Ask the Expert: Vendor Contract Management
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When a repair proves faulty, are you certain that your association is protected from loss?
You may not realize the long-reaching impact an improperly certified vendor can have on a community and the legal liabilites that may follow. Watch the video below featuring our vendor management partner & industry expert Joe Bushey, President, VIVE (Vendor Insurance Verification Experts) on:
The Importance of Vendor Contracts
Certified & Insured Vendors
Get answers to what good vendor mangement looks like:
How does having a vendor management contract protect the board?
Vendor contracts protect the board by placing all vendors on an equal playing field for scope of work, setting correct (and legally protected) contract groundwork, includes protections for the association against losses rather than all protections written in solely the vendor's favor, and binds the insurance terms so that claims, if and when they occur, are spelled out clearly at the vendor level. This also helps to ensure that association insurance coverages actually will cover such loss claims.
Why should property management companies outsource vendor compliance?
Property management companies should outsource vendor compliance first for the sake of efficiency. Vendor compliance and claims can often be time-consuming to identify, intiate, verify and then investigate if claims are made. This takes time away from your community manager who must prioritize among a slew of other responsibilities that they handle on the board's behalf or dedicate to resident concerns. Outsourcing to a proven vendor management company can ease the burden by allowing a single point of contact for new vendor identification, insurance verification & compliance, and claim investigation. Additionally, companies like VIVE provide trained and licensed personnel well-versed in rigorous screening so that your community is working only with verified and insured vendors, which can further mitigate risk and potential loss to your association.
Is it safe for boards to assume that vendors have proper certifications and insurance?
VIVE typically sees a failure rate of one third of all vendor applicants. This means out of 100 vendors, at least 33 are unable to provide the documentation and standard insurance coverages that are consided the minimum in the industry. It is never wise to assume that a favored vendor that comes in at a lower cost has the correct insurance, licensing and documentation. Outsourcing to a neutral third party also allows for greater transparency in board's selection of vendors and to resident inquiry, which can foster a greater level of trust in the board itself as well as the property management company.
FirstService Residential's Ask the Expert webinar miniseries aims to answer your most frequently asked questions on a variety of key topics. For more information about vendor management done right, contact our partners at VIVE.