Part of the Maintenance Documentation pillar guide. Vendor records are the parallel file referenced in the pillar; this article goes deeper on building and maintaining them.
Your plumber retires. He’s been your plumber for nine years. You call the number on his card and his wife answers, he’s been retired for two months and forgot to tell you.
You call the next plumber on your list. He can come Tuesday. Today is Friday. The toilet in Unit 4 is leaking onto the floor of Unit 3 below it.
You scroll through your phone looking for the backup plumber’s contact, the one you used twice in 2022. You can’t remember his name. You don’t know if his insurance is current. You don’t know if he’s licensed for multi-family. You start cold-calling.
This is the day you wished you’d built a vendor system. Most property managers have this day at least once.
What vendor management actually covers
Vendor management is four jobs, and most property managers only do one of them well.
Recruiting. Finding new vendors before you need them.
Vetting. Checking insurance, license, references, and basic competence before assigning real work.
Onboarding. Getting paperwork on file, setting expectations, communicating preferred-vendor rates and terms.
Tracking. Monitoring quality, turnaround, pricing, and reliability over time, then making decisions based on what you see.
Most property managers do recruiting (when forced to) and a little bit of vetting (vibe check + a quick reference call). Onboarding and tracking are usually nonexistent. This is fine until something goes wrong, at which point it’s expensive.
Recruiting: build the bench before you need it
The worst time to find a new vendor is when you have an emergency. You’ll take whoever can come today, you’ll pay whatever they ask, and you’ll have no leverage to make them come back next time on better terms.
The right time to find a new vendor is during a normal week, with no pressure.
Where good vendors come from
In rough order of how reliable the source tends to be:
- Direct referral from another property manager. Best source. Another PM has tested the vendor on the same kind of work you do. Buy the other PM coffee.
- Other vendors. Your plumber knows a good electrician. Plumbers and electricians know good HVAC techs. Asking is free.
- Local trade groups and supply houses. The guys behind the counter at the plumbing supply house know who buys high-quality parts and who buys the cheapest junk.
- Online review platforms. Use with skepticism. A 4.9 rating on a home-services platform is not a substitute for an actual vetting process. But it’s a starting point.
- Cold call from a yard sign. Last resort. Sometimes the right answer, often not.
You want at least two vendors per category, plumbing, HVAC, electrical, general handyman, locksmith, appliance repair, drywall/paint, flooring, pest, landscaping, roofing, and snow removal if you’re in a climate that needs it. Two so you have a backup. More than three per category and you can’t maintain real relationships.
The interview
When you talk to a new vendor for the first time, ask:
- Are you licensed and insured? (You’ll verify with paperwork.)
- What’s your typical turnaround for non-emergency calls? Emergency?
- What’s your hourly rate or trip charge? Markup on parts?
- Do you do work in occupied units? Empty turnovers? Both?
- Are you on a property manager’s preferred-vendor list anywhere I’d recognize?
A good vendor answers all five quickly and without dodging. A bad vendor gets vague on rates, evasive on insurance, or can’t give you a number on turnaround. The vague answers are the tell.
Vetting: paperwork or it didn’t happen
A vendor who tells you they’re insured is not insured. A vendor who emails you a current certificate of insurance is insured. Get the certificate.
The vetting checklist
For every vendor you intend to use for real work, get on file before they start:
| Document | Why it matters | How to verify | What “bad” looks like |
|---|---|---|---|
| Certificate of insurance (COI) | Proves coverage at the moment of the work; lists you (and the owner) as additional insured | Have the broker email you a fresh PDF — not a screenshot from the vendor | Expired date, no additional insured endorsement, names a different entity than the vendor on your invoice |
| State trade license | Proves they’re legally allowed to do the work | State licensing board website search — 60 seconds, usually free | Suspended, expired, or held by a different person at the same shop |
| W-9 (IRS Form W-9) | Required to issue a 1099-NEC if you pay $600+ in a calendar year | Vendor self-attests; cross-check business name against COI and invoice | “I’ll get one to you later” — never works |
| References | Real work history with similar clients | Call two property managers; ask “would you hire them again?” | Vendor offers personal references only or refuses to provide PM references |
| Rate sheet or written agreement | Locks in pricing before the pressure of an emergency | Get it in writing on letterhead or in an emailed reply | Vague answers to every cost question |
General liability minimum $1M per occurrence / $2M aggregate is typical for residential work. Workers comp is essential whenever the vendor has employees (or any operation with fall risk like roofing or tree work). Without the full row of paperwork, the vendor is a casual contact — not a working vendor.
