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Self-Managed Association Boards Part 3
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Minnesota Community Living March/April 2011

Self-Managed Association Boards: The Top Six Challenges That Face a Board Today

By Joel Starks, Sharper Management

In this series we are focusing on you the board member and the challenges you face each day when running your homeowners association. We are exploring six challenges and ways to work through them. If you see something that seems common or you identify further challenges, do share. I will add your comments and feedback as the year goes on. You can email your comments to joel@sharpermanagement.com.

A board president speaks
A small-association board president reported the following struggles—not to mention the earful she gets from frustrated homeowners who don’t know how hard it can be to manage an association and work full time. Today we focus on vendor relationships.

  1. Enforcing rules: it is difficult to confront friends and neighbors.
  2. Knowledge of pertinent statutes: trying to understand the "legalese.”
  3. Developing meaningful specs for services/vendors, etc.: Not my area of expertise and requires time.
  4. Frequent phone calls from members with matters that need attention: Time.
  5. Keeping track of paperwork: Time.
  6. Foreclosures: How can we protect the investment? What if they vacate?

Have a plan
Each year boards consider vendors in different categories: snow removal, lawn care, landscaping, boiler maintenance, plumbing, roofing, siding and windows, restoration and
 general maintenance.

It is said that hindsight is 20/20, but in the world of vendor vetting, bidding and management never seems to be clear, even in the past. With board turnover and changing responsibilities, it is difficult to remain consistent and keep an active log of incidents, issues, concerns and betterment strategies.

Philosophies and expectations change. Your board should review vendor contracts annually at the beginning and end of each season or project.

Pre-select a restoration contractor
You should pre-select a restoration vendor. Just like you have an emergency plan for fire and storms, you should have a emergency restoration plan.

"Pre-selecting a multi-faceted restoration contractor is a critical part of any emergency procedure plan,” says Pauline Benson with Loyear Restoration. "The day after the disaster, when the management team or board is under incredible stress, is not the time to search or interview restoration contractors.”

Create a detailed RFP for accurate comparison 
When you request vendors to bid your project or maintenance item, be sure to include a detailed scope of the project, bid instructions and certain bid specifications. This allows you to make an apples-to-apples comparison.

Insurance not optional
Never let the work start without proper verification of the vendors insurance. Here is an insurance example from the CAI national site:

Throughout the term of this one season agreement, the contractor shall maintain, at his sole expense, Comprehensive General Liability of not less than $1,000,000.00, Bodily Injury Liability of not less than $500,000.00, Property Damage Liability, Workers’ Compensation Insurance coverage, and Comprehensive Vehicle coverage with a contractual liability endorsement. The contractor shall furnish the Association with a certificate of insurance evidencing the required coverage(s) and naming the Association as named insured.

Give vendors enough time to bid
Send out your request for proposals early enough for vendors to respond. Communication is the key here. Give vendors time to visit the property, submit the requested information and deliver the bid prior to your deadline. This way, you can make an informed decision.

Appoint a main contact
When you prepare for larger projects, you should assign a main project. This may require an extensive time commitment depending on the project. Choose someone who can schedule visits and inspections, create punch lists and sign off when the project is complete so it can be invoiced and paid.

Collect references
Require at least three references from current clients (preferably associations), including the property address and contact person with phone number and email. When contacting associations that have had work done be sure to identify yourself and the reason for your call. People tend to relate to you and your needs and will share information that will help you ultimately choose the best vendor.

In dealing with vendors, the many details can cost you dollars, stress, neighborhood happiness and time. Having a plan and process is the key to working with vendors.

Next issue we will cover the time-consuming issue of phone calls. Inevitably you will get complaints about maintenance, dogs, flying turkeys that crash into windows, pest control, woodpecker holes, billing, painting, snow plowing, parking, lawn care, insurance, rules, regulations, contracts and negotiations—and maybe a call for occasional thank you!

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