Condo Media - September 2019 - 34

Not Worth the Paper They're Written On
PROVISIONS YOU DON'T WANT
There are many provisions associations
want to include in their contracts, but
there are also some provisions they don't
want to accept. Any language labeled
"standard" or "boilerplate" tops Shaffer's
list. "These are not good words," he says.
They usually describe provisions that
are one-sided-in favor of the vendor.
The most common-and most objectionable-examples include:
Self-renewal clauses. With this
language, the contract will
renew automatically unless the
association indicates that it does
not intend to do so, and provides
that notice usually "no less than
90 days but no more than 120 days"
before the current contract ends.
That's a narrow window in which to
act, Shaffer notes, and vendors who
include this language are usually
counting on a board's failure to do
so. Unless someone is paying close
attention to the notice requirement,
the association could get caught in an
endless loop of automatic renewals
with a contractor the board wants to
replace. That's why these provisions
are known as "evergreen"-because
contracts containing them can literally last forever.

contractor's work
will depend as much
on the quality of the
contractor as on the
clarity of the contract.
Right of First Refusal. Somewhat
less common than self-renewal
provisions, but equally undesirable for community associations,
this language entitles the existing
vendor to match the material
terms offered by a competing firm
when an existing contract ends.
This means if a vendor you want
to replace meets the terms offered
by a vendor you prefer, you will be
required to renew the existing vendor's contract, even if you'd rather
eat sand than continue dealing with
that vendor for another minute.
Unreasonable limits of liability.
Some professionals will propose
language limiting their liability to
the size of their contract. Under
this provision, if you pay an architect $25,000, his or her liability
would be capped at that amount,
even though a damage claim for
design flaws could be several times
that amount, Shaffer notes. "You
want to watch out for these provisions, for sure," he advises.
Extended terms. Long-term contracts make it difficult for boards to
replace vendors they don't like and
limit their ability to take advantage
of better offers from competing
firms. For that reason, with a few
exceptions (for laundry service and
telecommunications contracts, for
which long terms are common),
Shaffer doesn't think associations
should accept vendor contracts
lasting more than two or three

34

CONDOMEDIA September 2019

years. Associations that sign longerterm agreements should make sure
they have a viable escape clause,
Shaffer advises. The "termination
for convenience" clause that is
desirable in most contracts will
be essential in these.

The quality of a

A few more contract pointers
for boards and managers:

1

Document your relations with
vendors. If you are going to claim
a vendor has breached a contract,
you will have to be able to prove it.

2

Don't let complaints fester.
Deal with concerns as they
arise and try to work them out.

3

Don't accept one-sided contract
provisions, but don't insist on them
either. Contracts should be fair to
all parties.

4

Select vendors carefully. The
quality of a contractor's work will
depend as much on the quality of
the contractor as on the clarity
of the contract.

5

Have the association's attorney
review contracts before signing
them. Yes, you've heard that advice
before, but that doesn't mean you
should ignore it. "After I signed the
contract" is about the last thing
attorneys want to hear from clients.
It's like saying "After I jumped into
shark-infested waters ..." Other
than "We'll be happy to notify your
next of kin," there isn't much for an
attorney to say or do in response.
It's a lot easier and less expensive
to have an attorney identify and
avoid contract alligators in advance
than try to wrestle with them
after the fact.
n NENA GROSKIND IS PRESIDENT
OF ECONTENTPLUS, PROVIDING
EDITORIAL CONTENT FOR
WEBSITES, PRINT AND ELECTRONIC
NEWSLETTERS AND MAGAZINES.
Condo Media - September 2019

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