By Richard Halberg, CEO, Kidstuff Playsystems, Inc.
A large part of my job as CEO of Kidstuff Playsystems, Inc. is answering questions about playgrounds, playground safety and playground safety surfacing.
Playground Safety at Your Community Association
First, there are a couple of documents that pertain. ASTM is a quasi-governmental agency that writes standards for a wide range of manufactured products in the US. ASTM F-1487 is the playground standard that we adhere to in order to provide International Plan Equipment Manufacturers Association (IPEMA) certified equipment.
It covers such possible safety hazards as sharp points and edges, protrusions, inadequate use zones around the equipment, heights of barrier walls, sizes of openings where a climber meets a deck, heights of slide side rails, and on and on. So look for an IPEMA-certified playground manufacturer when you are ready to make a playground purchase. A document available for purchase that is more consumer-oriented is the US Consumer Product Safety Commission publication #325 Public Playground Safety Handbook. It is a great resource for the lay person who wants to gain some general knowledge about safe playground design and practices.
The number one cause of accidents on playgrounds is a fall to a hard surface under and around the playground. Adequate safety surfacing is a must to protect your association from a lawsuit. If you use wood chips, the most affordable of the approved options, you must maintain a depth of 9-10” to remain safe. This will require periodic raking and replenishing, and eventual replacement of the wood chips. Other surfaces such as poured in place rubber and artificial turf require less maintenance but are up to 5 times more expensive.
The average life of a playground is about 15 years. After that time parts begin to deteriorate, maintenance becomes more extensive and expensive, and aesthetically the assets appear “old”. While not the typical case, a few well maintained playgrounds can last as long as 20 years. Maintenance is important, because as an example surface rust must be treated or it will eventually lead to structural failure.
Playground Safety for Children of All Ages
Another consideration is the ages of the children that will be using the playground. There are a different set of ASTM standards for ages 2-5 and ages 5-12. It is possible to provide a playground set for ages 2-12 but it has to be designed to the 2-5 standard. This results in a playground that is quite boring for the older age group. Ideally, your association should provide a separate playground for ages 2-5 and one for ages 5-12. Each playground should be clearly marked with a sign or a sticker on the equipment as to the appropriate age group of the users.
Playground safety is paramount. Regular routine maintenance is time well spent. See a playground professional to help you plan a playground that is appropriate for your situation and your budget.
Richard Hagelberg, CPSI, co-founded Kidstuff Playsystems, Inc. with George McGuan in Gary, IN in 1982. Richard has a masters’ degree in early childhood education and operated child care centers, leading him into the playground field.
By CAI Editorial Staff, CAI Rocky Mountain Chapter
As members of the Community Association Management industry, most of us would probably assert that, all in all, we feel relatively safe at work doing our jobs. Unlike firefighters, police officers, and others who are intentionally put in the way of danger in their line of work, as members of our industry, the fires we put out and the bullets we dodge are (hopefully!) figurative instead of literal.
However, it is still important to take your safety and security and that of your co-workers seriously, and to do what you can to minimize risks within the workplace. Below are some suggestions.
By Patricia A. Book, Ph. D., Willow Springs Community Association
Should we install large, flashing “driver feedback” signs on our neighborhood streets?
The Board called a special community meeting to discuss this issue featuring the City Traffic Technician who had conducted a traffic mitigation study for us. The study involved temporary driver feedback signs that collected traffic volume data and speeds in our community. We have 460 units (single-family, patio homes, and condos). We also have significant community amenities in our neighborhood, including walking paths, a pond, tennis courts, a playground, and a pool with a Club House so foot traffic is relatively high with residents of all ages walking with or without dogs, biking, scootering, or skateboarding.
The City and I led the wide ranging discussion of stemming the flow of speeders in our neighborhood after reviewing prior data. Based on that study, our Board's first attempt at traffic taming, was to recommend the City install driver feedback signs. The signs turn off at 11 p.m. and turn back on at 5:00 a.m. and do not require a neighborhood petition approving their installation. However, the City Technician shared his unsuccessful efforts to get homeowner approval to install large driver feedback radar signs on their property. The signs would have to be placed in homeowner’s yards, which are small on street frontage.
Over 30 people attended the meeting and emotions ran high. Perspectives ranged from “there isn’t a problem” and therefore “we should do nothing” to “we need to get City police stake-outs to write speeding tickets”. Some felt the situation was critical and that we weren’t counting the “near misses” and that it was only a matter of time before tragedy strikes. One member present finally said in frustration that he had lost a child (not on our streets) and those who hadn't were lucky.
