Hire and hold a vendor accountable

An association is, financially speaking, mostly a purchaser of services. Landscaping, pool care, insurance, accounting, roofing, snow, legal. Most of the money a board spends leaves in a vendor payment — and most of the trouble a board gets into arrives the same way, usually because the scope was a phone call and the contract was whatever the vendor emailed.

Write the scope first

Before you talk to anyone, write down what you are buying. One page is plenty, and it should answer: what work, how often, to what standard, in what season, with what materials, and what is explicitly excluded.

"Landscape maintenance" is not a scope. "Mow, edge and blow all common area turf weekly March through October and biweekly November through February; prune shrubs under six feet twice annually; apply pre-emergent in February and September; irrigation inspection monthly with a written report; excludes tree work over twelve feet and excludes irrigation repair parts" is a scope. Only the second version produces bids you can compare and a standard you can hold someone to.

Getting bids you can compare

• Send the identical written scope to every bidder. Bids on three different scopes are three different products at three different prices.
• Check whether your documents require competitive bids above a dollar threshold — many do, and skipping it is a governance problem regardless of price.
• Ask for references in this community type, and actually call two. Ask what went wrong and how the vendor handled it.
• Compare the exclusions, not the totals. The low bid is usually low because something is missing from it.
• Record the comparison in the minutes. Three bids, the basis for selection, the vote — see lesson one on why that paragraph matters.

The paperwork that comes before the first check

Four documents, collected before work starts, prevent nearly every downstream problem:

1. A W-9. Collect it from every vendor, every time, before the first payment. This is what makes January boring.
2. A certificate of insurance naming the association as additional insured, with general liability and — where the vendor has employees — workers' compensation. Confirm the limits with your own agent; a pool cleaner and a roofer are not the same risk.
3. A license number where the trade requires one, verified rather than accepted.
4. The signed contract containing the scope, not merely referencing a conversation about it.

Seven terms worth arguing about

1. Term and renewal. Automatic renewal with a short cancellation window is the single most common trap. Aim for an annual term with a clean notice period, and calendar the date.
2. Termination. For cause and for convenience, with a defined notice period. A contract you cannot exit is a contract you will regret.
3. Price and escalation. If there is an annual increase, cap it and state the mechanism. "Subject to market conditions" is not a price.
4. Insurance and indemnity. Required coverages, additional insured status, and who indemnifies whom.
5. Standard of performance and cure. What acceptable looks like and how long the vendor has to fix it after written notice.
6. Subcontracting. Whether it is allowed, and whether subcontractors carry the same insurance.
7. Payment terms. Net terms, retainage on larger projects, and — for construction work — lien waivers with each payment.

For anything substantial, have counsel review the contract once. An hour of review on a five-year landscaping agreement is the highest-return legal spend an association makes.

Managing the work

A contract is a standard; management is what makes it real. Keep it light but consistent: route work requests through one system so there is a record of what was asked and when; inspect against the scope rather than against impressions; and when something is wrong, put it in writing the same day, referencing the scope section and the cure period.

Boards that complain verbally for six months and then terminate abruptly usually find they have no documentation at all — and sometimes no right to terminate. Boards that send three short written notes have both.

• Log every request and every completion against the property or common area it concerns.
• Photograph before and after on anything you may need to prove.
• Review each significant vendor once a year at a board meeting, in the minutes, before renewal.
• Never pay in full for disputed work if the contract lets you hold the disputed portion.

Making 1099 season boring

In January, associations that collected W-9s spend twenty minutes on tax reporting and associations that did not spend three weeks chasing vendors who have moved on. The mechanics are simple: unincorporated vendors paid at or above the IRS threshold for services during the calendar year generally receive a 1099-NEC, attorneys are treated specially, and the deadline for recipient copies and IRS filing comes fast.

The work is entirely front-loaded. Collect the W-9 with the first invoice, keep vendor payments categorized as you go, and confirm your treatment with the association's CPA — the classification rules have edges, and the penalty for getting them wrong is per form.

Next, and last in the series: handing over cleanly — including the vendor file the next board will need on its first day.

Frequently asked questions

This is lesson 13 of Board Academy — fifteen short lessons in the order a new board member actually needs them. It is general education, not legal advice: check your own governing documents and your state statute before you act.