When it comes to dealing with the myriad professionals who help make a co-op or condo association run smoothly, licensing can be a significant umbrella protecting board members and residents alike from potential problems. Choosing a licensed professional to serve as accountant, to build that pool house, to manage the lawn and shrubbery or remove snow each year will help ensure that the job is being done well and completed in a way that will be beneficial to the association both in terms of quality and liability.
Knowing what to look for in terms of licensing and knowing when to ask the big questions in terms of qualifications are two vitally important skills for board and management alike to possess. Happily, there are a significant number of resources available in the state of New Jersey to help sort out the issue of licensing, a topic that can be overwhelming. It is a subject that should never be glossed over, however, no matter how much confusion it might inspire.
First Things First
The State of New Jersey's Permits, Licensing and Certification website (www.state.nj.us/LCI) offers a handy guidebook outlining exactly which professions need what kind of licenses to do business within state borders. The fact that the list runs 57 pages should suggest the thoroughness with which the state tackles the subject of licensing. Nearly every imaginable profession, from being a jockey to running a child care facility to selling organic produce, is listed, outlining which individuals and corporations need licenses, which must be certified and which must register with the state or other government entities.
For co-op boards and condo associations, the most important entries have to do with those professionals with whom they work on a consistent basis: attorneys, engineers, HVAC technicians, electricians, plumbers, irrigation system installers, landscapers, laundry facility providers, builders and construction firms, accountants, interior designers and others. On that list, the only profession that does not require some form of licensing, certification or registration from the state of New Jersey is interior design.
Some of the licensing requirements include the obvious ones such as certification from the New Jersey Board of Bar Examiners for attorneys. An engineering firm must have a license from the State Board of Professional Engineers and Land Surveyors, part of the New Jersey Department of Law and Public Safety's Division of Consumer Affairs. That department also offers licensing for landscapers, homebuilders and contractors engaged in home improvement. Laundry facility providers must secure licensing from the New Jersey Department of Environmental Protection's Office of Water Quality, while the company that installs and maintains the association's sprinkler system each year requires certification from that same department. When it comes to the men and women who tackle those electrical, plumbing and HVAC problems, certification and licensing become even more complex. HVAC professionals require a license from the Office of Boiler and Pressure Valve Compliance, an entity within the Department of Community Affairs. At the same time, they also require an electrical and plumbing license and Freon certification from the United States Environmental Protection Agency and they must register with the Division of Consumer Affairs' Department of Law and Public Safety.
Why such an exhaustive list? For the protection of the consumer, mostly. "There are a lot of regulations but there's good reason for it," says Scott Piekarsky of Piekarsky & Schettino, a law firm based in Hackensack. "With licensing boards, there's accountability." Dealing with an unlicensed service provider might leave little recourse for the board if something goes wrong. "There's the ability to file complaints and there are investigators and strict rules that apply. A licensing board also means that there will be pretty quick responsiveness (when a complaint it lodged)."
New licensing and registration requirements come down the pipeline on a fairly regular basis. In 2005, the Contractors' Registration Act went into effect, requiring for the first time that those contractors engaged in the business of selling or making home improvements register with the Division of Consumer Affairs. If a firm did not register by December 2005, they would be prohibited from obtaining building permits and could face civil and criminal penalties for continuing to conduct business in the state. Tens of thousands of New Jersey builders were affected by this new law.
Looking For Something More
Beyond licensing, other designations and certifications can help separate the wheat from the chaff, so to speak, serving as a factor when it comes to making hiring decisions. The most important factor in deciding whom to hire should be "what kind of professional experience he or she has in this industry," says Jules Frankel of the East Brunswick-based Wilkin & Guttenplan accounting firm. "You don't just want some guy who happened to pass the CPA exam. The question is, how much experience can they bring to the table?" It's the same with other professions, he says, citing the example of an engineer. Co-ops and condo associations most likely would want to work with someone who has earned the designation of reserve specialist. "You want someone who is going to specialize in the needs of co-ops and condos."
Boards also will want people who are at the top of their game. The New Jersey Nursery and Landscape Association, for example, issues certification to qualified members of the horticulture industry. Landscapers with a Certified Nursery and Landscape Professional designation after their names have gone through intensive training on everything from plant species and identification to soils, environmentally-friendly insect and disease control, nutrient and water requirements and landscape design. Designations such as these show that the individual or firm have gone the extra mile in seeking to provide the best service possible for its clients.
Frankel urges boards and managers to ask questions before they hire people. "What is their industry experience? What's the depth of that experience?" he says. Having a well-educated professional can help the board beyond just the basics by serving as an educator and a source of suggestions. "(With regard to accounting), most boards are made up of lay people and they're responsible for thousands or millions of dollars." A well-qualified accountant can help them learn more about their fiduciary duties, leading to a better-informed and therefore more effective board.
Accountants and other professionals are there to provide advice, as well. "If you're dealing with someone who's outside of the (co-op and condo) industry, they won't be able to provide you with the advice and suggestions that are applicable to your particular situation," Frankel says.
Sorting Through the Paperwork
When it comes to licensing, how can a board or manager ensure that they are getting what they are paying for? By doing a little research and getting everything in writing, says Piekarsky. Most boards will have things like licensing, certifications and proof of insurance written into the initial contract with the company or individual. "God forbid something happens, you'll want to know they are covered and in turn will indemnify the building," Piekarsky says.
If you want to know if the company is as good as they say they are, then do a little digging. "You'll want to know their background, their experiences and training," Piekarsky says. "You'll want good and bad references, people who didn't renew their contracts with them. You'll want to make sure that non-renewal wasn't because of anything terrible." It does not hurt, too, to ask about past litigation or other claims. With companies such as contractors, HVAC people and others who might get involved with large-scale jobs, it's important to ask about their experience doing jobs that size—do they have the proper equipment and enough personnel to complete the job quickly and well.
From a legal standpoint, keeping a tab on licenses, insurance and certifications is wise. "You never know if the company has maybe failed to pay some dues or fees and been added to a list of inactive licenses," Piekarsky says. "And sometimes you'll have to look beyond the document they've given you because that certificate of insurance may have lapsed if they forgot to pay their premium." Checking annually on these licenses or before each new project begins should be the responsibility of the co-op or condo association's management firm. And when it comes time to signing or renewing a contract each year, the board's attorney should be involved in reviewing or drawing up new papers. It may save quite a bit of money in the long run, should any litigation arise from a breach of contract or other legal problem.
The final lesson when it comes to licensing? Ask questions, check and double check and then maybe check a little more. It's like your mother always told you: better safe than sorry.
Liz Lent is a freelance writer and a frequent contributor to The New Jersey Cooperator.