Our neighborhood was built in the 1990s and was built out long ago. We are now experiencing turnover with many young families moving into the community. The amenities are wonderful for the children, but parents are concerned about traffic and observations of speeding particularly near the pool and playground.
We are not a through-way so the speeders are our neighbors and our service providers. Among all the options discussed, the Board's sense was that "speed tables" (not the hard bumps of yore) were the most favored option among those present and concern about speeding was validated at least among the majority of this group of homeowners. But the straw poll was not necessarily representative of the whole community.
What did the data say and is it compelling?
Our streets are fairly wide and there is little on street parking. There is little street friction, therefore, to cause the driver to feel the need to slow down. The posted speed limit in our community is 25 mph. During the period of this study, the majority of residents were within the posted speed limit. On two streets, the average speed was 24 mph. At the 85th percentile, used by traffic engineers as a benchmark for "safe, reasonable, prudent" speed, we found the majority were doing 28 mph or less. The other 15% were driving in excess of the norm at greater speeds. Of these, 43.7% were traveling greater than 25 and 8.1% were travelling at speeds greater than 30 mph. Roughly a third were travelling over the speed limit on two streets and on one, 43.7% were travelling in excess of the norm.
This later street connects to an arterial road with a stop light that favors demand on the arterial road. The “green time,” therefore, for egress out of our community is becoming increasingly problematic as growth continues and traffic volume on the arterial road grows with continued development. This causes the increased speeds on this connector street as people try catch the green light.
The bottom line is that the data analysis for our community met the three criteria qualifying us for City traffic mitigation based on volume and speed or distance and visibility.
What are our options?
What are all the options open to a community concerned about traffic safety in their neighborhood? We discussed many options and here is what I learned:
It is important to remember that traffic mitigation is designed to mitigate the upper speeds--the top 15th percentile—even though the majority of homeowners are driving safely. Traffic taming is a pressing issuing for our communities as growth around us affects traffic volumes. We have a perceived problem, with evidence to support the perception but we do not have consensus on either the problem or the potential solutions.
Our future path is not yet clear. Our hot topic is still sizzling!
Patricia A. Book, Ph.D. is President of Willow Springs Community Association and serves on the CAI-RMC Board of Directors as a Community Association Volunteer Leader. She is a medical anthropologist by training with an academic career leading university professional and continuing education programs.
By John Ganoe, CAE, CAMICB
When thinking of homeowner associations, condominiums or cooperatives many people overlook the evolving complexities of community association management. Before hiring a community association manager it’s important to understand the breadth and depth of what running a business entails, which is precisely what community association managers do.
A knowledgeable and committed community manager holds the Certified Manager of Community Associations (CMCA) credential. This is an important distinction. As a board member, trustee, or volunteer leader working with your association or cooperative, you have fiduciary responsibilities that obligate you to make decisions that may have a profound financial and social impact on your community. Receiving professional and accurate advice and guidance on issues such as reserves, maintenance, insurance, budgets, governance, contracts, the law, and rules enforcement can mean the difference between prosperity and chaos.
By taking and passing the rigorous CMCA examination, a CMCA has a proven and solid understanding of the business operations involved in being a community association manager, including:
Further, CMCAs must comply with continuing education requirements in order to maintain their credential. This is done through a process called recertification and is the cornerstone of best practices in the credentialing industry. Recertification is an ongoing process designed to promote and prove continued competency in the community association management profession. This competency is demonstrated through participation in continuing education in the field of community association management by participation in at least 16 hours of continuing education coursework every two years.
Maintaining High Ethical Standards
Due to the importance of community association managers' professional responsibilities, CMCA’s must adhere to very high Standards of Professional Conduct, which govern their professional activities. These Standards of Professional Conduct range from understanding laws applicable to community association management, to being knowledgeable on association policies and procedures, to carrying out fiduciary responsibilities, and participating in continuing education coursework. Abiding by these Standards of Professional Conduct help protect consumers and associations that hire community association managers.
A Community of Motivated, Educated and Dedicated Professionals
To locate a CMCA in your city or state, simply visit the CAMICB directory of Credentialed professionals: https://www.camicb.org/find-a-cmca. Here you will find a wide community of professionals who often interact with one another at networking events, continuing education programs and industry conferences. This strong network of CMCAs provide one another an opportunity to share innovative ideas, best practices, support and guidance. Every housing community is unique; more experience and more knowledge are invaluable as CMCAs actively work to provide the best possible service to your association.
