How to Hire Contractors Wisely

Property managers and landlords do their best to handle maintenance and repairs in their units themselves but there will be situations where a professional contractor is needed.

If you typically only use the yellow pages or do a search on Google, you’ll find a big selection of service contractors. This is something to tend to now for any type of work you might need.  It’s best to check out any contractor before allowing them to work on your plumbing, electrical, HVAC or other equipment.

The Legal and Financial Risks Are a Key Concern

The potential risks may be high when working with unvetted contractors.  If you hire a contractor with a yearly service agreement, you’re assure they will be there when needed, and you’re confident of their caution, skills, and professionalism.

The risks, especially in rental apartment buildings is a concern, including not being to acquire insurance in future.

Therefore, before you hire a contractor to perform any type or size of job, it is wise to conduct a thorough selection process to minimize potential liabilities.

Below are some recommended steps to follow:

• Obtain referrals or find contractors from trusted website such as angieslist.com
• Invite contractors to conduct site visit with you
• Obtain 3 proposals with equivalent scopes for bidding purpose
• If you hire a contractor (e.g., in California, go to Department of Consumer Affairs Contractors State License Board at https://www.cslb.ca.gov/ to perform a license check.
• Make sure the contractor’s license isn’t expired
• look for existing or past complaints and litigation records
• Obtain Certificate of Insurance with a minimum of $1 million of commercial general liability
• Ask contractors if they have any industry credentials
• Check references and identify if any clients file disputes against the contractor
• Check any subcontractors who have worked with the contractor
• Find out how many projects the contractor is working at the same time
• Once the contract is drafted, review the details of contract (e.g. start date and projected completion date, scope of works, payment term)

If your general contractor hires subcontractors during construction, they are fully responsible for any actions of the subcontractor. This is covered in your agreement with them.

Covering All the Bases with Your Contractors

Thus, it’s critical that you require the general contractor to obtain proof of worker compensation coverage from the subcontractor.  Additionally, it’s the general contractor’s responsibility of implementing safety plan and loss prevention practice at the job site where the subcontractor must maintain a safe workplace for all employees.

Your general contractor must perform regular site visits and inspections to ensure the subcontractors exercise all required policies and procedures. For instance, all tools and equipment should be stored in a secured area to prevent hazards that may cause harm to employees. 

General contractor should also perform fire safety assessment since fire can cause severe damages to property and lead to the loss of life.

Some key areas that contractors should look into are:

• whether the building complies with local building and fire code?
• when was the last inspection by fire department?
• any citations from the last inspection?
• are fire exits accessible?
• is the fire alarm monitoring panel functioned properly and certified annually?
• is the fire alarm monitoring system maintained and serviced by licensed vendor?
• is the fire sprinkler system serviced quarterly and certified annually?
• is the fire sprinkler system completed 5-year testing?
• are fire extinguishers being recharged annually?
• are employees trained in using fire extinguisher?
• are all flammable items stored in a fireproof cabinet?

The building emergency action plan is key to fire prevention. The plan should list all emergency contacts and their designated roles in responding to any building emergency.

It is also highly recommended that building evacuation and fire drill to be conducted on an annually basis. All employees should get familiar with the building evacuation route and the location of exits.

Good luck with your building or rental property maintenance in 2024!  Make sure you’re using the latest in Mid Tier software for property managers, to keep your tenants informed. Check out ManageCasa now.

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