifics of the job, compare at least three written bids (our vendor comparison worksheet puts them side by side), and collect proof of license, insurance and any required permits from each bidder. Do not hire a company that cannot produce those documents, even if you like its price.
Two checks are worth adding for vendors you will work with month after month:
- Portfolio. Ask to see properties the vendor services now, ideally associations of a similar size and type. A landscaper’s work is easy to judge by walking a community it has maintained for a year or more.
- References and reviews. Call the references and ask how the vendor responds when something goes wrong. Online reviews can point to patterns such as missed visits or billing disputes, but a handful of reviews in either direction is weak evidence. Give more weight to what other boards and managers tell you directly.
Name a Single Point of Contact
Vendors get into trouble when five directors and a dozen homeowners all give instructions. Choose one person, usually the community manager or a designated board member, to give direction, receive questions and approve extra work. Ask the vendor to name one account contact as well, along with an after-hours number.
Tell homeowners where to send requests and complaints, and make clear that the crew on site does not take work orders from residents. Anything that changes the price or scope should be approved in writing by the point of contact, within whatever spending authority the board has set.
Keep Expectations Reasonable
It helps to understand a little about each vendor’s business so you know what is fair to ask. Find out how the vendor schedules crews, what seasonal or weather problems it runs into, and how it sets priorities in an emergency. After a major storm, for example, a tree service or roofer may have many clients calling at once, and a client with a less urgent problem may wait.
Ask about emergency pricing and response times before you need them. After-hours, weekend and emergency calls are often billed at a higher rate or with a minimum charge. Get those rates in writing in the contract, along with how quickly the vendor commits to respond to an emergency and to a routine request, and who at the association may authorize an emergency call. That way neither the wait nor the invoice is a surprise. Knowing what to expect also lets you tell homeowners accurately what will happen and when.
Keep Communication Open
Discuss early what you expect, listen to the vendor’s concerns and look for solutions that work for both sides. Tell the vendor about deadlines the board is under, community events, and anything on site that affects the work. If dates or details change on your end, let the vendor know right away.
When the vendor asks a question or raises a concern, answer quickly. If something in the community is keeping the crew from doing its job (a locked gate, cars parked in the work area, a decision the board has not made), the vendor cannot fix that alone, and residents will be frustrated when they see no progress. For larger contracts, a short standing check-in, monthly or quarterly, catches small issues before they become disputes.
Track Vendor Performance
Memory is a poor record, and boards turn over. Keep a simple file or log for each vendor that includes:
- The signed contract, scope of work and any amendments
- Current certificates of insurance and license information, with expiration dates
- Dates of service visits and what was done
- Complaints or problems, when the vendor was told and how they were resolved
- Invoices, change orders and payments
- Notes from periodic walk-throughs comparing the work to the scope
Store it with the rest of the association’s records so the next board can see the history. Once a year, score each vendor against its contract: Was the work done as specified? Were visits on schedule? Did invoices match the agreed price? How quickly were problems fixed? A written review makes renewal decisions far easier and gives the vendor specific feedback.
Pay on Time
You expect the vendor to meet its deadlines, and the vendor expects to be paid on the schedule in the contract. Paying consistently is good business and helps the relationship. Set up a routine: the point of contact confirms the work was done, compares the invoice to the contract and approved change orders, and sends it for payment according to the board’s approval process.
If a payment will be late, tell the vendor as soon as you know. If you are holding payment because work is incomplete or wrong, say so in writing and explain what needs to be corrected. Tying each payment to completed work, and planning recurring contracts into the association’s budget, keeps cash flow predictable for both sides.
Resolve Problems Early
If work is not done the way you expected, say so right away. Finding out what went wrong and why often prevents a repeat. Start with a call from the point of contact, then follow up in writing with the date, the problem, what the contract requires and when you need it fixed. Photos help.
Good contracts set out how problems are handled, so check yours before a dispute and ask for these terms when you negotiate the next one:
- A written notice of the problem and a set number of days for the vendor to cure it
- The association’s right to withhold payment for work that is not done or not done correctly
- Termination terms, including whether either side can end the contract without cause and how much notice is required
- The dispute process, such as negotiation, mediation, arbitration or court
- Who pays attorney fees if a dispute goes that far
If a problem involves safety, property damage or a possible insurance claim, bring in the association’s attorney and insurance agent early.
Plan for Renewals, Contract Length and Amendments
Many service contracts renew automatically unless one side gives notice by a deadline set in the contract. Put every contract’s end date and notice deadline on a calendar so the board decides whether to renew, renegotiate or rebid instead of renewing by default.
Think about contract length before you sign or renew. A longer term can hold pricing steady, but it ties the association to the vendor. A shorter term, or a clause that lets either side end the contract on written notice, makes it easier to leave a vendor that is not performing. Check your governing documents and state law for any limit on how long a contract the board may sign.
Before each renewal, review the performance file, ask for updated certificates of insurance, confirm the license is still active, and compare the price to the market. Rebidding every few years keeps pricing honest even when the board is happy with the vendor.
Handle changes the same way every time. If the scope, price or term changes after the contract is signed, put it in a written amendment signed by both sides, have the board approve it the way it approved the original contract, and file it with the contract. Side agreements made by phone or scattered across emails are hard to enforce and easy to lose when the board turns over.
In California
A contractor’s license and insurance can lapse during a long contract. In California you can recheck the license at any time with the Contractors State License Board’s Check a License search, and you should ask the vendor’s insurance agent for a current certificate of insurance whenever a policy renews. CSLB notes that it is illegal for an unlicensed person to work on a project valued at $1,000 or more in combined labor and materials, or on any project that needs a building permit or uses employee labor, so recheck before approving add-on work as well as at renewal.
Get Help Managing HOA Vendors
A self-managed board can do everything in this article with a shared calendar, a vendor file and one organized volunteer, and for a small community with a few contracts that is often enough. If keeping track of vendors is overwhelming a volunteer board, an association management company is another option. A manager typically handles day-to-day operations and carries out the board’s decisions, which can include collecting bids, tracking contracts and insurance certificates, processing invoices, inspecting work and serving as the single point of contact. That service comes with a management fee, and the board still chooses the vendors and approves the contracts. Our article on what management companies do explains the arrangement in more detail.
You can find more articles on contractors and upkeep in our maintenance and vendors section.
Sources
Other sources: CSLB: What is illegal contractor activity?
This article is general educational information, not legal or financial advice. Laws vary by state and your association’s governing documents control many of these questions, so check with your association’s attorney or another qualified professional about your situation.