Tips On Selecting The Right Vendors For Your HOA
One great challenge for HOAs is to choose the appropriate vendors to complete the required tasks of their communities. If HOAs are not careful, they will end up spending unnecessary amounts of their allotted budgets on expenses that they could have found less expensive elsewhere. For HOAs that are looking to utilize their resources in the most effective way possible, it is wise to review carefully contracts with any existing vendors and negotiate contracts with new vendors with care. To learn more about how to choose the ideal vendors that have affordable pricing for the services your HOA needs, review the information below:
9 Tips On Selecting HOA Vendors
1. Review the Governing Documents of Your HOA Carefully
For your HOA to be able to hire certain vendors, your HOA board must have an adequate understanding of what its rights are. The reason for this is that certain HOA agreements have stipulations about which vendors can be hired. By having a careful review of the governing documents of your HOA, you will be able to make an informed decision about what kinds of vendors you are looking for. If your HOA board is unsure, be sure to seek outside advice to interpret the original intent of the governing documents of your association. By doing so, you will have a clear understanding of what vendors you need and can hire within the stipulations set out in the governing documents of your HOA.
2. Understand the Difference Between an Employee and an Independent Contractor
There are many important differences between an employee and an independent contractor that your HOA board needs to be aware of. Hiring an employee has several extensive obligations that will cost your HOA a great deal of capital. For smaller assignments that do not require a vendor to be there extensively, it will be far less expensive to hire an independent contractor than it would be to hire a full-time employee. Employees are quite expensive because, in many circumstances, you will have to pay for expensive benefits that could be saved by hiring an independent contractor for the precise service that your HOA requires.
3. Have a Concrete Budget in Place
When you serve on the board of an HOA, you have a fiduciary duty to represent the best interests of your community. Your fiduciary duty means that you will have the responsibility of managing the finances of the HOA with integrity. Your HOA board will need to have a concrete budget in place to allocate the necessary expenses to carry out the fiduciary duty of your HOA with ease. Within your concrete budget, you will have to allocate certain funds to ensure that certain tasks are completed. Allocate certain parts of your HOA budget to cover required expenses and be sure that you are only considering vendors that fall into the ideal price point that matches the budget of your HOA.
4. Interview and Quotes from Many Different Vendors
It is never wise to only get prices from one vendor. It is beneficial to get prices from at least three different vendors to get an idea of what the competitive price is in the market. If you do not speak with multiple vendors, you may be missing an opportunity to save a great deal of capital. If you can get a vendor that has a balance of high quality and ideal pricing, then you will be able to allocate your savings to benefit your community in other ways. Not wasting capital is an excellent way to build further trust with your community’s residents.
5. Verify the Vendor’s References
Whenever you hire a new vendor, it is best to speak with at least two of their former clients. You should be assessing whether they have managed a community of your size and what the quality was of their services provided. If any company fails to provide you with this information, it should be a red flag that they may not be the ideal company to work with in the future. A vendor with excellent references has a higher probability of doing an excellent job on the service that you hire them to enhance the quality of life in your community.
6. Ensure the Vendor’s Insurance, Licenses, and Credentials
Depending on what services you will be hiring the vendor to complete for your community, it is wise to verify that they have the proper credentials, licenses, and insurance. Any vendor that will not present this information to you in an industry that requires it, should be avoided. The ideal vendor will have no issues with transparency, and once you find a vendor that readily presents this information to you, your HOA should consider working with them if their pricing matches your HOA budget.
7. Be Sure to Have Contracts in Place
Contracts are an excellent way to clarify what a vendor’s exact responsibilities and pricing are. It is unwise to hire a vendor without having contracts in place. HOAs that can lock vendors into a certain bracket of pricing may be able to save a great deal of capital over an extended period.
8. Balance the Price with the Quality of Service
When working with the budget of your HOA, you need to place a priority on certain services that need to be provided to your community. Some services may have higher values than other services. It is important to discuss with your HOA board about which services need to have additional capital allocated to them. By having these discussions, it will help to eliminate vendors that may be out of the price range that your HOA can afford.
9. Ask About Discounts and Bulk Pricing
HOA board members should never be afraid to ask for discounts from vendors. It is important to ask about bulk pricing, particularly if you have a larger community that will provide a vendor with continuous work. If your HOA can negotiate bulk pricing with prospective vendors, it could provide substantial savings to your budget. If your HOA is more responsible for negotiations with vendors, you will be able to have more cash in your reserves, which will reduce the additional charges that your HOA will have to make to your residents. Residents, as a result, will have a higher level of confidence in the efficiency of how your HOA is using its allocated budget.
How Elite Management Services Can Help
Elite Management Services (EMS) has many years of experience assisting HOA Associations with their management practices. Our main objective is to introduce cost-effective management practices that improve the quality of life of residents of our communities. Our approach enables us to have a personalized relationship with our clients to ensure the success of their communities. We achieve this by customizing our HOA Management model to fit the community’s unique size and particular requirements. Depending on where your community is located, our experts will be able to customize an HOA Management strategy that is tailored to your community’s individual needs. By deciding to work with an organization such as EMS, you will see a great improvement in your community’s finances and efficiency, which will have a positive impact on the satisfaction of your residents.