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Vendor Relationships
by Bill Morris in Cooperator News New York
Cultivating a Board/Manager Partnership on February, 2015
Frequently, there are needs for repairs, replacements, services, cleanings, or renovations; thus, service vendors are necessary trade professionals for condo or association boards. Carmelo Milio, the president and director of property management for Trion Real Estate Management in Yonkers, says when dealing with vendors, you should treat them equally and compare apples to apples.
“You need to treat everyone fairly and professionally,” he says. “When you are going through the vetting process for a particular job, always use the same request for proposal for everyone. Keep the communication open and make sure they know what it is your board or owner wants.”
A vendor treated fairly can become an asset to a condo or co-op. In fact, a building who maintains positive working relationships with vendors could benefit when it is in most need of help. Steven Pinchasick, the president of AMJ Equites in Great Neck, believes strong relationships with vendors are built on honesty, fair treatment, and rational performance evaluation. “Performance, on the part of the vendor as well as the client, cements those relationships,” he says. “There may be times when issues arise, but dealing with them on a one-to-one basis, honestly, and in a timely manner will cement that relationship further.”
Smart Business
Depending on the building, vendors are selected by management companies, boards, or a combination of both. Generally, industry insiders agree that constructing solid working relationships means eliminating areas possible to cause ambiguity and disagreement.
For instance, Josh Koppel, the president of HSC Management in Yonkers, manages over 100 buildings, and is on the phone with vendors daily. In his opinion, proper communication is vital.
Vendors like to be paid on time, and if you can’t pay them on time, communicating with them helps,” he says. “If you ignore your vendor, they will get very angry. If you tell them what’s going on, and are honest, that builds a strong relationship.” Most problems arise when collaboration does not occur and if the contract is not clear, and when both the association and vendor will be pointing fingers to one another in blame.
The physical attributes of a particular building are critical when selecting a vendor. After all, a high- or mid-rise co-op or condo building differs greatly than a more suburban development. “Many vendors have a particular expertise when formulating their assessment of the work,” Pinchasick says. “For instance, a waterproofing contractor must account for pedestrian pathways not normally found in a mid-rise building; another example…a boiler contractor would need to properly estimate the appropriate boiler to push heat to all areas of a garden apartment complex consisting of long runs of piping to multiple buildings.”
Finding Service Providers
In today’s Internet age, the yellow pages have become obsolete, largely, with a plethora of webpages devoted to praising the merits of different vendors. Still, while online reviews are important, most new vendors are hired from referrals. “Often times, we are asked if we look on the Internet to find vendors, and to a certain degree we do, but we are well-aware that finding service providers in general, and finding qualified service providers, is a very different process,” von Simson says. “For the initial introduction of a new vendor into our buildings, we look to the Cooperator Expo, other real estate professionals, and experienced board members or building staff.”
For management companies with many buildings in their inventory, as New Bedford Management does, often it utilizes vendors that have done exceptional jobs at one of its buildings already; then—and only then—will von Simson develop the confidence to refer them to others.
According to Pinchasick, a board has several methods through which to find the appropriate service provider. “They can be found by speaking with their management company, fellow board members, the Council of New York Cooperatives & Condomimiums (CNYC), trade shows, etc.,” he says. “The most prevalent, however, is simple word-of-mouth.” Before working with a new vendor, management will check references; however, if a reference is not someone they have worked with already, the value of the reference is limited.
“Vendors should be researched by the management company, individual board members, or a sub-committee chairperson assigned to that particular vendor type, if such a committee is set up,” Pinchasick says.
Koppel claims that managers of HSC Management will approach service providers on the street if they witness amazing work, in person. “You may see a façade job and they’re nice and clean and the building looks good, so we grab their info,” he says. “Of course, referrals and the Internet are the other ways we will find people.”
Stuart Halper, the president of Stuart Halper & Associates, a management firm in Briarcliff Manor, explains that it’s important to ensure a company is reputable, licensed, and insured; and of course, vetting new vendors is essential. “You have to know who you’re dealing with; the personality, their reputation, how long they’ve been in business,” he says. “It’s a constant process. People come and go, entities come and go, and no one can rest on their laurels because it’s a changing market all the time.”
Securing a Fair Price
If something goes wrong and needs fixing at a co-op or a condo, the board or managing agent is going to choose the correct contractor normally by gathering bids.
Naturally, costs are going to play into a vendor relationship but there are some tricks for securing a fair price without cutting corners or doing something unethical. It starts with education and preparation. “The preferred way to negotiate pricing is to speak with other vendors providing the same or equivalent goods and services,” Pinchasick says. “This is something we typically do for our clients, and almost always yields a positive outcome.”
The best ways to negotiate better prices with vendors is after bids are reviewed, find the bid you like the most, and tell them where they have to get to on their price to get the business. “No vendors like to negotiate against themselves, so simply asking for a lower price has limited benefit,” von Simson says. “Also, let a vendor know you are prepared to pay a deposit on the work, and prepared to pay the open balance within five business days after confirmation that the work was completed properly.”
It’s important for management to constantly assess vendors and their service contracts for pricing, service, and response times. Although there is no set timeframe for assessing service contracts, most in the industry feel every two to three years is a the best option.
Bulk Pricing
In New York City, boards and managers will often get a better price from vendors if they entertain bulk purchases with other buildings. “Buildings can get better pricing on supplies, insurance, and sometimes fuel by purchasing in bulk with other buildings,” von Simson says. “Some vendors will offer bulk discounts to management companies.” Pinchasick says while common sense would dictate that boards would get a better price when purchasing in bulk, not all purchases apply.
Letting Go
Obviously, communication is important throughout a relationship between a building and a vendor; it especially comes into play when a board or management is unhappy with the work that has been performed. This can be handled by phone or email but a record of all communication should be kept.
Koppel says vendors who charge too much or do not communicate or report issues properly will quickly find themselves with one less client. Additionally, vendors who are unprofessional, miss deadlines, are messy at the job site, or are bad in responsiveness will most likely lose the job.
“We don’t want to bad mouth anyone, and if we’re not going to do business with them anymore, we’ll thank them for their business and give them the constructive criticism that we feel is necessary, and we’ll go our separate ways,” Milio says. “At the end of the day, it’s always the board or the management company who will approve them and make a decision.”
Keith Loria is a freelance writer and a frequent contributor to The Cooperator.
