ACMO Blog

When and How to Change Contractors

As Condominium Managers, a large part of our role is engaging third party trades or contractors to direct the maintenance and repair of the common elements of our clients.  Managing the performance of contractors, as well as maintaining positive relationships is vital to the operational success of a condominium corporation.

Contractors and trades play a key role in making sure the physical structure of the condominium is adequately maintained. Long-term relationships with key suppliers – especially those undertaking preventive maintenance – are important as this helps to ensure good understanding of the building’s needs based on history.  The staff attending the building are intimately familiar with the equipment and can give insight to the manager about how things are performing.  However, there are times when despite the benefits of a long-term relationship you need to consider if making a change is the right thing to do.

Even a great company can have a bad day, bad staff member, or bad luck!  If a contractor with whom you have an otherwise positive relationship provides poor quality of service on a particular project, you shouldn’t jump to make a change right away.  Instead, give them the opportunity to make it right remembering that you catch more flies with honey than with vinegar.  Every Condominium Manager will remember a time in their career when they needed a trade to help them out of a jam.  Don’t let a bad day ruin your future relationship.

If the contractor isn’t interested in making things right, or you begin to have recurring problems, it is probably time to consider making a change.  First, you should ensure that the Board of Directors is aware of the challenges as well as any steps that have been taken to rectify the issues.  It is important to make sure that the Board supports the potential change.  Once you have the support of the Board, you can begin pursuing options.

If, the contractor only provided occasional service to the building (individual purchase orders for various repairs), it is ok to simply begin calling a different contractor to perform those services.  However, if the contractor was under contract to the Corporation you will need to take the time to plan and execute a request for proposal.  In order to do so, you need to understand the following:

1. Any notice period required for cancellation of the existing contract
2. The full scope of work required
3. If the change will have any impact on the Owners or Residents

Notice Requirements

It is recommended not to issue any notice under the contract until such time that you are certain you will be able to have a replacement contractor available, and also that you do not engage two parties at the same time.  Make appropriate calendar notes to make sure that you don’t miss the date that notice is required to be provided under the contract and always provide notice as instructed within the agreement (i.e. don’t issue notice by email if the contract requires personal delivery).

Scope of Work and Tendering

As a best practice, any major contract for a condominium corporation should be tendered using a sealed bid process.  It is highly likely that upcoming changes to the Condominium Act, 1998 will require this as well.  This ensures that all contractors responding to the bid request have equal access to information and maintains confidentiality of pricing until all bids are opened together.

Consider as well if all bidders should be invited to tour the property to better understand the scope of work required.  In doing so, contractors can price more competitively because they don’t need to build contingencies into their pricing due to unknowns.

Sealed bids should always be opened in the presence of at least one Board member.  Remember that as a Condominium Manager you always want to avoid accusations of price fixing or kick-backs so opening the bids with the Board ensures transparency in the process.

Impact on Owners or Residents

In some cases, Owners and Residents also develop relationships with trades or contractors.  For example, a security guard or superintendent can become members of the community and you wouldn’t want to make a change without communicating.  Save yourself from a political issue in the community by communicating any upcoming change, while being mindful of any confidentiality that might need to be maintained.

Finally, keep in mind that when you change a long-term contractor, there are bound to be growing pains.  The new contractor will need some time to become familiar with the property so patience is key.  Hopefully, after a short adjustment the change will make operations smoother.

Lyndsey McNally, RCM, is a Team Leader at Malvern Condominium Property Management.