Linda Warren, CMCA, AMS, PCAM, of The Warren Management Group sums it up nicely, “Owner expectations have changed dramatically over the past 30 years. Managers understand they may not have all the answers but as a CMCA, they know where to find the right resources, thanks to a powerful network of experts to help answer the tough questions.“
By Heidi E. Storz, Esq., Benson, Kerrane, Storz & Nelson, P.C.
During the last legislative session, the Colorado legislature passed House Bill 17-1279. The new law, now codified as C.R.S. § 38-33.3-303.5, creates additional hurdles for community associations to jump over to hold developers and builders responsible for shoddy construction. The law does this by creating new requirements that must be met before a community association is entitled to bring a claim in court or arbitration.
The requirements of the new statute kick in when the notice of claim process has failed, and community associations are left with no other choice but to take legal action against developers and builders. Before taking such action, however, a community association must now provide additional disclosures to homeowners and must hold a homeowner meeting. The developer/builder is entitled to attend the meeting with the presumed purpose of trying to convince homeowners not to vote in favor of further legal action. After the homeowner meeting, the association must collect written votes from a majority of the homeowners within a specific timeframe.
Happily, the additional disclosure requirements in the statute are relatively evenhanded and are disclosures that most construction defect attorneys have typically already provided to associations and homeowners. Per the statute, homeowners must now be informed that:
With respect to the homeowner vote, the legislature did try to even the playing field by limiting whose votes will count to meet the majority requirement. For example, the statute specifically excludes votes for units that the developer/builder still owns, votes from bank-owned units, votes from unit-types that do not have defects, and votes from units where the owners are deemed “unresponsive.”
If an association is within a city that has enacted a construction defect ordinance that spells out different disclosure and voting procedures, the new state statute is expected to override the city ordinance. Similarly, if the association’s governing documents spell out different disclosure and voting procedures, it is anticipated that the new state statute will override the association’s governing documents.
Though the new statute creates additional hurdles for associations to jump over to hold developers and builders responsible, the hurdles are manageable and will not stop associations and homeowners from obtaining redress in court or arbitration. Given that developers and builders were originally pushing laws designed to provide them with a complete shield from liability, the legislature did well in enacting House Bill 17-1279.
Heidi E. Storz, Esq. is the Managing Partner of Benson, Kerrane, Storz & Nelson, a law firm that represents homeowners and community associations with construction defect cases.
By Jason Domecq, R3NG, LLC
As a licensed roofing contractor serving the HOA industry, one of the most common questions I receive when meeting with different community association boards is “What do you recommend we do about our roof situation?” For any property, the roof is one of the most important systems. An informed roofing selection, along with proper installation, will protect your investment, add immediate value, and most importantly, shelter residents from the elements.
If you’re planning to maintain or replace your roofing system, here’s are a few things to consider:
A contractor who is licensed, insured, supported by a major manufacturer and highly respected in the industry are just a few key aspects to consider when selecting a contractor. These qualifications can be validated by:
Choosing the right contractor is like choosing a great pair of shoes: there are a lot of contractors to choose from, but it’s crucial that you identify one that’s a good fit. Consider a contractor the community trusts and is comfortable with. Nancy Sinatra said these boots are made for walking. You don’t want the boots running all over you!
Think of the future when considering the type of shingle to be installed. Which direction is the board taking the community and how does the community want to look in 10-15 years? Is there a potential to paint next year, or in five years? The type of shingle selected will define the look, feel, and contribute in the future property value. When determining the type of shingle there are, primarily, three different types:
A few accessory items to consider when replacing the roof system are:
Once a contractor and materials have been selected, it’s important to know that the roof system is being installed correctly. Best practices by contractors include:
Most states require a licensed contractor to provide a minimum 2-year warranty for a roof replacement. When reviewing warranty options, consider a contractor that is supported by a manufacturer. GAF, for example, stands behind a select few contractors, supporting the availability of a 25-year workmanship warranty. These select contractors are licensed and insured, have a proven track record of superior installations, enjoy respectable relationships within the industry, and will stand behind their work. It’s important to know that you can count on both the contractor and manufacturer to be there for the community after the project is complete.
The climate your community resides within plays a huge factor on how much and how often your roof may need a little TLC. For example, a climate that experiences hot and dry summers followed by cold and wet winters needs to have the sealant used on the roof inspected on a yearly basis. This will ensure there isn’t water penetrating the building. Preventive inspections mean less maintenance, and will significantly minimalize the costs associated with larger repairs caused by water penetrating the roof.
