Prevent Automatic Contract Renewals in Service Contracts, By: Nicholas J. Meinert, Esq.

Community association boards execute contracts on the association’s behalf with various types of contractors to maintain, repair, and replace their associations’ common elements. Project specific contracts involve a contractor completing a particular project, for example, replacing the roof of a building. Project specific contracts should always include a start date and completion date requirement.

Service contracts involve a contractor performing a service for the association over a particular period of time, for example, snow removal services, landscaping, and laundry equipment. When contractors provide association boards with proposals for service contracts, the contract often includes an automatic-renewal clause. If an automatic-renewal clause exists, the association is often required to notify the contractor within a specific time period before the contract term ends that the association will not renew. Once the contract renews, the  board typically cannot cancel the contract without paying a large penalty, and the contract often renews for anywhere between a month, to five years, depending on the contract language.

A board should always attempt to negotiate the automatic renewal provision out of the contract, or, at  a minimum negotiate a longer period of time to give notice of non-renewal. If your Association already has contracts with automatic renewal clauses, now is an ideal time to mark your calendars with the dates of  the auto-renewal deadline. Do not miss the  opportunity to part ways with contractors who are not performing to the board’s satisfaction.

Categories

Three bars icon gold

Recent blog Posts

Three bars icon gold

Ohio Senator Introduces Legislation with Drastic Government Overreach Into Community Association Operations

On September 29, 2026, Senator Brenner introduced Senate Bill 476, which proposes significant changes to ...
Read More →

Why Is Preventive Maintenance One of Your Association’s Most Important Investments?

When budgets tighten, it can be tempting for associations to delay maintenance projects. After all, ...
Read More →

K&C Partner, Scott Weiss quoted in Wall Street Journal

Before purchasing a home in an HOA or condo association, it’s important to look beyond ...
Read More →

Kaman & Cusimano Attorneys recognized by the Best Lawyers in America®

Kaman & Cusimano is proud to announce that 8 K&C lawyers have been recognized in ...
Read More →