trusted contractors

How to find trusted, third-party contractors

By the editorial team at Story by J.P. Morgan

Q: What should I look for when choosing third-party contractors?

A: Finding a trusted, local professional and protecting yourself from unscrupulous third-party contractors requires some research. By following these helpful tips, you can feel confident in your final decision knowing you’ve vetted all your options thoroughly.

Start with the basics

Start your vetting process with the basics—verifying each third party’s credentials and licensing, searching for complaints written against them, obtaining proof of insurance, and ensuring compliance with mandatory COVID-19 health and safety protocols. Every third party you consider should pass these preliminary tests.

The New York State Attorney General’s Office recommends asking for references, ensuring they’re licensed in the right state(s), and running a quick online search to see if the third party has any actions against them. You can also search the Better Business Bureau’s database to find accredited businesses.

Verify that the third party has insurance and check with your insurance provider to ensure the work is covered and receives all required approvals. Make a detailed list of what’s needed, project timelines and expectations, the permits you need and the building codes to meet. And, if work is planned to commence during the COVID-19 pandemic, make sure the third party follows proper health protocols to keep everyone safe.

Vet third parties for cybersafety

Did you know contractors can pose cybersecurity risks? In “7 ways to protect your commercial real estate portfolio from cyberattacks,” Al Brooks, Head of Commercial Real Estate at JP Morgan Chase, emphasizes that cyber safety doesn’t only apply to third parties who provide services remotely, but to any third party that has access to your private network. He provides this example: if an HVAC worker connects to your system with an infected device, your system then becomes vulnerable to that cyberthreat.

Here’s what you can do to protect your business: According to Brooks, “CRE building owners and investors should ensure their vendor contracts clearly establish liability and responsibilities.” Make sure cyberthreats are included as a potential liability and check with your insurance provider to confirm you’re covered for potential cyberattacks.

Know your properties like the back of your hand

Selecting the right contractor starts with knowledge of your properties. Ultimately, you take responsibility for their work, which means you should take the time to get it right.

“If you’ve got a building built in the 1800s and five stories and three brick thick, and [the contractor has] never really worked with a building like that before, you’ve got to really vet them to your product type and make sure they thoroughly understand not only the material and how to put it together, but the codes aspect of it too,” according to Waddell Wright, Senior Vice President of the Institute of Real Estate Management (IREM). 

It’s also helpful to familiarize yourself with each contractor’s work. Wright recommends going to see it with your own eyes, it can provide a helpful way to gauge contractors: “If somebody walks past this building, are they going to want to hire [them]?” If so, you know you’ve found a contractor you will want to hold onto.

Remember to put your tenants first

All technical and legal details aside, the best contractors put people first. When third-party vendors and contractors are hired thoughtfully, tenants get to enjoy well-maintained buildings, and property managers get to benefit from tenant longevity. According to Wright, “we’re all in the art of providing shelter for humans. Our end product is going to be occupied by someone, and we need to all keep that in mind.”

Sources

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