Service providers for many strata buildings have become commodities, not the trusted advisors they could be. Depending on the service needed and the skills of the executive committee this may be appropriate. As long as you really know what it is you want and have the time and skills to engage, monitor and properly evaluate the work proposals, the work itself and resolve any disputes – then by all means go for the cheapest. However, if you are short on time or expertise then you may need to consider finding for service providers who are really skilled and interested in a long term relationship – but who many not provide the cheapest upfront quote.
As with determining suitable executive committee members an extremely useful policy is to avoid conflicts of interest in appointing service providers. Ignore it at your peril.
NO CONFLICTS OF INTEREST WITH ANY SERVICE PROVIDERS
However, if there is a goods or service provider that you think is absolutely suitable for the work but they have a conflict of interest (e.g. they are an owner but are keen and skilled and willing to do the job cheaply because it is for their building) you would be very wise to ensure you get three other quotes and evaluate them as objectively as you can. In fact, three quotes are sensible to in most instances. If the cost is anything substantial you would be wise to present the quotes to the owners corporation at a general meeting and ask for a vote – while clearly declaring any conflicts of interest alongside any of the quotes.
You or your building manager may find it easier and even more cost effective to sub-contract regular, ongoing maintenance to just 1 or 2 providers. However, if your building manager is in any way associated with any contractors then this must be transparently stated and alternative options and quotes fully explored.
Advising on their own work?
Be very cautious about getting into long term strata and building manager contracts (lift and energy contracts are the exception here as long as they are well researched and negotiated longer terms can provide significantly beneficial saving to the owners corporation). If the service they provide is good then the owners corporation will most likely renew or roll-over their contract. A long term contract provides less incentive for good, consistent performance.
If you want to retain your valued service providers, ensure that they are paid promptly and fully. Usually your strata manager is responsible for this and they usually do weekly bank transfers. However sometimes things get held up or miss-communicated. So if here is confusion fix it promptly and sort out the process so it does not happen again.
Always check service providers licences, registrations and insurances.
|A key service provider sub-contracted by an external project manager to renovate a strata front lobby area provided invoices with a licence number on them. It was only after the work was done and was not quite what you would expect did anyone actually go on-line and check the license details. The number did not exist. The strata scheme is still currently in dispute with the project manager for this and many other renovation issues. A quick check upfront may have revealed that corners were being cut.|
Do not assume that ‘someone’ has checked the references, licence or insurances of your service providers. Ask who has done this and get the answer in writing on the strata record. Set-up a process and record keeping system where-by existing and new service providers ‘bonafides’ are automatically checked and entered. This is of course important for any job, but be especially beware of one-off, cheap or seeming discount quotes. Of course you may get a genuine great deal – but do your checking very carefully.