Trades and what they require
Different trades carry different licensing, insurance, and federal-certification baselines. The matrix below is a starting point; specifics vary by state.
| Trade | Usually licensed? | Typical GL minimum | Federal cert or rule | Common scope trap |
|---|---|---|---|---|
| Plumbing | Yes (state board) | $1M / $2M aggregate | — | Handyman doing more than a wax ring or faucet swap |
| HVAC | Yes (state board) | $1M / $2M aggregate | EPA 608 for refrigerant work | Refrigerant changes (R-22 → R-410A → R-454B) without 608 cert |
| Electrical | Yes (state board) | $1M / $2M aggregate | — | Handyman swapping receptacles, breakers, or anything in the panel |
| General handyman | No (in most states) | $500K–$1M | — | Doing trade-licensed work that voids your insurance |
| Locksmith | Yes (in many states) | $500K–$1M | — | Re-keying between tenants with no log of who has what key |
| Appliance repair | No | $500K–$1M | EPA 608 if touching refrigerant lines | Sealed-system work without 608 cert |
| Drywall / paint | No | $500K–$1M | EPA RRP for pre-1978 housing | Disturbing painted surfaces in pre-1978 units without RRP-certified renovator |
| Flooring | No | $500K–$1M | OSHA asbestos rule | Pre-1980 vinyl tile / mastic without asbestos test |
| Pest control | Yes (state board) | $1M | EPA pesticide rules | Bait stations vs spray restrictions vary by state |
| Landscaping | No | $500K–$1M | — | Tree removal without ISA-certified arborist or proper rigging insurance |
| Roofing | Yes (in most states) | $1M | OSHA fall protection | Workers comp lapse — falls are the most expensive trade claim category |
| Snow removal | No | $1M | — | Slip-and-fall claims; treatments must be logged with date and time |
The “scope trap” column is what bites operators most often. A handyman is not an electrician. An appliance tech without EPA 608 cannot legally touch refrigerant. A painter without RRP certification cannot disturb painted surfaces in a pre-1978 building. Crossing any of these lines turns a working insurance policy into a denied claim.
What gets missed
The mistake property managers make most often: hiring a handyman who isn’t licensed for the work they’re actually doing. You ask him to swap an outlet. He’s not an electrician. He does it anyway. Two weeks later, an electrical fire. Insurance investigates. They find the unlicensed work. Coverage denied.
You have to know what each vendor is licensed for, and you have to stay inside those lines. A handyman is not an electrician. A handyman is not a plumber for anything past a wax ring or a faucet swap. Cross the line and your insurance becomes theoretical.
Onboarding: set the rules in writing
Every new vendor gets a one-page document that covers:
- Your standard scope expectations (e.g., “Always photograph before and after; always note the unit number on every receipt.“)
- Your approval threshold: above $X, stop and call before doing the work. See owner approval thresholds for how to set this number.
- Your invoicing format: how to bill, where to send it, when you pay.
- Your communication protocol: how you want to be reached for routine, urgent, emergency.
- Your tenant interaction expectations: knock, announce, be respectful, no political conversations, no offering tenants side work.
This document is the difference between vendors who know how to work with you and vendors who guess. The vendors who can’t follow a one-pager won’t follow anything else, either. Useful information.
Tracking: the part nobody does
Tracking is where vendor management goes from a list of contacts to an actual system. You need to know, for each vendor:
- How many jobs they’ve done in the last 12 months.
- Average turnaround from request to completion.
- Average cost per job, and how that’s trending.
- Quality score: how often you’ve had to call them back to redo something.
- Tenant feedback on their work and behavior.
If you have a maintenance record system that produces a Maintenance Record for every job, the data is already there. You just have to look at it once a quarter.
