A large part of running an HOA is hiring contractors. If your board doesn’t do their homework, your community could end up pay more than you should. Before hiring or renewing a contract with a third party, make sure you get a competitive bid. Not only will this help ensure quality work is done, but your budget will thank you.
Word of Mouth
Start your search based on good reviews you’ve heard from other HOAs or board members. Make a list of three or four independent contractors and schedule quotes. Most contractors offer free quotes, so don’t fall prey to paying for one.
Scope of Work
Establish a clear scope of work and expectations as a board. Make sure contractors know what needs doing, the timeline, and expectations during the quote process.
Budget
Before meeting with the contractor, establish a budget. You may not know the exact amount your project will cost, but your board should know what your HOA can afford to spend. Be clear with contractors about budget.
Licensed, Bonded, and Insured
Make sure your HOA hires someone who is licensed, bonded and insured. A stand up contractor will almost always provide the information upfront, but if they don’t, ASK. If they push back or avoid the question, move on to a different contractor.
Rule of Three
We always encourage our clients get three bids. Getting bids can be time consuming, but always shoot for a minimum of three. This gives your board a good idea of how prices and services will vary, and then your board can make the best choice.
Low Ball Bid
Don’t let a low ball bid lure you too quickly. Often a really low price isn’t a sign of a good deal, it a sign of an inexperienced contractor, or someone who doesn’t carry insurance, a license or bonding.
Written Contract
Before hiring anyone, make sure there is a written and signed contract that outlines scope of work and states the agreed budget/cost of work.
Conflict of interest
Last but not least, always make sure that there isn’t a conflict of interest when you hire someone. For example, don’t hire a board member’s landscaping company just because it’s easy or your board feels pressured. If a board member’s company ends up being the best contractor and within budget that is fine, but they need to be vetted just like anyone else.
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Every community will need to hire contractor at some point. It could be for legal reasons, or something as simple as lawn care. As the board it is your responsibility to make sure who is hired to do work for the HOA is properly vetted and the cost is budgeted for. Working with contractors can be simple and easy if you do the legwork ahead of time to get a competitive bid. If you need help with getting bids for projects or working with vendors, at Spectrum we are happy to assist in any way!
