Published December 2016
Editor’s Note: For this article, some of FLCAJ’s legal service providers have commented on pertinent topics that impact community associations.
The proper review and vetting of contracts is one of the greatest responsibilities a board has on behalf of its association members. Frequently such vendor contracts are for long periods of time and involve sizable financial obligations and liabilities to the association. Such contracts also frequently relate to important issues like services for the community and/or capital improvements.
As such, proposed contracts should always be carefully reviewed by the association’s attorney for legal input, including on things such as indemnity, insurance, warranties, and cancelation rights. If the vendor only submits essentially a proposal as its contract, suggest having your attorney create a standard addendum that can be added to the proposal to better protect the association instead of entirely redrafting the contract, which would be more expensive and time consuming. Boards also need to carefully review all proposed business points to make sure the same are exactly what was agreed to with the vendor, the terms are commercially reasonable, and they will properly benefit the needs of the association. Make sure such contracts also include an adequate level of detail on issues like quantities, timeframes, pricing, number of workers, and an agreed upon mechanism to modify the contract later, if needed.
Boards should also be on the lookout for renewal clauses, whereby some contracts automatically renew if not canceled in writing in advance. Avoiding auto renewals is especially important in cases where the association may have otherwise wished to cancel and/or renegotiate such contract. Finally, it is sometimes required by law, and is generally good practice anyway, to get multiple bids from vendors to ensure the association is receiving the best possible quality and pricing on its vendor services and contracts.
Among the more common missteps communities make when considering requests for handicap accommodations is they fail to notify the applicant of the association’s approval of the request. In some instances, a board will consider and approve a request by a resident to keep a dog in the unit, for example, but will omit providing the resident with a written confirmation of the appro-val. Either the board will provide verbal approval to the applicant or a real estate agent or assume the applicant knows it was approved if the board didn’t say “no.” The Department of Housing and Urban Development has concluded that an association’s failure to notify a resident of approval of an application for accommodation as tantamount to a wrongful denial. If the board has approved an application for a handicap accommodation, it is important to make sure the applicant has been notified in writing.
Keith F. Backer, Esq., is the principal shareholder of Backer Aboud Poliakoff & Foelster, a firm serving community associations in Palm Beach, Broward, and Miami-Dade Counties. The Firm was founded by Keith F. Backer, a lawyer with more than 25 years of legal experience in Florida. The law firm was created to provide community associations with the highest quality legal services with a degree of personal attention often difficult to obtain at larger firms. For more information on Backer Aboud Poliakoff and Foelster, call (800) 251-3562 or visit www.bapflaw.com.
Hiring a property management company (PMC) is a critical item for most associations. It is often one of the larger monthly expenses and more visible day-to-day item to residents. Success-fully negotiating a PMC contract is often accomplished when an association utilizes a competitive bidding process.
While not required by the Florida Statutes, obtaining competitive bids from PMCs will likely produce a better result for the association. Bidding allows the association’s board to fully assess its options through the submission of proposals by PMCs. To facilitate a competitive and thorough bidding process, the board should, with input from legal counsel, require bidders to submit proposals via a uniform response form. This uniform form should identify all the key business and legal terms that will form the basis of the negotiation and definitive contract. This approach will flush out potential roadblocks in the bidding phase. When soliciting and evaluating PMCs’ proposals, associations often focus too narrowly on the proposed baseline monthly management fees. Since most PMCs have unique pricing structures and do not always address key legal terms in their bids, proposals submitted to the board without a uniform form are much harder to compare. A detailed and uniform form ensures that proposals can be compared by mandating the format and type of responsive information provided by bidders.
Each association, with input from legal counsel, should consider its unique needs and objectives for both the short and long term. Said factors should be re-visited throughout the negotiation process.