The vendor scorecard rubric
A working rubric for the quarterly review. The cutoffs are starting points; tighten or loosen based on your portfolio and market.
| Metric | Excellent | Acceptable | Replace |
|---|---|---|---|
| Turnaround, non-emergency | Under 48 hours | 2–5 days | Over 1 week |
| Turnaround, emergency | Under 4 hours | 4–12 hours | Over 12 hours |
| Callback rate (rework within 30 days) | Under 5% | 5–15% | Over 15% |
| Invoice clarity | Itemized with photo references | Itemized but vague | Flat “labor + materials” line |
| Tenant feedback | Mostly positive notes | Mixed; no repeat complaints | Repeat complaints, professionalism issues |
| Pricing vs market | Within 5% | Within 15% | More than 20% above |
| Paperwork hygiene | COI / license always current | One reminder per renewal | You’re chasing them |
A vendor with three or more cells in the “Replace” column is a vendor you’re keeping out of habit, not value. Document the call, replace them, move on.
What you’ll find
A typical property manager who actually tracks vendor data finds:
- One vendor in each category is 20-30% more expensive than the next-best option for similar work. Sometimes the price premium is justified (faster, better quality). Often it’s not.
- One vendor has a noticeably higher callback rate. They’re cheaper but they do worse work, and you’re paying for the same job twice.
- One vendor handles 60% of your work in their category because they’re easy to reach. They may not be the best, just the most available.
These are the patterns you can’t see without numbers. The decisions you make based on them (shifting work, renegotiating rates, dropping vendors) are where vendor management actually creates value.
The preferred-vendor list
Once you’ve vetted, onboarded, and tracked enough vendors for a year or two, you’ve built a preferred-vendor list. Two or three names per category, ranked, with rates and notes.
Share this list selectively:
- With your owners. They want to know who’s working on their property. They especially want to know that you’ve vetted insurance and licenses. The list is also evidence that you’re managing well.
- With your team. If you have other property managers, leasing agents, or maintenance coordinators, they need the same list so they’re not freelancing.
- With other PMs you trade referrals with. Build the network.
Do not share it with tenants. Tenants will book your vendors directly, mess up the relationship, and create scope-of-work confusion you’ll spend hours untangling.
The quality review
Every six months, sit down with the list and ask:
- Who do I want to keep?
- Who am I not using anymore, and should I take them off the list?
- Who is causing problems, slow turnaround, callbacks, tenant complaints, sloppy invoices?
The vendors you fire matter as much as the ones you hire. A bad vendor stays on most preferred-vendor lists for years because firing them feels awkward. Don’t be that property manager. A polite “we’re going a different direction, thanks for everything” preserves the relationship and frees you up to bring on someone better. Cleaning out the list also makes tracking property maintenance easier, because you’re not chasing data for vendors you’ll never call again.
When a vendor screws up
It happens. The plumber breaks something while fixing something else. The HVAC tech installs the wrong part. The handyman damages a finished floor.
Your documentation determines what happens next. If you have:
- A photo of the unit before the vendor arrived,
- A scope of work for the job,
- An invoice from the vendor,
- A photo of the damage after,
You have a clean claim against their insurance. If you don’t have those things, you have an argument.
Every maintenance job, in other words, is also a vendor performance record. Treat it that way.
Terms to know
The vocabulary you’ll see on COIs, vendor agreements, and insurance correspondence:
- COI (Certificate of Insurance). A one-page summary issued by the vendor’s insurance broker showing the policies in force, limits, effective dates, and the additional insured. Get it directly from the broker by email — screenshots from the vendor are too easy to fake.
- Additional insured. Naming you (and the property owner) on the vendor’s policy so a claim against you is also a claim against their insurer. The single most important COI provision; a COI without the additional insured endorsement protects the vendor, not you.
- Primary non-contributory. Policy language stating that the vendor’s insurance pays first, before your own, with no demand for contribution from your insurer. Without it, your insurance can be forced to share an exposure that should have been entirely on the vendor.
- Waiver of subrogation. Stops the vendor’s insurer from going after you for reimbursement after they pay a claim. Standard on commercial work; frequently missing on residential vendors and worth specifically requesting.
- W-9 (IRS Form W-9). The form the vendor fills out so you can correctly report payments to the IRS. Get it on day one — chasing it in January is a known nightmare.
- 1099-NEC. The form you file with the IRS reporting non-employee compensation paid to a vendor. The current threshold is $600 in a calendar year to an unincorporated vendor; corporations are typically exempt. Confirm the threshold each year — it has been the subject of legislative debate.
- EPA 608. Federal certification required to handle refrigerants. AC, HVAC, and appliance techs touching sealed systems must hold one. Working without it is a federal violation.
