As a community association attorney, I see many contracts come across my desk for review. What concerns me are the number of contracts that do not. You aren’t dealing with Vito Corleone and an irrefusable offer! Any time a vendor is seeking to provide work or services to your community, you are the one in a position of power and it is of the utmost importance that your association insist on some basic protections.
First, you will want to make sure the vendor is licensed, that they are adequately insured, that they provide worker’s compensation coverage to their employees and that they will agree to name the association as an additional insured on their general liability policy. These base requirements will be applicable to most all vendors providing goods and services to community associations and confirmation from the vendor should be insisted upon at the outset.
Next are the legal protections in the contract itself – indemnification and prevailing party attorney’s fees. Simple enough to have input into any agreement, but when omitted can lead to disastrous results. What happens if during the course of a vendor’s work they injure one of your residents or cause damage to a resident’s personal property? You guessed it – that resident is suing the association. Without an indemnification provision, the association will likely have to bear the burden of defending itself and potentially paying for a vendor’s mistake. Now what happens if the vendor does not cause any injuries or property damage, but simply fails to live up to the terms of the contract? If your contract with that vendor does not allow the prevailing party in litigation to recover its attorney’s fees from the losing party, it means that even if your association won its lawsuit against the vendor, the association would not be able to recover its attorney’s fees, which very well could exceed the underlying claim.
Finally, where appropriate, your association should insist that any guarantees or warranties on labor or materials be provided in writing along with the contract and before work begins so that the association knows exactly what the vendor or manufacturer will be providing (or more importantly, not providing). Often, a contract will reference generally that the vendor or manufacturer will provide a warranty but does not specify the duration, limitations or conditions. Make sure to get a copy of these documents before putting pen to paper.
Of course, to best ensure your community’s protection, it is recommended that you retain the services of a community association attorney to review all contracts. Conveniently enough, the contact information for such an attorney can be found immediately below.