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Vendors and the Self-Managed HOA
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Minnesota Community Living November/December 2010

Vendors and the Self-Managed HOA

By Tony Poetz, Spectrum Home Services

Vendors and property management groups traditionally work in a relationship based on a combination of past performance, current vendor capabilities and budget. The property management group and its represented HOA usually benefit by paying diligent attention to those currently contracting to HOAs in the area. If a landscaper is maintaining a beautiful façade along a well-traveled avenue, property managers should know who’s responsible. Likewise (and probably more important) for who’s performing poor work. If an HOA in Blaine has experienced severe attic condensation resulting in mold growth due to a roofer’s neglect, a property manager in Chaska should definitely know to avoid that roofer or at least ensure that it doesn’t happen on the Chaska project.

But what happens when an HOA is self–managed and doesn’t have such resources to identify which vendor to choose for a project?

We spoke to Rita A. who is part of an HOA board that self-manages. Some of the pros for group’s self-management include:

  • Improved cost
  • Closer to problems within the community
  • Closer to the vendors
  • Control over cost and quality of vendors

Some of the cons for her group’s self-management include:

  • Time consumption
  • Lack of homeowners willing to sit on the board
  • Each homeowner has a personal agenda
  • Difficulty sourcing vendors
  • Cost accountability

With these pluses and minuses in mind, Rita explained that their group’s process for finding vendors is similar to that of a traditional property management company. "We typically rely on board members to locate a vendor and gather references and have a Certificate of Insurance on file.

This too is difficult for some board members who do not have this experience. I typically have a performance clause in the contract with a start/stop date and quality standard. We have been fortunate to have a good number of retired business people who have the experience in handling vendors.”

Rita explained that her group’s number one concern is staying within budget which doesn’t necessarily translate to getting by as cheaply as possible. Her HOA understands that you get what you pay for and that’s why, according to Rita "vendors must have a stellar work record, competitive pricing, and insurance. Years in business is not a huge issue, but does play a part. Size of the company is definitely important since they must have enough personnel to complete the job in a timely manner. "

Cheap is not usually better, so the budget is planned to get the best possible product at the best possible price. Work record and insurance requirements are testimonials to quality.

Vendors can create long-term relationships with self-managed associations just as easily as they do with property management groups. Performance, responsible business practices (insurance, licensing) and honest pricing matter for everyone and will make the difference for a project’s success.

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