- EPA RRP rule. The Renovation, Repair, and Painting rule. Any contractor disturbing painted surfaces in pre-1978 housing must be a certified renovator. Penalties are real and the rule covers more vendors than people realize (handymen and painters routinely).
- Statute of repose. State-law deadline (commonly 6–10 years) after which a vendor can no longer be sued for defective construction work, even if the defect was hidden. Distinct from statute of limitations, which starts from discovery.
- Mechanic’s lien. A claim a vendor can file against your property if you don’t pay them. Most states require notice within 60–120 days. Knowing the lien-notice window in your state is essential for any contested invoice.
Frequently asked questions
What insurance limits should I require for vendors?
For most residential work, $1M per occurrence / $2M aggregate general liability is standard. Workers comp is essential anywhere the vendor has employees or works at heights (roofing, tree work). Larger commercial buildings, HOAs, and properties with elevators or pools often require $2M / $4M. You should be named as additional insured on every policy, with primary non-contributory language and a waiver of subrogation.
Do I need to issue 1099s to my vendors?
If you pay any unincorporated vendor (individual, partnership, or LLC taxed as a partnership) $600 or more in a calendar year for services, you generally need to file a 1099-NEC with the IRS by January 31. Payments to S-corp or C-corp vendors are typically exempt, with limited exceptions (legal services, for example, always require a 1099 regardless of entity). Get a W-9 on day one so you know each vendor's classification before filing season. The threshold and rules can change — confirm before you file.
Can my handyman do plumbing or electrical work?
It depends on the work and the state. Most states allow handymen to do minor repairs (replacing a faucet washer, swapping a light fixture), but draw the line at anything inside walls, anything involving gas, or anything modifying the electrical panel. Many states also cap unlicensed work at a dollar threshold (commonly $500–$1,000 per job). When in doubt, hire the licensed trade — an unlicensed repair that fails can void your insurance coverage on the resulting claim, and an unlicensed contractor can't generally enforce payment in court.
How many vendors should I have per category?
Two minimum, three maximum, for most categories. Two gives you a backup when your primary is unavailable. More than three usually means you can't maintain real relationships — you'll get worse rates and slower response times because no single vendor sees consistent volume from you. Add a third only for high-volume trades like plumbing and HVAC in larger portfolios.
What's the difference between a certificate of insurance and an additional insured endorsement?
The certificate (COI) is a summary document showing the vendor's policies. The additional insured endorsement is the actual policy language that makes you a covered party under their insurance. You need both. A COI without an additional insured endorsement means the vendor has insurance for themselves — not coverage for you. Always confirm the endorsement is on the policy, not just listed on the COI summary.
How often should I re-verify vendor insurance?
Annually at minimum, on the policy renewal date. Most COIs are issued for one-year terms, so an annual refresh is natural. Set a calendar reminder for each vendor's renewal. A lapsed policy at the moment of a claim is identical to no policy at all — the gap between "their COI expired three months ago" and "they were uninsured when they did the work" is invisible until it matters.
What should be in a vendor onboarding document?
One page. Cover: scope expectations (before / after photos, unit number on every receipt), the approval threshold above which the vendor must call before proceeding, invoicing format and payment timing, communication protocols for routine / urgent / emergency, and tenant interaction rules (knock, announce, no offering tenants side work). Have the vendor acknowledge it by email so you have a record of the expectations.
How do I fire a vendor without burning the bridge?
Be direct and brief. "We're going a different direction. Thanks for your work over [time period]. We'll keep your information on file in case our needs change." Don't list grievances; that invites argument. Pay any outstanding invoices promptly. Many fired vendors come back as referral sources or backup vendors later. The relationship survives if the firing was respectful.
What's the most expensive mistake in vendor management?
Hiring unlicensed labor for trade-licensed work. The savings on the front end ($75 vs $150 an hour) become irrelevant the moment something goes wrong — a fire, a flood, a fall — and the insurance carrier finds the underlying work was unlicensed. Coverage is denied, the owner becomes personally liable, and the property manager faces an E&O claim. Verify the license for every trade-required job, every time.
The Maintenance Record flow exists so that every repair you document is simultaneously a piece of vendor performance data. One year in, you don’t have a folder of receipts, you have a vendor scoreboard.
