Requirement for liability and workers compensation insurance. Quality checks prior to payment. Progress payments based on work completed. Don't Advance Funds. Associations managing their own projects, large or small, often fall into the trap of advancing money prior to work being done.
Prepayment is a red flag.
Contractors that require prepayment are often in financial straits or do not have adequate credit to purchase the materials needed for the job. Occasionally, contractors disappear with the money or pay another job's bills with it. There can be exceptions to this rule, like purchasing custom built windows or installing special order materials. If this is the reason for prepayment, have the materials delivered to the jobsite and pay the bill directly. Another alternative to prepayment is to have an agreed deposit placed in escrow subject to certain conditions being performed like contractor completing satisfactorily an equivalent amount of the work.