If you’ve ever worked with a contractor, you know it can go one of two ways: either really well, or like a total disaster. If it’s the former, the contractor will deliver work on time and on budget (and hopefully, beyond expectations). If it’s the latter, you were probably faced with delays, unexpected change orders, and worst of all, substandard workmanship.
So how do you make sure you only get the good stuff? Well, there are no guarantees – even great contractors fall on hard times and have to delay work or issue change orders to accommodate unreliable cash flow. But for the most part, there are some steps you can take to avoid this worst-case scenario.
Below you’ll find some tips designed to help you minimize your risk, and maximize the likelihood that you’re contracting with a reliable firm – and getting the work you expect, when you expect it, at a price that comes with no surprises.
  1. Make sure there’s no John Doe. Be picky about getting the full company names and complete individual names of everyone involved with your project. You’ll be checking references, so this info is crucial.
  2. Go with a licensed company, period. This is simply good sense. But in instances where your project requires two or more trades, the law requires your contractor be licensed (according to Nevada Revised Statute (NRS) 624.215). Now, there are two types of licenses to look for: A B2 licenses enables a contractor to perform work on a structure that does not extend more than three stories above ground and one story below ground. The B classification permits the contractor to perform work on any structure, regardless of stories.
  3. See if your community manager can help. If your association has partnered with an excellent community management company, then they’ll be able to help you vet your contractors. Some firms, such as FirstService Residential in Nevada, have subsidiary contracting firms that are battle-tested, proven, and fully licensed. What’s more, these companies are experienced in dealing with the specific requirements of conducting work for associations.
  4. Beware the low-ball. Got a surprisingly low bid? Don’t celebrate yet. This could be the sign of a contractor who’s desperate for work, or who plans on using substandard materials or unskilled workers.
  5. Get a timeline. A firm schedule is essential to good work. Beware of the contractor that will fudge a schedule or institute delays because they’re trying to make payments to subcontractors. Make sure your contract has time and cancellation provisions, including liquidated damage provisions, and be clear about when you expect the workers to show up to the job.
  6. Watch the frontload. Sometimes, when a contractor is low on cash, they’ll bill you for an initial payment that seems out of proportion with the work completed at that point. Always make sure that payment installments commensurate with the work that’s been done at that point.  
  7. Accountability rules. Be firm about holding your contractor to the letter of your agreement. Put financial disincentives in place to help make sure the contractor fulfills his end of the bargain. Don’t be afraid to demand payments and performance bonds.
  8. Get concrete on the numbers. Don’t leave anything up to question when it comes to total dollar amounts and payment terms. Again, make sure the payment schedule matches the completion of work to that point. Hold enough money back so your contractor has the financial incentive to finish the job right, including all punch list items.
  9. Be over-informed. Frankly, you can’t have too much information. Get specs on all of the materials your contractor will be using. Be aware of provisions made for tools and equipment as well.
  10. Keep it clean. If a job is to last several days, you don’t want to subject your residents to unsightly construction mess. Be specific about where workers are to store their tools and materials. You should require that the work space look orderly, even when the job’s in progress. Get clear on the precise work area so debris doesn’t end up in parts of the community that should go unaffected by the project.
  11. Check the insurance. Your contractor should provide you with proof of insurance, with the appropriate levels of coverage, before the job begins.
  12. Know the worst-case scenario. Sometimes the worst happens, and you’ll want to be prepared for it. Define specific liability for each party involved. Make clear the process for notifications of more repairs. And make sure you’ve identified who will be responsible for damages, if any, in black and white. Finally, make sure you’re clear on the jurisdiction and venue where the contract will be enforced, just in case you need that information during a legal dispute.
  13. Get a guarantee. Don’t settle for promises. Get your warranties and guarantees in writing.
  14. Supervise. Get a clear understanding on who will be supervising the job on the contractor side, and who you’ll task with monitoring progress on the association side. If you’re engaging in a large project, you might want to hire a consultant or engineer to watch over things on your behalf. Some firms, like FirstService Residential in Nevada, have affiliate companies that specialize in professional project consulting.  
  15. Define who does what. Your project will most likely require permitting and inspections from your city or county. Make sure you define who is responsible for pulling these permits and scheduling the inspections.
  16. Take your best shot. Photos are an important part of the process – both before and after. Not only will they protect you should things get litigious, but photos are also great to share with residents in your association newsletter.
  17. See for yourself. Your contractor should take you on a guided tour of the work they’ve done in your community. That way you can double-check work completed against the to-do list you began with.
  18. Don’t settle for talk. Never seal the deal with a word and a handshake. That’s a recipe for disaster. Get an explicit agreement, in writing, every time. Your association’s attorney should be involved with the development of the contract and be on hand for a review before signing, too.
A job well done starts with an agreement that’s done well. Follow the tips you’ve read here and you’re sure to avoid plenty of potential hassles and headaches.

To find out how a great community management company can help you avoid costly pitfalls, contact FirstService Residential, Nevada’s leader in community management.
Monday May 23, 2016