Hiring a contractor is an important decision for an HOA because the board is spending association funds and choosing someone to work on property that residents share. Taking a few steps before signing an agreement can help you avoid disputes, unexpected costs and problems with the quality of the work.
Here are the key things to address before you hire someone.
Confirm the project and your authority
Before requesting bids, make sure the work falls within the HOA’s responsibilities and that you have authority to approve it. Review your declaration, bylaws and other governing documents for requirements about board approval, owner votes or spending limits.
If you manage a New Hampshire condominium association, state law generally allows the board to act on the association’s behalf. The condominium documents can place additional limits on that authority.
Compare several contractor bids
When practical, obtain multiple bids and compare what each contractor actually proposes to do rather than choosing based only on price. Look at:
- The scope of work and materials
- The estimated schedule
- The total cost and payment terms
- Any exclusions or additional charges
A lower bid may not cover the same work as a higher one, so make sure you are comparing similar proposals.
Check qualifications and insurance
Before selecting a contractor, verify the qualifications and insurance that fit the project. Ask about experience with similar work, check references and confirm any required trade licenses or permits.
You should also request proof of appropriate insurance, such as general liability coverage and workers’ compensation when applicable. Confirm that the coverage meets the needs of the work you plan to have completed.
Document the board’s decision
Once you choose a contractor, document approvals and keep the bids, supporting materials and final agreement with your association records.
New Hampshire law allows condominium board members to discuss and compare vendor proposals outside a formal board meeting in certain circumstances. The board must still take any final action at a properly scheduled meeting.
Review the arrangement before signing
Before work begins, make sure the final agreement matches the project you approved, including the work to be completed, expected costs and timing. Reviewing the governing documents, bids and proposed agreement with an attorney can also help you identify approval requirements or contract issues before they become costly problems.
Once everything is in order, you can give the contractor clear instructions and let the work begin with fewer surprises. A thoughtful process at the start can make it easier to manage the project and protect the community’s interests throughout the work.