RECOMMENDED PRACTICES FOR HOAs WHEN HIRING SERVICE PROVIDERS

When hiring service providers for a Homeowners Association (HOA), there are several key requirements and considerations that should be followed by the HOA’s management personnel to ensure that the providers meet the needs of the community and comply with legal and contractual obligations. Here are the recommended typical requirements for evaluating HOA service providers:

1. Investigate Licensing, Certification, and Standing.

• State and Local Licenses: Service providers must have the appropriate licenses required by state and local regulations. This is especially important for contractors like electricians, plumbers, and landscapers.
• Professional Certifications: Depending on the service, providers may need specific certifications. For example, pest control companies should have certified pest management professionals.
• Standing: For entities (corporation / limited liability company), check Secretary of State public records to confirm that the entity is in “good standing.”

2. Confirm that the Service Provider has Appropriate Insurance.

• General Liability Insurance: This protects the HOA from claims of property damage or bodily injury caused by the service provider.
• Workers’ Compensation Insurance: This is crucial if the service provider has employees, as it covers medical expenses and lost wages for workers injured on the job.
• Errors and Omissions Insurance: For professional services (e.g., accountants, property managers), this insurance covers claims of negligence or inadequate work.

3. Confirm the Service Provider’s Experience and Check References.