There are clearly many things to consider when you need a new roofing solution. With my decade of industry experience with R3NG, I believe the most important is your community’s needs both today and 10-15 years from now. Once your goals are set, remember these key points:
R3NG, LLC is an affiliate of Community Preservation and Management, LLC (CP&M) a licensed and Insured, locally-owned-and-operated Colorado General Contractor with more than a decade of experience serving our residential and commercial customers.
By Bryan Farley, RS, Association Reserves, Colorado
As the population in Colorado continues to grow a steady rate, one may notice the many new housing developments, high rises, and condo complexes popping up around the state. These properties look great, with fresh paint on the walls, roofs that do not leak, and elevators that work when called. However, within a few years these buildings will start to experience the same issues that plague every other building in the area, asset failure.
This dilemma is not only limited to new projects, but also to older buildings that have just undergone a renovation or remodel. In fact, all new construction will experience a state of deterioration once the project has been completed.
How can owners be motivated to raise Reserve Contributions after the board just special assessed the owners to fund the remodel? How can a board of a brand new condo building justify raising Reserves when the majority of the owners closed on their units six months ago?
The answer of course is that as soon as the new construction has been finalized, the assets will begin to decay and deteriorate at a predictable rate until all of the assets have failed completely. However, the assets will not all fail at the same time. For example, the roof may last twenty-five years, but the carpet may only last eight years. If the failure and replacement of the assets do not occur at the same time, how will the costs of these assets be evenly distributed throughout the life of the building?
It is only fair that each owner pay for the predictable deterioration of the assets that are gradually deteriorating each month/quarter/year. That is fundamentally what a Reserve Study attempts to help owners accomplish, take all those irregular Reserve expenses and distill them down to a steady deterioration rate that the association can then offset be collecting contributions from all the current owners in order to keep pace with the ongoing deterioration of the common area.
That is why the Reserve contribution rate recommended in a Reserve Study is not for a future expense that is some other unlucky person’s problem. The recommended Reserve contribution is designed so each homeowner pays a fair share of ongoing Reserve component deterioration during the months and years that they own in the association. It’s only fair. In fact, it is unfair for any current owner to pay less than ongoing deterioration, forcing some unlucky future owners to over pay due to past under-reserving.
Moving forward, how much should current owners contribute to Reserves? In our experience, “adequate” Reserve contributions typically make up anywhere from 15% to 40% of an association’s total budget. The cost of Reserve component deterioration can be expensive, so there are ways to minimize your Reserve contributions:
Reserve components are expensive and are deteriorating every day. A Reserve Study will provide guidance on how much money will be needed each year to pay for the ongoing asset failure. Each year, owners should hire a professional to review and update their Reserve Study.
By commissioning a Reserve Study, a board takes the first step toward a calmer and proactive future. Prudent planning for inevitable repair and replacement costs will benefit future owners, but present owners benefit also. With a Reserve Study boards and managers can help the present generation of owners understand that they, too, can enjoy their share of the benefits of prudent reserve planning.
By Robert A. Woellner, QUEST Environmental
We often think of residential mold as a homeowner issue, but sometimes the water damage that leads to mold growth impacts a shared location in a multi-unit residential building. Water damage may be caused by a roof leak, building envelope damage that has allowed water to intrude from the exterior, or migration of released water from one unit to another (particularly flowing downward into an underlying unit). In these instances, mold growth may become the community association’s concern. Should this be the case, it will be useful to know the basics of mold assessment in order to provide the best service to your homeowners and reduce the community association’s risk.
Ambient Microflora Assessments
An ambient microflora assessment is the best choice when it is not known whether indoor mold growth is present. Perhaps an occupant begins feeling sick in their home and suspects mold exposure, or perhaps there is a musty odor that can’t be traced to an obvious source. An ambient mold assessment could also simply be precautionary, such as following a water release that was promptly dried.
During an ambient mold assessment, an industrial hygienist or mold inspector will conduct a visual inspection to search for signs of water staining, damage, and visible mold growth. If any of these are observed, the inspector will attempt to identify the potential source(s) of moisture. The inspector should also utilize a moisture meter to check for moist building materials in the area of concern. (Building materials containing more than 12% moisture content are typically considered to be moist.) If available, an infrared thermometer/camera can be used to check for moisture-related temperature anomalies in locations that are difficult for the inspector to reach with the moisture meter.
