If you live in a condominium or cooperative association in Florida, it may seem like your building is in a constant state of repair. Roofing. Painting. Concrete restoration. Pool deck. Pool re-marciting or diamond briting. Asphalt. Pavers. Elevators. Windows. The list goes on and on, and the work goes on and on. With the new statutory structural integrity inspections and reports that are now required, the work will only increase. While all these repairs and maintenance are required and good for the building and its residents, choosing the right contractors to perform these jobs are critical in order to ensure the job is done timely, properly, at a reasonable cost, and with proper warranties as applicable.
How does an association find the right contractor? In today’s market, how does the association find any contractor? What are the steps? The pitfalls? Who do we get references from? This article will assist you with these questions.
References can come from many sources. Neighboring buildings. Your manager. The management company. Your other professionals – accountant, insurance agent, attorney. Your engineer. An association should be able to secure at least three or four qualified contractors from these sources. How many bids do you need? By law, when competitive bids are required, the minimum is two. That is all the statute requires – two bids. Not three, like many people think. But I always suggest you solicit at least three bids for any job over $10,000.00, and for major work, like roof replacement, painting, concrete restoration, etc., six or seven bids are not uncommon.
Major work, like roof replacement, painting and waterproofing, concrete restoration, etc., should have a formal bid package prepared by the association’s engineer in conjunction with the association. The bid package will contain detailed specifications that each bidder is required to comply with, resulting in the “apples to apples” bid comparison every association wants to see. How does the association engage an engineer? See the above paragraph.
The formal bid package will include specifications, timetables for the work, payment provisions, payment approval provisions, insurance requirements, warranty information, performance deadlines, penalties for missing performance deadlines, inspection requirements, who pays for permits, and a host of other information. Generally, there is a matrix where each contractor is required to insert their price for that specific portion of the job. Once all the bids are received, the engineer or association can prepare a matrix showing all the contractors and their prices for each portion of the work. This is the beginning, just the beginning, of the contractor vetting process.
Price is not everything. Price is not the only thing. Generally, a contract should not be awarded based on price alone. While price is certainly an important factor, it is not the only factor.
Availability, supervision, reputation, ongoing other jobs, past performance, complaints on file, warranty, and other factors should be considered. If possible, walk another community where the contractor is doing work. Speak to those board members and residents, if possible, regarding the work, the contractor, problem resolution, supervisor availability, etc. All of this information should be factored into a board’s decision when choosing a contractor.
Of course, do not forget the basics, which will be part of the bid package – licenses and insurance. Always verify licenses and insurance. Let me say that again – always verify licenses and insurance. The association should be an additional insured under the contractor’s insurance policy – not just a certificate holder.
While the above bid package and related information is generally just for major projects as noted above, the theories can be applied just as well to a $5,000 pool heater replacement, a $7,500 sidewalk installation or a $15,000 playground installation. Check references. Verify licenses and insurance. Look at warranties.
One of the most important pieces of advice I can give – do not sign any contract before it has been reviewed by your association counsel. AIA contracts are not written to protect an association – they are written to protect the contractor. One page proposals, with a signature line and small print on the back page, are generally a red flag. Not always, but generally. Usually, a more formal contract that protects the association is required.
My second most important pies of advice regarding contracts – never sign a notice of intent without the notice being reviewed by your association counsel. These notices of intent can bind an association to engage in a contract, payments, etc., before a contract is even produced, reviewed or executed.
Living in south Florida, we have six months of hurricane season. Once a storm hits, contractors from all over the country descend upon Florida looking for work. Many of these are legitimate companies here to help. Just as many are not. When dealing with contactors after a storm or other disaster, the best piece of advice is “Do not lower your standards”. Go through the vetting process. Check references. Verify licenses and insurance. Legitimate companies that want to do business in Florida have licenses and insurance in place before a disaster. Watch out for red flags:
- You need to sign the contract today
- I can only give you ___% off today.
- 50% down
- We can start work immediately – right now
- Just sign the agreement – all payments will come from your insurance company
- Any type of pressure tactic
Use your common sense. If a deal is too good to be true, it usually is too good to be true. There are no free lunches. Choose your contactors wisely. Time spent up front doing so will save you thousands, if not tens of thousands of dollars and as much aggravation later.
Howard J. Perl, Esq.
Shareholder, Becker
Fort Lauderdale | bio
