Requirements for Vendors

I am on the BOD, recently our management agent gave us a bid for having some painting done in our clubhouse. We (the BOD) got another estimate that was several thousand less. They finished the work and want to be paid. We did get a COI(Certificate of Insurance) prior to him starting the work. Now the management company says they need a tax I.D.#, and workmans compensation. He is a sole propriertorship and our state only requires it if you have 3 or more employees, so his social security # is all that is required. Is there a standard way for dealing with small vendors and still be covered liability wise ?

Regarding liability, even being a sole proprietor he should have some sort of insurance.

My suspicion is that the COI provided was liability insurance in case the vendor damaged the HOA property during the work.

There is another way to deal with small vendor (read as the law doesn't mandate them to have their own workman's comp insurance) in that the HOA can purchase it's own policy that in effect does the same thing as workers comp. It's not all that expensive and our analysis was that we actually saved money by being able to use sole propietor businesses that offered much lower costs for services than the big boys.

You have to judge each situation/HOA differently, but it is possible.

Mary,

Workmans comp is a State sponsored tax program where you pay on wages paid to employees. Unless it is different in Arizona, how do you figure what your HOA owes. I had to have SS#s and wages earned to figure what percent of the wages I owed for the comp fund. Wisconsin also had each type of service rated according to risks of the job. Hairdressers were a lower risk that pilots or whatever example we use. Taxes are also based on that criteria.

Barbara,

Whoa there, the management company gets money from the vendors to get jobs? , can anyone else smell an illegal activity here called bribery?

Donna,

All I know is that at a recent board meeting our PM announced that our assn carries workmen's comp.

I know of a MC locally who will have his maintenance guys (all independent contractors) bid on jobs and then add a percentage to the bid; if his guys get the job, he makes money.