You can’t operate a condominium or co-op without a myriad of services, which is why a well-run home association or building requires that it has strong vendor relationships. That means getting supplies and services smoothly and at the best price, which is why a board of directors or management company needs to stay on top of its vendors and the contracts it holds with them.

“The best negotiation tool is education,” says Mary Faith Nugiel, president of RCP Management Company in Monroe. “Boards need to know the going rate for services in their area. This information can be obtained from the property manager or directly from other associations. Boards also need to make sure they are getting a fair price. Having multiple bids also helps a board to find out the market value of a service and negotiate a better price.”

Establishing great relationships with vendors is an important component of any board’s financial and physical maintenance and maintaining solid, long-lasting connections will benefit everyone involved.

David J. Byrne, a Lawrenceville-based attorney with Stark & Stark, who is co-chair of the firm’s Community Associations Group, believes that a good relationship is essential to the process and will make things smoother for all people involved.

“It’s easy to forget that vendors are people, too and by taking the time to talk with them about issues and not erupting at the first sign of a problem, it can go a long way in establishing trust and understanding,” he says. “Working with vendors is a vital component of a board.”

Finding Vendors

When it’s time to look for new vendors, contacts are established through ads, the media, word-of-mouth, personal recommendations and manager research.

“There are several ways to find a service provider. One of the best ways is to tap into the wealth of experience of the management company or the manager,” Nugiel says. “The managing agent has vast experience with contractors that have experience dealing with community associations.”

Occasionally, the board members themselves will bring recommendations to the table. Board members who have previously served on other boards may have had good experiences with specific contractors and may want to bring this to the association.

While the manager may recommend contractors, the final decision is ultimately the responsibility of the board. In a good working relationship, the manager may make recommendations based on past experience.

“Generally, a managing agent decides who gets on the bid list and the board makes the choice,” says Byrne. “I think personal relationships, previous experience and/or the experience of a colleague or managing agent whose opinion you value rule the day. These methods are paramount because they are probably likely to give the board the best chance at a successful outcome.”

Jack Ippolito, president of Primo Uniform Rental, which provides uniforms for condominium personnel and building staff professionals throughout New York and New Jersey, says his company is often contacted thanks to word of mouth and personal recommendations.

“Uniform supply is a personalized service and most of the large national providers cannot provide the personal service that an independent company can,” Ippolito says. “Building owners and managers enjoy the personal relationship and excellent service they experience with small business owners.”

The manager is typically responsible for the initial background work on contractors and vendors, but since it’s an area that will affect everyone, more people usually jump on board.

“I have seen the checking done by board members, and I’ve seen the checking done by [managing] agents,” Byrne says. “Typically, the checking is done the old fashioned way by phone call, and detailed questions.”

For larger jobs or bids, Nugiel recommends a board or a committee visit references to see the contractor’s work first hand.

“It is important for the board to always remember that they are the body ultimately responsible for all decisions of the association,” she says. “You don’t want to make an uneducated decision, so there’s no such thing as too much background in these cases.”

Secure Measures

Vendor relationships can be affected by the size of a condo or co-op building. With a high- or mid-rise building, the relationship can be different than a more spread-out development, depending upon the components of the building.

“A board should choose a vendor based on experience. Vendors that know how to service a development don’t necessarily know how to service a high-rise building,” Nugiel warns. “In either situation, however, good communication between the vendor, management company and board is crucial.”

Larger buildings often have security, which is paramount to residents. Therefore, having a solid, established relationship with the service contractors is important.

Safety is always a concern, so therefore you want to make sure that any service contract requires their workmen to be uniformed and provide a foreman for the job, who communicates well with the manager.

A Better Deal?

Some believe that a board should reassess their vendors every year to ensure they are getting the best deal possible, but others feel that could lead to a lack of trust and isn’t always necessary.

“In my opinion, there’s no set time and that if a board/agent is happy with the vendor and the service, it should continue along,” Byrne says. “A building or client can get quite a benefit by establishing a relationship with a vendor that lasts a long time so there’s not always a need to rework a contract.”

Many management companies encourage long-term relationships between vendors and associations and with good reason.

“The longer the two entities work together, the better the relationship becomes,” Nugiel says. “A good rule of thumb is to enter into three-year contracts with 30 or 60 day cancellation clauses. This allows time to develop a good professional relationship.”

If the vendor relationship is a strong one, it’s more advisable to invite the vendor to attend a board meeting to discuss any issues that concern the board and work to rectify those issues.

Ippolito says a vendor should meet regularly with either the board or an appropriate committee as face time is an important factor in the development of trust between the board, homeowners and vendor.

Bulk Business

Although it seems like a logical business step, obtaining bulk purchases with other managed properties is never an easy thing to accomplish.

“It is possible to get a better price through bulk buying, either through a relationship with other buildings or developments or through the management company,” Nugiel says. “It’s not often done.”

While many associations remain with management companies on a long-term basis, some do not for a variety of reasons, and that can certainly complicate matters. Therefore, it is difficult at best to bundle properties to take advantage of bulk pricing and expect the relationship to last over time.

Ippolito says that prices for large purchases and large rental orders can be volume discounted in some cases, but it’s important to ask about these deals up front.

“Unfortunately, in today’s environment, inflation has hit every corner of business,” he says. “Sale prices can be negotiated to a certain extent. Most prices that are quoted are already discounted and unless it is a special order for oversize garments or a custom item like a logo mat, prices will stay where they are. Uniform rental can be discounted and negotiated since this is a service and therefore can be customized to the customer’s needs.”

Final Thoughts

Byrne says that if a board has a longstanding history with a contractor and there are not any price increases and service is meeting expectations, the board may want to periodically solicit proposals from a few competitors to serve as a benchmark.

For routine maintenance contracts such as landscaping and snow removal, many boards enter into multi-year contracts and those should be re-evaluated at the end of the contract term to determine if pricing and service still meet the association’s expectations.

Whether it’s a company supplying heat, elevator service or refuse removal, a good vendor will work with a building to ensure that both parties are happy and remain so.

Keith Loria is a freelance writer and a frequent contributor to The New Jersey Cooperator.