Surviving the HOA Vendor-Vetting Process

Surviving the HOA Vendor-Vetting Process on

7 things vendors should understand about HOAs to help them win contracts ­

Contracts with an HOA, condominium, or other types of managed community can be a huge windfall for any vendor, from landscaping and construction companies to businesses that provide transportation services. If you’re a vendor looking to add an HOA to your client list, you can expect a thorough vetting process, so knowing more about HOAs and their purpose will help. VendorSmart is here with seven things you need to understand about HOAs to get through the process and land a vendor contract.

1. Understanding HOAs and why it matters

Working with a community association such as an HOA, condominium, or co-op is different than providing services to a developer, a building-management company or a business.

The first thing to understand is that an HOA is a corporation formed by the developer. They have an elected board of directors made up of homeowners from the community. In most cases, they are not professionals who have experience with property management. While they might have hired a contractor to replace a roof or do home renovations, they have likely never hired a vendor to provide landscaping, construction, or daily maintenance for an entire community.

2. How HOAs function

HOAs are guided by their bylaws and their policies and procedures. According to the NOLO legal encyclopedia, “The bylaws govern how the HOA operates and contain the information needed to run the HOA as a business.”

Bylaws cover matters such as:

  • How often the HOA holds meetings
  • How HOA meetings are conducted
  • The duties of the various offices of the board of directors
  • How many people are on the board
  • Membership voting rights

Another matter covered in HOA bylaws is hiring vendors – clearly, an important area for you to understand.

3. There are rules governing the hiring of vendors

The bylaws and/or policies and procedures also contain rules dictating how vendors should be selected. These rules are meant to ensure fairness and transparency and to make sure that board members don’t abuse their powers or reward contracts in a way that will help them profit. In some cases, the rules exist because of local, state or federal laws, and violating them can lead to fines or legal action for the HOA.

4. Find out the qualifications to be an HOA vendor

If you want to be awarded a contract as a vendor, you will need to meet specific qualifications. We don’t simply mean having enough resources or experience to handle a specific task. You must also ensure you have the right commercial insurance.

Typically, vendors need the following types of commercial insurance:

  • General Liability
  • Workers’ Compensation
  • Commercial Auto/Vehicle Liability
  • Additional Insured Provision – You need to endorse the HOA as “Additional Insured” on General Liability and Auto/Vehicle policies

See this previous VendorSmart blog for more about required insurance coverage and documentation.

5. Know your own capabilities

Be realistic about the size of your operation and your available resources. Providing landscaping services to a huge gated community requires vastly different resources than working with a small apartment or condo. If you only have two to three full-time employees or don’t own the equipment needed to handle a large job, you will only create headaches for yourself – if you even make it past the first round of consideration.

6. Create relationships with those who make the hiring decisions

Most of us have gotten a job because of someone we knew. Landing an HOA vendor contract often comes down to knowing the right people. While knowing someone on the board won’t guarantee success, having a personal relationship means the board members are more likely to trust you.

You can find out the name of the management company or community manager pretty easily. Finding the names of HOA board members may take some more work, but it is worth the effort. Once you have a name or contact information, make a phone call and ask if they are accepting bids for contracts, and generally just try to get a dialogue started with them.

7. Follow-up is important

If you submit a bid for a vendor contract, always follow up after your initial conversation and after every meeting. Demonstrate your enthusiasm and eagerness to work with them, as well as your communication skills. Show that you care about the community and your clients. It’s also an opportunity to reiterate your strengths or answer any questions they may have. This can go a long way toward landing you that contract. If you’re looking to find new clients, VendorSmart can help connect you to community managers and HOAs looking to hire service providers. We can also help you manage bids and RFPs, as well as manage compliance documents. Contact us to get started.