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With the exception of some emergencies, vendors should be pre-screened and approved to work on Association property. Every now and then management companies and Community Managers receive inquiries from Board Members about the “lengthy” package of paperwork vendors must complete. This usually occurs after a vendor comments to a Board Member that they haven’t received payment despite multiple requests to the management firm.

The truth is, there are just a few forms required of most vendors:

  • a one-page vendor information sheet that gives us their business name, contact and mailing info
  • an IRS form W9 so they can legally be paid with the revenue reported to the IRS; and
  • a Certificate of Insurance that their agent provides to prove that they have appropriate insurance coverage to protect the Association, the property owners, the management firm, and the vendor themselves.

There is also a “Vendor Code of Conduct” that is provided to ensure that vendors have been advised to behave professionally while on property. If the vendor happens to be a Sole Proprietorship, they must also sign a “Worker’s Compensation Indemnity Agreement” to prevent claims against the Association should the individual get hurt on property.

The policy of requiring a completed vendor package is intended to protect the Association against liability should a vendor cause an accident or damage on property. A responsible management company verifies that the business is properly licensed, carries acceptable liability insurance, and that they list the Association and the management firm as additional insureds on their General Liability, Automobile, and Worker’s Compensation policies. This is typically a requirement of the management firm’s insurance carrier.

   


  

In December, Florida’s Department of Business and Professional Regulation released the following bulletin:

Subject: CTMH Homeowner Association Reporting

The Department of Business and Professional Regulation is the agency charged with licensing and regulating businesses and professionals in the State of Florida. Our mission is to license efficiently and regulate fairly.

Unlicensed activity exists within various professions regulated by the department but is most commonly found in the construction and electrical trades. Unlicensed activity affects law-abiding, state-licensed professionals by taking away their business and causes personal and financial harm to consumers. Through our attempts to increase public awareness and by engaging in proactive enforcement, our department works to eliminate unlicensed activity.

  • Some of the construction trades requiring a state license are: air-conditioning, building contractors, general contractors, electricians, plumbers, home inspectors, mold-related services, pool contractors and roofers.
  • Before you hire a contractor, ask to see the state-issued license. Also, verify the license number with DBPR and check for any complaints. Check with your local building department for any local license and to verify whether a permit is required for the work being performed.
  • Get a written estimate from several licensed contractors. Make sure the estimate includes the work the contractor will do, the materials involved, the completion date and total cost.

Unlicensed activity is against the law. The department urges you to report any suspected unlicensed activity by emailing ULA@MyFloridaLicense.com or calling the Unlicensed Activity Hotline at 1 (866) 532-1440. For a complete list of the professions regulated by the department please visit our website at www.MyFloridaLicense.com.

  


  

Delays in payment processing typically occur when the vendor, or their insurance agent, submits incomplete or incorrect vendor paperwork. More often than not, the Certificate of Insurance is completed incorrectly (despite having been provided a sample with the required “additional insured” language).

For any major work done on property (usually exceeding $1,000 or $1,500) the vendor should also be required to sign and notarize a Partial Waiver and Release of Lien for down payments, or a Final Waiver and Release of Lien upon completion of the project, before payment is made. This practice is in place to protect the Association and the individual owners from the attachment of unauthorized encumbrances (liens) against the owners and/or the Association. For more information on Florida Lien Law, please see this article by attorney Steven B. Lesser of Becker & Poliakoff: http://www.becker-poliakoff.com/florida-construction-lien-law or Chapter 713, Florida Statutes: http://www.leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&URL=0700-0799/0713/0713.html.

  


  

Article by Rick Michaud, LCAM, February 11, 2016. With more than 40 years experience in Association Management and Property Management, Hara Management, Inc. has the expertise needed to efficiently manage your Homeowner’s or Condominium Association; or manage rental properties and apartment communities, while providing the highest level of service to Boards and Owners. Contact HMI’s General Manager Rick Michaud, or visit HMI online to learn more about their variety of client-customized services today.

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