Papers, Please What to Know When Hiring Contractors

Whether it is redesigning light fixtures in a common space or replacing a roof, repair jobs and capital improvement projects are like death and taxes: they're inevitable. Though an HOA's property manager most often handles the hiring of contractors and oversees the execution of the job, problems and issues often arise that make it important for board members to understand licensing, documentation and accepted protocols of working with contractors.

The Basics

All too often, projects run long, cost more money than expected or contractors do not meet state mandated requirements for conducting business. These variables lead to headaches. So aside from cross-referencing recommendations, the most important aspect of hiring a contractor is determining that all licenses and insurances are current, explains West Palm Beach-based Attorney Alterraon Phillips who specializes in construction and Americans with Disability Act (ADA) issues.

“Anyone looking to hire a contractor should always request a copy of the contractor’s construction license, occupational license, and general liability insurance,” says Phillips, a state-certified building contractor with Phillips & James Construction Consulting in Loxahatchee. “A board/manager should request to be listed as additional insured on the contractor’s general liability insurance. For new construction, it's also recommended that the board/manager acquire builder’s risk insurance or require the contractor to obtain builder’s risk insurance for the project.”

Equally important at the onset of a project is requiring that the contractor have a payment and performance bond in place. “This will ensure the project is completed even if the contractor fails to be able to do so,” says Phillips. “Additionally, it ensures that the subcontractors and material suppliers are paid so a lien is not placed against the project/property.”

Sandi Copes Poreda, director of communications for the Florida Department of Business and Professional Regulation (DBPR), says that it is essential to obtain copies of all documentation and have it verified. “Generally, the Department would recommend that any consumer demand to see a copy of the contractor’s state or local license and a copy of their liability insurance certificate and workers’ compensation insurance certificate/worker’s compensation exemption,” says Copes Poreda. With this information, consumers can verify state licenses by visiting www.myfloridalicense.com.

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