What You’re Getting Into Vetting Contracts Before You Sign

Few things can raise one's blood pressure like signing a big contract. That can be especially true for board members or managers signing sometimes mammoth contracts on behalf of a co-op or condo association, obligating their neighbors, friends and themselves to page after page of fine print. Thankfully, there are more than a few ways to get things properly signed on the dotted lines, and it all starts with ensuring a very thorough vetting of the contract in question.

Avoiding Mistakes

It's crucial for a co-op or condominium community to establish successful business relationships, whether with a building contractor or a landscaping firm, and ensuring that a contract is fully vetted and amenable to both sides before work begins. Part of finding that assurance rests in having an attorney carefully examine the contract from top to bottom.

These days, contracts that automatically renew are everywhere, from your New York Times subscription to your NPR contribution. Some of these are convenient, and make life easier by eliminating the need to stay on top of regularly recurring charges. But your Pandora membership is one thing; your condo's laundry contract is another. According to attorney Steve Troup, a partner at the Manhattan-based law firm of Tarter Krinsky & Drogin LLP, “In general, automatic renewal clauses favor the vendor, and should be avoided. I always insist on a clause whereby the vendor must give 60 days advance notice to the co-op or condo of the expiration of the contract, and in the absence of the co-op or condo taking affirmative steps to renew or extend, the contract terminates.”

Attorney Dennis Greenstein, a real estate partner at the law firm of Seyfarth Shaw LLP in Manhattan, agrees. “One of most egregious [mistakes] is the automatic renewal clause on laundry agreements,” he says. “They can be difficult to cancel even if the vendor is doing a poor job, but technically is not in breach of the agreement.”

Ensuring clarity and protecting the co-op or condo’s rights to terminate a contract for poor service also must be considered when signing an agreement. “Other’s mistakes in laundry, elevator and electronic-related equipment agreements include not clarifying the vendor's responsibility or obligation with respect to maintaining and replacing defective and non-operating equipment, or response time to fix the equipment,” Greenstein says.

Read More...

Related Articles

Vetting Your Professionals

Hiring the Best People for the Job

Legal & Liability Issues for Programs & Activities

Get Covered

Conflicting Interests

Recognizing and Avoiding Them