Tuesday, December 22, 2015

Going Cheap

New Board members may question the selection of vendors used for various projects in the community, looking for ways to cut costs.  Such inquiries can create friction with the more seasoned Board members, who feel their own judgment is being called into question. Its best to tackle this topic in the very first Board meeting:  Initially address any mistrust that otherwise could linger and poison otherwise productive meetings throughout the year. 

Here are questions to discuss with your new Board members, helping them consider different aspects of vendor selection.

Why not use a handyman to do basic electrical work around the property?  If damage should occur, days or months after the work is done, the Board can be held responsible for using an unlicensed and under-insured worker.  Also, it only takes a phone call from an upset resident to bring in a county inspector.  If the work is not to code, fines and penalties will rack up along with the demand to redo the work.  Also, if someone is injured in a dark area (because of improper electrical work) the Association may be the one funding a claim settlement, without the benefit of insurance.

Why not just force the handyman to obtain the property insurance and do work that doesn’t require a license?  Proper insurance coverage can be expensive, one of the reasons why handyman can do the work so cheaply.  All too often, false proof of insurance documents are provided, or the contractor cancels coverage immediately after being awarded a job, before any claims arise.

Why not have our manager, who is locked in at a fixed rate, go around and do basic maintenance (such as replacing light bulbs)?  This takes the manager away from overseeing critical issues, and also upsets homeowners unable to reach the manager quickly in certain situations.  Don’t under utilize your manager.

Why not have my fully-qualified friends or relatives do the work?  Besides a perceived conflict of interest for personal gain, you expose yourself to homeowner criticism if problems crop up.  It also creates opportunities for things to become ‘personal’, clouding your judgment and undue issues with your actions.

Why not have volunteers handle some of the duties?  The proper liability and workers compensation insurance needs to be in place, as waivers are not worth the paper they are written on.  Parts purchased down the street may not be commercial-grade, resulting in early wear-and-tear.  The volunteer may unknowingly be skipping crucial maintenance steps or fail to fully consider possible system failures.

Retaining the right person includes more than just price.  You are hiring for specialized knowledge, for proper safety, for efficiency, and for insulation against claims.  You get more than you paid for by not cutting contract corners.

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