HOA vendor contracts: 7 key tips

Does this scenario sound familiar? You and your HOA board meet with a potential vendor. The vendor sounds great, so you bring them on board immediately. Unfortunately, after about a month, you end up in a dispute. Whether it’s in your Nevada homeowners association or in a neighboring community, this is a common tale among HOAs. The good news is that HOA vendor contract disputes don’t have to be a “necessary evil.” Follow the seven tips below to help avoid conflicts with HOA vendor contracts before they start.

Seven important tips to avoid HOA vendor contract conflicts 

1. Select the right vendor

   Before anything else, make sure you choose a solid vendor with proven experience and proper licenses and insurance. Choosing the right vendor typically starts with your community management company. They should have a database of preferred vendors who they have worked with or have vetted for you. In addition, check with your local Chamber of Commerce or Better Business Bureau to learn more about the company.
    

2. Get everything in writing

   This may be seem like a no-brainer, but it is absolutely crucial that all additional services or requirements be included in the printed HOA contract. Do not make the assumption that things are “understood” if you’ve discussed the terms verbally. That’s why it’s especially important to demand to see all of the terms in writing, no matter what stage of the contract process you’re in.
    

3. Ask questions

   Clarification is king when it comes to contracts. That’s why it never hurts to ask questions during the process. Don’t make an assumption about your contract based on terminology you don’t understand. Instead, work with your HOA management company to make sure you understand the contract language.
    

4. Don’t go it alone

   Make sure you review contracts with your management company, fellow board members and committee members. Someone in your association may have experience regarding a specific area of the contract, and if you go it alone, you may miss out on those insights.
    

5. Talk to the experts

   You’re probably not an HOA contract analysis professional. Whether you are or you aren’t, you should seek out the expertise of a professional before you sign. This may include your HOA attorney, insurance professional and/or accountant. Taking this extra step may save you from unnecessary disputes and potential contract issues down the road.
    

6. Seek out former customers

   Word of mouth goes a long way, for better or worse. And in many cases, the only way to measure a company’s reputation is by reaching out to former clients. Your approval process should include time to speak with former and current customers. They will let you know if that particular vendor adheres to a contract as written, or as imagined.
    

7. Be prepared for the next contract negotiation

   Whether you are part of a single-family home community in Henderson or a master-planned association in Reno, your board likely deals with multiple vendors and multiple contracts. That’s why it’s helpful to have a master calendar of all contracts and their expiration dates. An experienced management company will provide you with the tools and resources to facilitate this, which will allow you to plan ahead and collect new bids before your current contracts expire (which can ultimately lead to lower costs).

Having an experienced and trusted vendor on your side can make a world of difference in your community. But how do you make sure that happens (and avoid contract disputes)? First, partner with a management company to select the best vendor for you and your association. Then, work with experts to make sure the contract terms of service are clear and reasonable. A great management company will help you navigate contracts, directing you to industry resources and helping you plan ahead for negotiations. To learn more about avoiding conflicts with HOA vendor contracts, contact FirstService Residential today.