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ESSENTIALS OF SERVICE CONTRACT
January 1, 2001
Contracts for goods, services and repairs are a common
occurrence for community associations. Yet, even with this
common occurrence, there are always problems and disputes
that are associated with a contract. Many times, the
contracts do not spell out enough of the details that are
essential in a fair agreement. In all cases, the
association's attorney should review all details and
contracts prior to the association executing a contract.
By taking your time and making sure that the following
elements are integrated into any contract that the
association enters into, it should help to eliminate many
of the common problems associated with service contracts.
1. Changes to the contract, should be spelled out as to
how they will be handled, how they will be executed and
paid for by the parties involved with the contract.
2. Who is the point of contact for the parties involved?
This should be spelled out in order to eliminate people not
in power from interfering in the work.
3. Any details that will help to delineate exactly what
should maintained or repaired should be included as an
exhibit to the contract. This would include any pictures,
maps, photos and drawings helping to clarify the written
word.
4. How will any disputes be handled. Will they be
addressed through litigation or arbitration? How will pay
for the expense of this procedure?
5. Proof of insurance should be provided in a prescribed
form prior to any work being performed. Also, as a
precaution, the association should be named as an
additional named insured in order to be notified
immediately of any change of status in the
contractors/vendors insurance status.
6. Both the contractors and the association's
responsibilities should be spelled out in detail. This may
include a minimum amount of men or equipment that is
required to be on the job. Maybe it includes certain times
and days that the association must allow the contractor on
the property or certain preparation that the association
perform prior to the contractor starting their work.
7. The contract should provide details and specifications
in enough detail in order for the work to be accomplished
to both parties satisfaction. This would also spell out
any alternates to the work being performed in cases there
could any delays in materials.
8. There should always be a start date and a completion
date stated in the contract and what the penalties would be
to either party if there was a problem with the start or
end performance.
9. The termination of the contract should always be
defined by both parties and be made a part of the contract.
10. The terms of the contract should always be spelled out
and defined. This would include any billing procedures,
when any payments are to be made and when any extras to the
contract should be billed and paid.
11. All warranties should detailed and spelled out and
agreed to by both parties. In addition, how quickly will
the warranty work be performed after notification? How
should the warranty item be declared to the contractor.
Any manufacturer warranty information should also be
attached attached to the contract.
A Board of Directors, by addressing the above issues and
agreeing to the various items with your contractor, can
eliminate most of the potential problems in your next
service contract.
Copyright 2007© Associated Property Management of the Palm Beaches, Inc.
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