1-888-800-1042
Kaman Cusimano Logo

Condo | HOA Lawyers

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

Partner Nicholas Meinert Presents at Northern Ohio CAI Chapter on the Corporate Transparency Act

On June 14, 2024, Partner Nicholas Meinert presented to the Northern Ohio Chapter of the ...
Read More →

Partners Dan Miske and Lydia Chartre presented at Wisconsin’s Chapter of CAI on reserves and lending

On May 23, 2024, Partners Dan Miske and Lydia Chartre presented a webinar for the ...
Read More →

Strengthening Community Associations: The Vital Role of a Comprehensive Assessment Recovery Policy and Procedure

Community associations are founded on principles of shared responsibility and collective maintenance. From maintaining common ...
Read More →

Partner Nick Meinert presented at OLCA’s Spring Conference

Partner Nicholas Meinert gave a presentation at the 2024 Ohio Lake Communities Association’s Spring Conference. ...
Read More →