BEFORE SIGNING THAT CONTRACT………….

I can’t tell you how many times a new client has come into the office and proceeded to show me a contract that they already signed, without having an attorney look at it first.  They have now realized how one sided it is and how devastating the terms are to the community.  I am then asked “so can you get us out of this?”  Unfortunately, the answer is often times “NO.”

There are so many terms of a contract that are often not included in contracts between an association and a service provider or contractor that can harm the community.  Even basic terms like the start date, completion date, exact scope of the work, price, payment schedules, warranties, cancellation terms, precise automatic renewal terms,  and more are left out of contracts, leaving the association guessing as to who has what responsibilities.   Even worse, horrific terms are often left in the contract which greatly restrict the association’s right to damages in the event of a breach and/or that require the association to sue the provider in a completely different venue.

It still puzzles me when I see an association sign contracts for tens of thousands of dollars or even hundreds of thousands of dollars without first having an attorney take a glance at it.  Associations often learn the hard way very quickly how it was penny wise and pound foolish to try to save a few bucks on a lawyer.

Let me give you an example of a situation I was involved in maybe 15 years ago that I know so many of you will relate to, because I still receive these types of complaints all the time.  It involved a contract between the association and a supplier of laundry equipment.  (Stop laughing)  The association had signed the contract with the laundry machine supplier maybe 20 years earlier and desperately wanted to get out of this deal.  The contract contained a clause that basically said the contract can continue forever, and renews every seven years, as long as the laundry machine company replaced at least 50% of the machines in that 7 year period.  The association wanted me to file a lawsuit and try to get out of this never ending contract.  I did.  I argued to the court that the law generally frowns on contracts in perpetuity and that the contract automatically renewed two or three times by now, and that equity and fairness at this point allows the association the right to get out.   At the hearing, the judge asked me one question:  Was the association represented by counsel before signing that contract?  I answered “No.”  Her response was “Well…..they should have been.  Your case is dismissed.”

So……while The Florida Legislature just gave community association managers the right to negotiate some terms of contracts on behalf of associations, it is a responsibility that I urge managers to be very careful with.  It’s all in the fine print.  Directors and CAMs should be smart and get an opinion from counsel before putting your John Hancock on the contract.  If not, you may find yourself in a life time marriage with no possibility of a divorce.

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