If you’re a co-op, condo or HOA board member or manager, you have to deal with vendors and service providers constantly; it’s a routine part of the day-to-day running of any building or association. There are always inspections to be done, repairs to be made, new projects to be undertaken, and accounts to manage. And there are all types of vendors, from laundry-room operators to elevator repair companies to snow removers to landscape designers—even people who go up in a crane to work on a water tank 20 stories above the ground. While in some developments an exercise room or gym may be taken care of by volunteers and administered by a committee, in others it may be outsourced to a professional exercise room operator, and they, too, would be classified as a vendor.
All in all, good vendors are one of your building’s greatest assets. It’s in both the board’s and the vendor’s interests to have a strong relationship and make sure a good job gets done. And it’s important to have a vendor who’s used to working with multifamily developments. Because vendors are so important to the running of an association, keeping on good terms with them, negotiating in good faith, and selecting new ones are of primary importance to boards and managers.
The Board, the Manager, or Both?
Who usually makes decisions regarding vendor choices and service bids for boards? Often, it’s some combination of the board and the managing agent or property manager.
“The best process,” says Ralph Westerhoff, CEO of BrickWork Management Inc. in New York City, “involves a partnership between the board and management. We like to make sure the board is always aware of everything we’re doing, even for small projects.”
Often, boards or managers have long-term relationships with their vendors, and they like to keep it that way. To change a laundry room operator, for example, requires a lot of disruption—washing machines have to be taken out, which in itself requires heavy equipment, and often new plumbing connections have to be made for the new equipment, new contracts must be vetted and signed, and so on.
There are times, however, when finding a new vendor becomes necessary. Maybe a current vendor hasn’t been performing up to scratch, or maybe management just thinks it’s time for a change. When there are disagreements—for example, if work on a project or repair is two months behind schedule, or if a vendor isn’t holding up their end of a contract—the first step should be negotiating with the existing vendor, but that won’t always work. Then it might be time to look for a new vendor.
In many instances, a management firm that manages multiple buildings or developments will recommend to a board one of the firms it has already used with satisfaction at other properties. If this isn’t the case however, managers and boards have many methods of finding prospective vendors at their disposal. Attorney Scott Piekarsky of the firm Piekarsky & Associates LLC in Wyckoff, recommends going to trade shows (the Cooperator’s Expos in different parts of the country being excellent examples), finding companies through advertising, and consulting trade and professional organizations that maintain contact lists for members.
“Because we only manage smaller properties,” says Westerhoff, “we often find resources through services such as Angie’s List. Naturally, word of mouth and recommendations from other resources help round out the search process.” Indeed, sites like Angie’s List are invaluable because they give an idea of what other clients think of a particular vendor and their services. Also, some co-ops and condos will provide information on “how to become a vendor” on their websites, allowing vendors to reach out to them proactively to offer their services and products.
The Right Vendor for the Right Job
However, just as in any new business relationship, a full background check of all new vendors should be made. Who’s responsible for checking a new vendor’s references? In most cases, it’s the responsibility of the management company – or if you have an in-house management department, your own management staff. Still, the board ultimately has to sign off on any decision.
Of course, although the basic vendors that developments deal with – painters, roofing contractors, gardeners, electricians – are similar in all condo and co-op buildings, they do vary somewhat depending on the type of building or development you’re dealing with. Also, just because a particular vendor has done good work on one type of job doesn’t mean it’s the best choice for a different type of task.
For example, spread-out suburban condo or suburban associations may require a different assortment of vendors than urban high-rise buildings. Elevator repair people may be more important to a high-rise than a low-rise association for obvious reasons (although in newer developments, even three-story buildings may have elevators). A suburban condo association may require more gardeners than an urban building, which might only have a few trees and a small lawn in the front of the building to contend with.
Even in services that are common to both, the nature of the air-conditioning work to be done in a high-rise, for example, could be very different from that which would be installed or maintained in a suburban HOA or garden-apartment complex. While it’s unlikely that a vendor who’s not qualified or rated to do a certain kind of job would attempt to bid on it, it will save a lot of time and effort if a community’s decision-makers can determine who the most likely prospects are beforehand, and avoid reaching out to the wrong type of service provider.
With all the many vendors a typical co-op or condo development has to contend with, it’s easy to forget when you have to renew your contracts with them. That’s why attorney David Rosenberg of Marcus Rosenberg & Diamond LLP in New York recommends that you “calendar,” or enter onto your schedule, when the renewal of a contract is coming up so it can be reviewed with care.
It’s also a good idea for the board to solicit feedback from residents about a given vendor’s services. If two of the three treadmills in an exercise room or fitness center are usually out of service at any given time, or if the convectors installed by a new contractor don’t put out enough heat or cold air, those are causes for concern. Unless board members experience issues like these personally, they might assume that all’s well when in reality, it’s not.
Even when you have a vendor with whom you’re more or less satisfied, it’s not a bad idea to take a critical look at that relationship when the time comes to renew your contract. If you find a new vendor that wants to do business with you and can give you the same level – or better – service at a lower price, says Rosenberg, your current vendor will usually match their price in order to keep the relationship going.
“It’s usually a buyer’s market,” says Piekarsky, who adds that when contracts have to be renewed or new contracts have to be made, having savvy board members who have experience negotiating can be a big help. “In one of the boards we dealt with, we had a board member who had sold auto parts for 40 or 50 years. He had spent years negotiating, buying and selling.” The man put the same skills to work in negotiating with vendors, and he helped his development considerably.
Getting together with other developments and buying vendors’ services in bulk is one strategy that’s been mentioned, but it doesn’t seem to be that common. What is more common, as we’ve mentioned, is having a management company that manages several co-op and condo complexes use the same vendor for the various properties they manage, provided that the vendor does satisfactory work.
Westerhoff sums up: “First, working with management, a detailed scope of work needs to be assembled so everyone understands what is expected and what the vendors are bidding against. The goal is to end up with apples-to-apples estimates which make comparison much easier and cleaner. Second, boards need to approach a project realistically and expect to pay against the best estimate within the range of market-rate pricing. Finally, we work to maintain accountability throughout the project, and make that clear to everyone concerned during the negotiations.”
Above all, it’s important to keep the lines of communication open with your vendors. Whenever possible, meet with them in person, and make sure your staff and board members get to know them. If problems arise, you should talk them over with the vendor immediately, rather than waiting until the situation worsens or escalates. All in all, if you make the effort to maintain communications, more often than not you’ll be rewarded with a good working relationship.
Raanan Geberer is a freelance writer and reporter, and a regular contributor to The New Jersey Cooperator.