HOA Vendor Management: How to Hire, Supervise, and Fire Contractors

The Vendor Problem Most HOAs Have

Most HOA boards inherit their vendors — the landscaper and maintenance company have been around for years, and changing them feels difficult. But "we've always used them" is not a vendor management strategy. Vendor quality directly affects property values, homeowner satisfaction, and the association's ability to maintain its assets.

The Right Way to Hire a Vendor

**Write a scope of work before you solicit bids.** A vague request for "landscaping" will get vague bids that are impossible to compare. A specific scope — square footage to mow, frequency, what's included and excluded, performance standards — enables apples-to-apples comparison.

**Get at least three competitive bids.** For any contract over a threshold specified in your governing documents (often $3,000 to $10,000), competitive bidding is typically required. Even when not required, getting multiple bids benchmarks the market and gives the board information.

**Verify insurance before any work begins.** Every vendor must carry:

• General liability insurance (minimum $1 million per occurrence, $2 million aggregate for most HOA work)
• Workers' compensation insurance (if they have employees)

The association must be listed as an "additional insured" on the vendor's general liability policy. Failure to verify insurance leaves the association exposed if a vendor injures someone or damages property.

**Check references — specifically, similar communities.** Ask for references from other HOAs or condo associations of similar size. Call them. Ask whether the vendor showed up on schedule, whether their work met the contract standard, and whether they'd hire them again.

Contract Essentials

Every vendor contract should include:

• Detailed scope of work
• Pricing (fixed price or not-to-exceed)
• Term and renewal provisions
• Performance standards and consequences for non-performance
• Insurance requirements
• Termination for convenience clause (ability to exit the contract with proper notice)
• Change order process

Never allow verbal agreements for services. Even small jobs should be confirmed in a written work order.

Supervising Vendor Performance

Vendor performance degrades without oversight. Designate a board member or assign the management company to conduct regular site visits and verify that work is being performed to the contract standard.

When performance issues arise, document them: take photos, note dates and times, and send written notice to the vendor referencing the contract standard. This documentation is essential if the relationship eventually leads to a contract dispute or termination.

How to Fire a Vendor

Review the contract termination provisions before taking any action. Most contracts require 30 to 90 days' written notice. Give proper notice in writing, keep the relationship professional, and ensure the outgoing vendor transitions any keys, access codes, or documentation to the association or the incoming vendor.

Never allow the association to be caught without a vendor in a critical service category. Have the replacement vendor identified and under contract before providing termination notice.

Frequently Asked Questions

Who should sign vendor contracts on behalf of the HOA?

The board president or another officer designated in the bylaws typically signs contracts on behalf of the association. Check your governing documents for the specific authority provision.

Does the board need to approve every vendor contract?

Most governing documents give the board authority to approve contracts up to a specified dollar amount. Contracts above that amount typically require a membership vote. Know your threshold.

What if a vendor damages property during work?

File a claim with the vendor's general liability carrier. This is why verifying vendor insurance before work begins is so important. Without a valid certificate of insurance on file, the association may have no recourse against the vendor's carrier.