RENT Magazine Q2 '23

LESSON #2. Clarify Expectations

Ensure vendors understand the company’s expectations and that the vendor is clear on the processes the company uses for invoicing and payment. Vendors need to understand the differences in property management maintenance and the expectations that arise. For example, when a work order for a HVAC is received, the vendor must evaluate the entire situation. Is the unit over 8 years old? Would it be beneficial to replace the unit instead of incurring a costly expense only to replace the unit 6 months later? Require vendors to include age of the unit, cost to replace, and cost to repair to allow your asset managers to discuss the situation with the owner PRIOR to work beginning. Vendors need to understand the expectations for pricing and never surprise the company with exorbitant costs and unnecessary delays.

LESSON #3. Require and Verify Liability Insurance

Insurance must be required of vendors and provided by the insurance company and not the vendor. Make sure all policies include the property management company as an “Additional Insured”. This will allow you to conduct audits on the policies without involving the vendors. Do not audit insurance policies for vendors on an assigned schedule. Vendors will learn your schedule and adjust accordingly. Randomly audit vendor insurance policies to ensure they are maintaining the minimum coverage required without lapses in coverage.

LESSON #4. Quality Control (Trust but Verify)

While it is imperative to have a degree of trust in vendors, quality control is an integral part of the process to ensure vendors are not only completing the tasks to your standard, but completing all of the tasks they are billing for. Creating a random audit schedule will not eliminate all liability, but it will allow your staff to observe and discover patterns that could prevent you from situations that could affect your reputation.


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