Common Mistakes HOAs Make When Setting Up Contracts

If you’re on a HOA board, you will eventually need to help your association set up contracts for services. These might be ongoing services, like snow removal or trash pickup, or they might be one-time services, like sprinkler installation or pool repair.

No matter what the service is, make sure you avoid the following mistakes. This will help ensure that you get the best possible contract for your association.

Not Getting Enough Quotes

Some HOAs only get one or two quotes for a service before they sign on the dotted line. However, this is not enough quotes for them to truly know the range of prices available for the service in question or what different companies might include along with the basic service.

Instead of limiting the number of quotes you get, try to get at least three per service. You may want to get more if those three vary significantly, either when it comes to the cost of the service or to what is included for the price.

Choosing the Wrong Quote

HOAs usually have a bottom line, which makes the most inexpensive quote very attractive to many associations. However, this can cause all sorts of issues. While the company may still do good work for that price, there’s a good chance that they will not, or that they will charge extra for things that other companies wouldn’t. Take a long, hard look at any quotes before you sign a contract.

Making the Contract Period Too Long

Most of the time, signing a year-long contract for ongoing services is the best idea. If you sign for any shorter period of time, you may pay more for the service each month because of your shortened contract.

If you sign for a longer period of time, you might end up locked into a contract that is too expensive (if prices go down) or that doesn’t work for what your association actually needs. If you do sign for longer than a year, do so with a company you’ve worked with and been happy with before, and try to include a paragraph that says you get the lowest possible rate offered to organizations like yours for the services you need.

Not Looking the Contract Over Yearly

Even if your contract with a vendor is good for longer than a year, someone with the association should examine it on a yearly basis. This helps ensure that everything the contract says will be done is actually getting done. It also helps you find potential room for negotiations with the company if there are discrepancies or other contractual issues.

Call AMI for Help With Contracts Today!

If your association is struggling to find good vendors or you feel like you’re not getting the most out of the contracts you already have, contact us at Advanced Management Inc today. We’ll come alongside your HOA to make sure you get maximum value for every dollar you spend. Call now to get a customized plan for your association’s needs.

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