A Licensed Contractor Has a Complaint Disclosure Listed on Their License-Should They Be Dropped Off The "Preferred Vendors List" Maintained by a Management Company?
Many CID management companies perform basic background checks of vendors who wish to provide services to CID's. A background check may include verifying a contractors license (checking that complaints don't exist), being named as an additional insured on liability policies, verifying workers compensation is in place if the vendor has employees etc.
What happens though when a management company posts a vendors name on it's website and says it "endorses their services and expertise"? In my opinion, they step into a mine field.
It's one thing to verify a vendors credentials, but it's quite another to endorse a vendor. For one, if something goes wrong with that vendor, the client will remember that you told him to use them. Secondly, your firms integrity is on the line. Third, the management company will now have to monitor the vendors reputation, if it sinks for whatever reason, clients will think that you should know that. If you don't and there is a hit on a vendors reputation, they will wonder why you didn't know that and pull that vendor from your list of endorsed vendors.
A recent case in point-
The Management Trust-Goetz-Manderley maintains a list of "trusted partners" who in TMT's own words "endorses their services and expertise". Endorse meaning "declare one's public approval or support of."
One of their endorsed vendors is a general contractor/waterproofing company called DeckTech, Inc.
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| Risky business when "endorsing" a company? |
Decktech Inc has a
complaint disclosure on their license listing with the CSLB that alleges serious license violations of the Business & Professional Codes governing businesses. While their license is currently active, the disclaimer reads-
DISCLAIMER: Any complaint listed is only an allegation of a probable violation. A complaint does not affect the status of the license at this time. If a complaint is referred to the Office of the Attorney General for legal action, it may result in the suspension or revocation of the license. Pursuant to 7124.6 of the Business and Professions Code, the following complaints meet the criteria for disclosure.
and then following the disclaimer, the complaints against Decktech Inc are listed.
In the words of The Management Trust "TMT only admits the very best vendors as Trusted Partners, vendors who value workmanship and professionalism above their bottom line". What liability or exposure to risk does a management company have when a "trusted partner", has a complaint disclosure on their license and they leave them on their trusted partners listings?
CSLB only lists accusations such as this when certain criteria has been met, that being-
7124.6. (a) The registrar shall make available to members of the
public the date, nature, and status of all complaints on file against
a licensee that do either of the following:
(1) Have been referred for accusation.
(2) Have been referred for investigation after a determination by
board enforcement staff that a probable violation has occurred, and
have been reviewed by a supervisor, and regard allegations that if
proven would present a risk of harm to the public and would be
appropriate for suspension or revocation of the contractor's license
or criminal prosecution.
Unless The Management Trust, in our opinion, removes Decktech Inc from their list of "trusted vendors" they open themselves to criticism, accusations of self-dealing and if something went wrong on a job being done by DeckTech, Inc, possibly being named in a suit as a cross defendant.
If Decktech can clear their name and no complaints are listed, then certainly it would be of to reinstate them on the list, but as we see it, the stakes are too high to risk your reputation based on another firms diminished standing.
What are your thoughts? Tell us in the comments.
