Management Company starts a Landscaping Co

Started by JerryD5 • 7 replies • 1114 views

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JerryD5 (Colorado)
Posts: 218

Posted:

I had a meeting with our management company today to go over some final tweaks for our upcoming yearly budget. One of the last variablbes was with our current landscaping company. They, like many others in our area, have had some huge issues (timeliness, quality of work, etc). We did ask for some bids of new companies and many of the bids were way out of our price range. We have had one that was 3 times our current price.

As it turns out, our management company has started their own landscaping company and will be soliciting work from associations they manage, including ours. Our PM said her and her partners are fed up with the quality of work they have encountered over the last couple of years with local landscaping companies. They feel they can do a better job. We are our 4th landscaping company in the 7 years I have been on the board. All the previous companies were terminated (or not renewed) because of their poor performance. I am intrigued with the thought of a management company with a landscaping business.

Has anyone else have a management company with a landscaping side to their business? I am curious if anyone else have experience with a similar setup. Or possibly severed ties with the lanscaping company and kept their management company?

MelissaP1 (Alabama)
Posts: 13,836

Posted:

I would follow the same protocol as past contracts as I would with the MC. Make sure they are licensed and insured in the landscaping business. They aren't mixing funds or insurances into the landscaping business. They can have the same name and owners of course. However, the landscaping portion should stand on it's own.

Do not sign a contract for more than a year. Sign a contract outside of the MC's existing contract. Treat them like any other contractor in my book and see how it works. They may find there are an inherent quality issues and complaints in landscaping no one can overcome.

Former HOA President

DaveD3 (Michigan)
Posts: 796

Posted:

The management company should have NO input into the selection of the landscape company if they're a bidder.
Performance measures and guarantees should be included as part of any of the contracts. It shouldn't be merely assumed that a brand new company will do a better job than others in the business, especially when you appear to be shopping on a budget.

ND (PA)
Posts: 792

Posted:

Our management company does offer landscaping services, but I think they sub-contract that work out and are not doing the landscaping themselves. Either way, we don't utilize that service, so I'm not much help there.

Also, I would find it out of the ordinary to sever ties with a landscaping company to make sure the management company is retained. If that's the case, I might seek out a different management company . . . you know, one that wants to make their primary business actually managing the association.

Did you rely solely on the management company to find potential landscapers? If so, I'd suggest Board members do some research of local companies and try to get more bids. Our previous management company made similar claims of a lack of capable landscaping businesses in our area. I called BS and did my own research, coming up with plenty of companies who wanted to bid and also finding our two most recent landscapers who have been more than willing and capable.

In regard to a management company offering landscaping services . . .

You'll need to assess what sort of relevant knowledge and expertise the Management Company will have within their landscaping side business. Simply because they want to create a landscaping business does not mean they will possess the knowledge, skills, and abilities to be successful. Landscaping is much more than just cutting the grass every week (at least for us here in PA).

I'd also expect their bid to come in lower than every other bid that you've already received . . . since they already have the info on that. In that case, they're bidding to beat the competition, not because they actually have experience to know what they need to charge. You would need to have evaluation criteria other than price . . . past performance (references), appropriate type/quantity equipment, other services offered, availability vs. demand (how many other clients they have).

If you go this route, you'll definitely need a quick way out within your contract if things don't work out. And what is the impact on the relationship with the management company if you have landscaping-related issues?

Just some food for thought . . .

CyrstalB (Maryland)
Posts: 457

Posted:

In theory this seems like a good idea, but in reality, it's a terrible idea, as most HO's will see it as a "pay to play" type deal. It will cause more grief than good. HO's will doubt you as a board because of it and we all know they don't view boards and their members correctly as it is. They do not really understand that the mgmt. co. doesn't make the actual decisions, and in this case it will breed doubt on the whole HOA administration.

SueW6 (Michigan)
Posts: 814

Posted:

Since you would be asking for references from any company hired, this new company would have to provide you with a list of satisfied customers. Can they do that?

If not, then disregard them. I would not hire a company with no experience and one that lacked a customer list for reference.

JerryD5 (Colorado)
Posts: 218

Posted:

Thanks for all the input/advice.

The landscaping company has already been performing work in the area and is a stand alone company. They do share common investors/partners. The landscaping workers will not be involved in MC business and the MC company employees will not be doing landscaping duties. The landscaping company supposedly has a competent and adequate workforce/equipment to start bidding on more contracts (this according to the MC). We, of course, would ask them in-depth questions about their work, ask for references, etc.

In my brief discussion with the MC yesterday, the owner did specify that any contract signed would be independent of the other company. So if we were to terminate the landscaping contract based on non-performance, it would not impact our management contract (and vice versa).

To answer another question, we would sign a snow removal for Oct-Apr and a landscaping contract for Apr-Nov. We would only sign it for the season, not a multi-year contract. The contract would contain all the standard performance criteria and 30-day out.

The final piece to all of this is if they would be competetive in price. If they are above our price range, then all this is moot.

JonD1
Posts: 2,350

Posted:

Jerry

Lawn care is not rocket science. And the fact the MC has now started a lawn care service should not in and by itself disqualify them from bidding on your property.

You seem to have a clear understanding of how to research service providers, how to examine proposals, and how to review contractors for consideration.
I would use normal due diligence in reviewing whether this might work for both you and this newly formed company.

My suggestion get a list of other properties they now service, drive over and inspect them and perhaps speak to residents and board members for their opinions.

As you suggested sign for one season and then consider whether to continue or not.

One service has nothing to do with the other.

To solve the pricing issues request other companies provide bids without the MC having access to those bids.

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