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Best Practices for Major Projects

Posted by scalzoproperty on September 25, 2019
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A big project has been in the negotiation stages for months, and now with the nice weather, your association is ready to move ahead and complete that capital project. Whether it’s new roofs, siding, windows or repaving of roads, there are certain best practices that should be followed to ensure nothing falls through the cracks.

To discuss these practices, we spoke with Jason Keller, the Director of Operations at Scalzo Property Management in Bethel, Connecticut.

When hiring a contractor, a board will likely be involved in the interview process and may have an initial meeting with the contractor to define the overall scope of work. Although, once a contractor is hired, the manager should work directly with the contractor and act as a liaison between the contractor and the board. 

To ensure a contractor is adequate, a board and manager should obtain references, according to Keller. “In the planning process, [it can be a red flag] if a contractor has inadequate references that are relevant to the type of work being performed.”

A board and a manager should also ensure that a contractor is not requiring an unrealistic down payment. “If the contractor is requesting too much in advance, that is certainly a red flag,” Keller noted.

After a contractor is selected, it is essential to draft a contract that outlines the scope of the entire project, “which includes any insurance and legal requirements as recommended by the association’s attorney,” explained Keller. The document is “basically written to protect the association,” he said.

He added, “I strongly discourage any communities from simply signing the proposal from the contractor, because it will often have language that protects the contractor and not the association.” 

When drafting a contract, it is important to identify potential conflicts among the contractor, the board, the manager, and residents of the community. “The contract is really the basis for the project, and should be written in a way that accounts for potential issues and offers a plan for resolving those issues.”

An association’s insurance requirements should also be outlined in the contract, and the manager should obtain a certificate of insurance from the contractor. “The certificate should describe the type of work being performed, so it is clear that the contractor has insurance that covers them for the work that they have been hired to do,” explained Keller, who also noted that different states have different insurance products and requirements, and it is important to ensure a contractor is licensed in that area specifically. 

In terms of safety, “the contractor should be setting up the protocols to protect their personnel, but if they have concerns or recommendations to make it safer for their crews, that should be communicated to the board and the manager, and the manager and the board should be accommodating,” said Keller.

Cost overruns should also be discussed when drafting a contract. “Any experienced contractor should be able to identify the most likely potential cost overruns before starting a project,” Keller said.

To avoid delaying a project, a timeline should be extremely detailed in the contract. When creating a timeline, “an association should always add in a cushion, as there is always a potential for things to come up,” noted Keller. “If an association allows enough cushion for delays in the initial planning, then the association looks a lot better when it finishes the project within that time frame.”

Delays may be caused by material delays and other unforeseen complications, or poor planning (which is caused by a lack of communication between a manager and a contractor). However, “weather is typically the biggest reason for delays,” said Keller. Weather can play a role in several different ways — such as snow or rain, and extremely high or low temperatures.

“An association always has to account for some unforeseen complications,” Keller added. “Some delays on a project are uncontrollable, but some certainly can be controlled with proper planning.”

In terms of setting an expectation, the contract should be well-defined and well-written to ensure both parties understand their role in the project. “The more a project revolves around a contract, the better off the association will be,” Keller said.

Once a contract is agreed upon, the manager will act as a liaison between the board and the contractor — communicating any important updates and concerns to the board. 

The manager is also tasked with the responsibility of relaying important updates from contractors to residents of the community. Larger projects and projects of all sizes that affect residents on a daily basis should merit more frequent updates from the contractors. “For example, it could be a very small project from a dollar standpoint, but it could have a great impact on the residents” —  such as redoing a common hallway or seal coating the parking lot, according to Keller. 

If the timeline of a project is frequently being altered, more updates may also be merited. “There are certain projects that we expect the timeline to be disrupted several times, for example outside work that is weather permitting,” said Keller, who suggested that any changes in schedule be relayed to residents and the board.

“With technology now, email notifications seem to be the best way to get updates out because they are instant,” Keller added. 

Despite a well-written contract, if a manager feels a contractor is not fulfilling their obligations, Keller suggested first having an informal meeting with the contractor to address the issues. If the contractor does not respond well, the manager may then put the issue in writing. As a last resort, a manager may get the association’s attorney involved.

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