HOA vendor management can be overwhelming for many homeowners associations. After all, communities must work with several vendors dealing with various issues simultaneously. Here are some tips that help HOAs manage them better and get the most out of their services.
HOA Vendor Management Tips for HOAs
What best practices should HOAs abide by for proper HOA vendor management? Here’s what to keep in mind.
1. Prioritize Necessary Services
Homeowners associations have many obligations that require help from contractors. The list can go on forever and bloat the list of vendors the HOA has to work with. The board should prioritize only the necessary services to keep things manageable and reduce the association’s financial burden.
Necessary services include those that require immediate attention or are vital to the HOA’s operations. For example, the HOA’s roads may have many potholes or exposed electrical wiring. The board should prioritize these over unnecessary activities like projects to build new amenities. This keeps the vendor list and maintenance schedules manageable.
2. Find Reliable Contractors
It might go without saying, but board members should pick HOA vendors that are reliable and efficient. This allows the HOA to fulfill its obligations to the community without wasting any members’ HOA fees. It also addresses the community’s most pressing needs and keeps property values high.
The board must review a potential contractor’s track record to pick the right vendor. Call the company’s past customers to gauge their services. The board can also ask neighboring communities, colleagues, or HOA management companies how their relationships with a certain vendor have fared.
In addition, the board should carefully review a potential vendor’s services, timetables, price, and how responsive they are. The board has a fiduciary responsibility to the community. Hence, they must make sound decisions to the best of their ability.
3. Send Out Multiple Bids
The board should not simply select HOA vendors that first popped up in their search results. Instead, receiving at least three bids for any task requiring outside help is a good idea. Some state laws also require multiple bids, so certain HOAs may be legally obligated to do this. For instance, Nevada requires three bids for projects over a certain percentage of the annual budget.
Sending out several bids has many benefits. The most obvious include the ability to assess the kind of value the HOA can get from each contractor. It also gives them more options to consider. Moreover, it helps associations compare offerings and negotiate for a lower price.
4. Choose the Best Value for Money
Upon receiving several bids, HOAs may be tempted to settle for the cheapest vendor. But, the key to proper HOA vendor management isn’t hiring the lowest possible bidder. Instead, it’s hiring the vendor that offers the best value for money. Remember to compare each vendor’s price and what services the HOA may get.
5. Set Sensible Expectations
After choosing the right HOA vendors, the board should set sensible expectations. Some HOAs may be tempted to rush vendors to finish the task so they can move on to another project. But, this can lead to poorly executed or incomplete jobs that may cost more in the long run.
Hence, HOAs should communicate with the vendor about how and when the job can be completed. They should set proper timelines that are timely and reasonable. This allows vendors to provide the HOA with high-quality work. It also improves working relationships — a vital part of HOA vendor management if associations want to work with companies long-term.
6. Have Open and Frequent Communication
It’s essential to communicate openly and frequently with homeowners association vendors. Make sure to be upfront with the contractor and let them know of any potential issues that may arise. For example, obstacles may be blocking certain walkways or permissions they have to get. This allows contractors to adjust and do their work properly.
Apart from this, HOAs should set expectations and communicate their needs right from the beginning. This allows vendors to set and meet timelines to complete their tasks. HOAs should also promptly respond to vendor questions and concerns to avoid delays.
7. Send Payments on Time
The vendors aren’t the only ones who should act professionally. Homeowners associations should also do the same and send the vendor’s timely payments. The timeline for each payment is often outlined in the service agreement. HOAs should note them down so they can pay the contractors on time.
If the HOA fails to send timely payments, the vendor may be discouraged or deterred from doing their job. After all, they cannot perform their work or offer great workmanship without getting paid. Moreover, failing to send payments on time can be disrespectful and sour the working relationship. Hence, the vendor may want to wait to renew the vendor contract or work with the HOA again.
8. Ask Professionals for Help
It’s hard to manage HOA vendors alone. The HOA board often has a lot of other responsibilities to fulfill — whether related to the association or not. After all, they do not get paid for their work and often do not have the right skills to accomplish everything.
That’s why it may be a good idea for HOAs to get help from professional management companies. These companies often already have a list of trustworthy vendors the association can tap into. They also have good working relationships with those vendors, so establishing trust is easier.
Apart from these, professional management companies have years of experience in HOA vendor management. They can easily facilitate communication, draft fair contracts, keep track of payments, and monitor vendor performance. This eases the HOA board’s burdens and frees them to focus on more pressing issues.
Proper Vendor Management for a Flourishing Community
HOA vendor management is a challenging task that offers many benefits to communities. That’s because vendors are vital to managing HOAs and maintaining common areas. With proper vendor management, the board can easily create a flourishing community.
Landmark Community Management offers best-in-class vendor management services and can provide HOAs with the most reputable vendors. Call us now at 512-569-5527 or contact us online to request a proposal!