Do You Know Who Your Property Management Vendors Really Are?
In today’s high-risk business environment, small mistakes can have big consequences. For apartment property owners and managers, hiring a company to provide apartment supplies and services without doing a little background work can result in lost time and money, and even reputational damage.
According to industry reports, a significant number of vendors or contractors haven’t been doing a good job of housekeeping. More than 45 percent have experienced a lapse in general liability coverage in the past two years; 31 percent have had a lapse in auto liability coverage in the past two years; and 11 percent have relevant derogatory information in their file.
A vendor without insurance can be a walking time bomb. For example, if a painter without worker’s compensation insurance falls off of a ladder and is injured while working on property, they can easily seek damages against the property. The management company’s worker’s compensation carrier is likely to settle, which could increase the property’s insurance premium. That scenario grows exponentially worse if a resident is hurt by the fall and seeks damages.
However, using an online network of credentialed vendors allows property owners to know exactly who they are hiring. With vendor credentialing systems, property owners and managers can get the low-down on suppliers before they are hired and have peace-of-mind that comes with working with safe and insured vendors.
Here’s a look at how a vendor management system can track and provide assistance for property owners:
- Verification of corporate status, insurance coverage, and business licensing. Also identifies bankruptcies, liens, collections, judgments, and professional licensing.
- National Criminal & Sex Offender Background Check including verifications for principals and vendor employees who work with your staff and on your properties.
- Government Watch List Search to ensure compliance with Federal Laws tied to the 2001 Patriot Act, The Money Laundering Act and Executive Order 13224. Database searches include OFAC database, Money Laundering Database, Terrorist Watch List and FBI Most Wanted Database.
Management of Liability Insurance Certificates
All necessary services associated with tracking insurance and renewal certificates, and securely maintaining them online for 24/7 retrieval.
Management of W9 Documents
Documents on each vendor are stored and can be retrieved easily for review.
Minority Business Enterprise Database
Some property management systems have databases consisting of minority-owned, women-owned and veteran-owned businesses, which can offer lower pricing or more specialized services.
The administrative costs of determining a vendor’s standards is no longer a burden for the property, which can quickly become buried in paperwork, emails, and phone calls. Traditional means to qualify vendors is also expensive: according to industry estimates, the average cost to screen just one vendor is $300, and there’s ongoing work to be done to ensure credentials are current.
With a vendor management system, an online profile is generated based on the information the property owner wants to see, allowing them to easily and quickly learn the truth about a vendor’s capabilities, their financial health, and reputation. And things become much easier at audit time because documents can be accessed online.
Vendor management systems can provide relief for finding the best source to get the job done right, before and after a vendor is hired.
Is checking vendor certification part of your workflow? Or do you use a vendor management system to provide that information for you?