During one of our previous podcast and blog, we discussed how to properly vet your vendors to help ensure that you have picked someone reliable and who will execute a timely and professional job for the association. But who manages the vendor? Who inspects and creates the punch lists throughout the job? Who checks up on inspections and the results of those inspections? In short, who supervises the supervisor? In the end, the vendor will be the expert and it is imperative that the right company is chosen for the job.
While Board members and property managers are not project managers, there is a list of things that they can do to help keep the project in question moving along.
- Meet with the vendor often to discuss what was completed and what is next. The vendor should provide to you an understanding of the work, which was just completed and what to expect next. You should be able to track the work and look for proper workmanship. Did they clean up after themselves? Were they timely, did they properly relay any issues to you and offer solutions? Be wary of constant change orders and it is important you do whatever you can to keep them honest. Again, picking a good vendor is paramount.
- What inspections will be involved? Track the inspection by visiting the municipality's website (time and day if possible) and to view inspection results. The inspectors will ensure that the follow-up inspections will have corrected deficiencies. It is highly recommended that you keep a record of those inspections and when they were finalized.
- Ensure that you have money on the association's side. Whenever possible do not pay the vendor too much in advance. Too often paying the vendor in advance leads to gaps between phases of work. In South Florida, we see a high volume of vendors that are more interested in being paid and not as interested in whether they took pride in their work. Look for vendors who take pride in their punctuality, cleanliness, and workmanship.
- Once you pass final inspection, print it and keep a copy for your records. You want to have that in your hands prior to releasing any payments. Sometimes the vendor will press you for final payment prior to passing inspection or prior to providing you with a release of lien.
- Even if you pass final, ensure the vendor has been provided a final punch list of items so those items can be corrected prior or immediately after final inspection passes. I personally always try to have the punch list provided prior to final inspection so as to give the vendor ample time to correct any deficiencies. If you pass final and the punch list has still not been cured, I do withhold payment (of course you want to check with the attorney to ensure that you can do this). A lot of times there is a small 10% retainer built into the vendor and association contract specifically for this reason. The association attorney would come into play with a review of the contract prior to the commencement and that retainer to ensure that said language has been inserted into the contract.
- Ask for a release of lien (if applicable) prior to releasing any final checks. This is very important. I have seen associations come to Allied from other management companies and one of the issues they have is that a supplier has filed a lien on the association for lack of payment. The vendor was paid in full and failed to pay the supplier; this could be done by a roofing material supplier or a painting manufacturer. The association would then either be involved in litigation or pay the amounts owed to the supplier after all due diligence has been exhausted.
I strongly recommend that you pay attention to detail along the way so as to avoid surprises. There will be issues along the way. Construction is at times unpredictable and unforeseen issues do arise. Look for all possible alternative solutions and not necessarily the least expensive ones. The long term success of the project depends much on making the right decisions regarding work order changes, materials used, and how you handle certain construction issues that arise during the project.
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