No matter what type of community you live in, you can bet your bottom dollar – or your association’s – that there will come a day when you will need to hire a contractor.  And when vetting a vendor, it’s reasonable to expect for your vision to be executed on time and on budget.

When hiring a contractor, keep in mind that it could go in one of two ways; you may find it is one of the best decisions you ever made, or one of the worst. No one has time to deal with the inconveniences and hassles of bad workmanship, which will only cause a whole lot of headaches and not a lot of progress on the work that needs to be done. A great contractor can balance having in-depth knowledge of their craft, providing legendary customer service, and being fiscally stable. Though the best property management company will help you vet these companies and keep them on track, here are some important things to consider so you can ensure your contractor is the best for the job.

Get complete information.

Check your references. Be sure to get complete company names and the personal names of the people you will be involved with.  

Licenses do matter.

Licenses are essential. Be sure to check that your contractor is listed with your state licensing board and is in good standing.

Schedule it.

Implement policies that include time cancellation provisions and liquidated damage provisions into your agreement. Some contracts may alter the schedule and invite extensions that may delay payments to subcontractors. Integrating specific time and dates of when you expect the work to be done will alleviate any issues with this.

If it seems too good to be true, then it probably is.

Be aware of desperate contractors who just want the money. Sometimes a low price is not an indicator of a good deal, but rather could mean that very low-grade materials and/or unskilled labor will be used.

Watch the frontload.

If the initial payment requested seems out of proportion with the work completed up to that point, be sure to address it. Evaluate the situation and determine what is fair. If your contractor wants a large payment up front, then they could be cash strapped.
 

Know the details.

Requests specs for all materials that are being used and include them in the equipment provisions.

Be explicit when it comes to numbers.

Payment terms should be clear and the total dollar amount should be specified. Make sure you understand how and when payments are due. It’s important that the payment schedule strikes a balance with the percentage of work completed. There needs to be a sufficient retainer so that the contractor has a strong incentive to finish the job, to include all punch list items.
 

Hold them equally accountable.

Demanding payment and performance bonds will help protect you. If the contractor doesn’t hold up his end of the deal, you want to be sure that financial disincentives are in place.

Insurance reassurance.

It’s crucial for your contractor to be insured. Ask for proof of coverage and make sure that proper levels of coverage are in place before starting any job.

Don’t be naïve.

What is the worst possible case scenario? Determine who is liable for what. Have processes in place when unexpected repairs come up. Establish who will notify whom and what the proper chain of command is. Stipulate who will be responsible for damage if it occurs. You’ll also want to be clear on the jurisdiction and venue where the contract will be enforced. Cover the basis should you fall into a legal dispute.  


Get a warranty or some kind of guarantee.

Get it in writing. Any warranty or guarantee that you have agreed upon should be in black and white.

Provide supervision.

Set clear expectations as to who will be monitoring progress on the association’s side of things and who will be supervising the labor process. You may need to hire an engineer to monitor the work as it progresses.

Clean up is part of work.

Allocate a space where contractors and their sub-contractors can store their materials and tools. You should also mandate how the work site should be maintained to ensure you are causing the least amount of interference to the community’s residents.  Ask that you be provided with a map or a description of the work area so debris and tools don’t spill over to other parts of your community.

Define responsibilities.

Who is responsible for permitting and scheduling inspections? Make sure to include any city or county inspections into the work flow schedule.

Get it in writing.

Never enter into an oral contract. Although   written contracts can prove to be tedious, they will save you the trouble of disputing verbal agreements later on. Make sure your association’s legal department is involved in preparing a detailed contract to protect the association’s interests.

A construction project in your community is disturbing enough for residents – Don’t let the hassle of a bad agreement make it any worse. To find out how a great property management company can help you avoid costly pitfalls, contact FirstService Residential, North America’s leader in residential property management. 
Wednesday October 28, 2015