Contractor Management Checklist

Pull the contractor's license number and confirm active status with the state contractors' board (CSLB in CA, TDLR in TX, etc.). Reciprocity does not transfer — a Florida-licensed roofer working a Georgia property needs a Georgia license. Capture the expiration date so the renewal reminder lands before the next engagement.

Get the W-9 before the first payment, not at year-end. Note whether the vendor is a sole proprietor / single-member LLC (1099-NEC required if paid $600+) or a C-/S-corp (no 1099). Year-end 1099 scrambles caused by missing W-9s are the most common accounting fire-drill in property management.

The certificate of insurance must list the management company AND the property owner / LLC as additional insured — not just as certificate holder. A vendor injuring a tenant on a unit where the owner is only the certificate holder leaves the owner personally exposed. File the dated PDF in the vendor folder.

Standard floor for residential trade vendors: $1M per-occurrence / $2M aggregate general liability and statutory workers' comp. Sole-proprietor handymen often try to waive WC — accept only if the state allows a sole-proprietor exemption form on file. A vendor employee injury without WC becomes the owner's claim.

Spell out materials grade, fixture model numbers, finish color, and acceptance criteria. Vague scopes ("replace the vanity") are the source of most change-order disputes. Reference unit-specific make-ready or capex-plan items so the bid is comparable across vendors.

Most owner agreements require three bids over a dollar threshold (commonly $2,500 or $5,000). Attach the PDFs and note any vendor declines — owners sometimes ask why a usual vendor wasn't considered.

Replacing a $400 garbage disposal is a repair (deductible immediately). Re-roofing a building or replacing all unit appliances is a capital improvement (depreciated). Misclassification at invoicing time is the year-end-tax headache. When in doubt, ask the owner's CPA before coding the work order.

Capex projects exceed the discretionary-spend authority in most management agreements. Send the bids, scope, and recommended vendor to the owner in writing and wait for written approval before signing. Verbal approvals collapse when the depreciation hits the K-1.

Standard structure: deposit on signing (10-25%), progress draws against milestones, 10% retention released on final lien waiver. Conditional waivers go with progress draws; unconditional waiver only at final payment. Without a final unconditional waiver, a sub of the GC can lien the property even after you've paid in full.

Counsel checks indemnity language, limitation-of-liability caps, mechanics-lien notice provisions, and dispute-resolution venue. Skip on small repair POs; required on any capex contract or any vendor where the engagement extends beyond a single visit.

Plumbing, electrical, HVAC, structural, and roofing typically require permits; cosmetic work usually does not. Confirm whether the contractor or the owner pulls — owner-pulled permits are a red flag (vendor avoiding licensing scrutiny). Unpermitted work surfaces years later at refinance or sale and is expensive to legalize.

Walk the unit with the foreman, confirm scope on-site (not just on paper), agree on access protocol (lockbox code, hours, occupied vs. vacant), and note tenant-notification requirements — most states require 24-48 hours written notice for entry to occupied units.

Catch deviations from spec before drywall closes the wall. Photo-document with HappyCo or zInspector and tag the unit and work order. Mid-job is the cheapest place to fix substitutions; punch list is the most expensive.

Any scope change — added work, material substitution, schedule extension — gets a written change order signed before the work proceeds. Verbal change orders create year-end invoice disputes that the manager almost always loses.

Walk the unit with the contractor present, list every defect with photos, and get the foreman's initial on the punch list. Either it's clean (release final payment minus retention) or there are open items (hold final payment until cleared).

Return to the property once the contractor reports completion. Do not accept photo-only confirmation for paint, flooring, or fixture work — substitutions are common. Final payment is held until this re-inspection is signed off.

Get the signed unconditional waiver from the GC AND from any subs over the state's lien-claim threshold before releasing the final check. State forms vary (CA Civil Code §8138 has a mandatory form). Without this, a paid sub can still file a mechanics lien against the owner.

Match line items to the original scope plus signed change orders. Code the invoice in AppFolio / Buildium / Yardi against the right GL account (repair vs. capex per the classification step) and post to the owner's ledger.

Tag the payment in the property management system so January 1099-NEC generation picks it up. Sole props and single-member LLCs need a 1099-NEC at $600+ cumulative for the calendar year; corps don't. Cash payments over $10,000 also trigger IRS Form 8300.

Score on schedule adherence, scope adherence, communication, and tenant-facing professionalism. Repeat-vendor decisions next quarter draw on this. Note any callbacks within the warranty period — they're the strongest signal of work quality.

COIs expire annually. Set the reminder for 30 days before the certificate's expiration date so a lapsed COI never authorizes a vendor on-site. A lapsed-COI vendor accident is a personal-liability event for the manager, not just a paperwork miss.