Comparing In-House Maintenance vs. Third-Party Contractors
Condominium corporations must decide whether to hire in-house staff or outsource work to external contractors. Each approach has benefits and risks that must align with the corporation’s financial, operational, and legal requirements.
In-House Maintenance Staff
Advantages:
Greater control and oversight over staff performance.
Staff members become familiar with the property’s needs.
Faster response time for routine and emergency repairs.
Disadvantages:
Increased administrative burden (hiring, training, managing payroll).
Limited expertise for specialized repairs (e.g., HVAC, elevators).
Potential liability for workplace injuries or improper repairs.
Outsourcing to Third-Party Contractors
Advantages:
Access to specialized expertise and licensed professionals.
No need to manage payroll, benefits, or workers' compensation.
Can be more cost-effective for one-time projects or seasonal work.
Disadvantages:
Less control over timing and quality of work.
May require longer lead times to schedule services.
Potential risks of contractor disputes or incomplete work.
Factors Influencing Outsourcing Decisions
A condominium board should assess the following factors before deciding to outsource services:
Cost Considerations
Short-term vs. long-term costs – Is it more cost-effective to hire an external service provider or maintain in-house staff?
Budget constraints – Does the corporation have enough funds in the operating budget or reserve fund for outsourced work?
Expertise and Licensing Requirements
Some maintenance tasks, such as electrical, plumbing, or elevator repairs, must be completed by licensed professionals.
If the corporation lacks in-house expertise, outsourcing ensures compliance with safety regulations and building codes.
Efficiency and Availability
In-house staff may handle daily maintenance, but complex repairs often require specialized equipment and trained contractors.
Outsourcing may provide faster turnaround for urgent repairs or seasonal services.
Liability and Insurance
The condominium corporation must ensure that all contractors carry liability insurance and workers' compensation coverage.
The Real Estate Act Rules require condominium managers to act in the best interests of the corporation, ensuring contracts are free from conflicts of interest and legally sound.
Ensuring Outsourced Work Complies with Legal and Insurance Requirements
To protect the condominium corporation from liability, a manager must:
Verify contractor credentials, including licensing and insurance.
Ensure contracts are legally binding, outlining payment terms, warranties, and performance expectations.
Confirm workers' compensation coverage to protect against liability for injuries.
Require proof of completion before issuing final payments.
As per the Condominium Property Regulation, condominium corporations must ensure that all contracts for maintenance, repair, or services are properly documented and comply with financial management obligations.
Managing Relationships with Ongoing Service Providers
For recurring services, such as janitorial work, snow removal, or landscaping, condominium managers should:
Set clear expectations for service frequency and performance standards.
Monitor contractor performance and address issues proactively.
Review contracts annually to ensure competitive pricing and quality service.
Develop alternative vendor relationships in case a primary contractor fails to meet expectations.
Creating a Decision-Making Framework for Outsourcing
To help condominium boards decide whether to outsource or use in-house staff, a structured evaluation should include:
Decision Criteria
Is the task routine or specialized?
Does the corporation have in-house expertise and staff availability?
What are the cost implications of each option?
Are there legal requirements that necessitate outsourcing?
Risk Assessment
Does outsourcing introduce risks related to contractor performance or liability?
Are safeguards in place to protect the condominium corporation’s financial and operational interests?
Vendor Selection and Compliance Check
Does the contractor meet all licensing, insurance, and regulatory requirements?
Are contract terms clear and legally enforceable?