The relative humidity should also be monitored throughout the area of concern to make sure that an environment conducive to mold growth is not being created by elevated indoor relative humidity. (We recommend that indoor relative humidity be kept at or lower than half of the indoor temperature, so we typically recommend around 35% relative humidity as an indoor maximum.) Finally, you may wish to have the inspector conduct a sampling survey for airborne fungi to assess whether the indoor air quality is being adversely affected by mold. There are two main categories of mold sampling:
Which sampling type you require is strongly dependent on the needs of the investigation—is the dead fungi content of old dust relevant, or are only living fungi relevant? Dead spores may be very old and not indicative of active growth, but they could still be contributory to adverse health effects for occupants. Do you need more precision in the fungal identification? Do you need faster—even same-day—results, or can you wait a week? Your industrial hygienist can help you navigate these options to optimize the bang for your sampling buck.
Pre-Mitigation Microflora Assessments
A pre-mitigation assessment assumes that mitigation is going to take place. It is likely that visible water damage and/or mold growth have already been observed. In this case, the inspector will carry out the assessment in much the same way as the ambient assessment, with all of the same elements of investigation described above, but with even further emphasis on identifying and quantifying the areas of concern to be mitigated and the potential contributory sources to be resolved. The industrial hygienist should also provide a detailed, site-specific scope of work for the mitigation contractor to follow in order to fully mitigate all of the areas of concern.
Post-Mitigation Microflora Assessments
After the mitigation work has been done, it is tempting to breathe a sigh of relief and assume the mitigation and cleaning work have been performed successfully. We recommend that the project not be considered a wrap, however, until a post-mitigation inspection and final clearance sampling survey have been conducted. Beyond providing peace of mind for the occupants, the post-mitigation assessment also reduces the risk assumed by the community association.
The same investigative elements as in the ambient and pre-mitigation inspections are employed, but with emphasis on assessing the completeness of the mitigation and cleaning activities, making sure there is no remaining visible mold growth, and confirming the absence of mitigation-related dust and debris in the work areas. An airborne fungi sampling survey should then be conducted to confirm that the indoor air quality is normal, with the total fungi concentrations in the indoor samples similar to or lower than that of an outdoor sample and expected background concentrations, and with the types of fungi identified indoors representative of normal outdoor air. Once these criteria have been met, we can be confident that the mitigation work was adequately performed.
In order to avoid a real or perceived conflict of interest, we recommend that the industrial hygienist or other inspector you hire to conduct any of the above assessments be a third party, entirely independent from the mitigation contractor. With these steps in mind, handling a mold concern need not be a confusing hassle. Instead, it can be an opportunity for a community association to shine.
By Michael J. Lowder, Esq., Benson, Kerrane, Storz & Nelson, P.C.
No one wants to find out that there may be construction defects in their home or community. Unfortunately, construction defects happen, even though local building departments inspect construction projects and most developers take steps to avoid them. Fortunately, as long as you act quickly to resolve construction issues with the developer of the community, homeowners and community associations can typically get construction defect issues resolved, even if the developer has gone bankrupt or out of business.
Tick-tock: Don’t Let the Statute of Limitations Bug Bite!
Generally, a property owner must make a claim for construction defects within two years after they first notice a symptom of a problem. That two-year clock can start even if you do not know that the symptom is a construction defect, and even if you do not know the cause of the symptom.
For a community association, a report of a problem in an email to a board member or the community manager, or discussion of an issue in meeting minutes can start that two-year clock, so it is important to pay attention to reports of any problems that could be related to construction.
An example of such a problem might be a homeowner reporting in an email to the community manager: “There’s a lot of ice in the concrete gutter of the alleyway. Can you have someone salt there?” This could be the symptom of a construction defect (inadequate slope of asphalt or concrete) and could start the two-year clock.
So, any time that you have complaints about issues in the community that might be related to construction, it is crucial to keep track of those issues so that you do not let too much time pass and lose your claims.
Working With the Developer.
When construction problems come up, property owners and community managers usually turn to the builder to resolve the issues. While this can be a good first step, there are three things to keep in mind while you work with the developer.
First, developers sometimes will ask you to sign a “release” of claims in order for the developer or builder to fix the construction issues. Developers may ask for a “full and final release” of all claims. If you sign this type of release, you are releasing the developer for all potential claims you may have against it, even issues that you do not even know exist.
For example, you may have an issue with concrete spalling, and the developer agrees to fix it if you sign a full and final release of all claims. You sign the release, the concrete gets fixed, and then a year later, you discover that the developer installed the pool heater incorrectly, or that the roofer did not properly flash the roof vents. Since you signed the full and final release in order to get the concrete replaced, you waived your claims related to the pool heater and the roof vents. Therefore, it is important to be very careful about any release the developer asks you to sign. You may want to have it reviewed by an attorney.
The second thing to keep in mind is that property owners and community managers often have the misunderstanding that working with the developer to resolve issues stops the two-year clock, and your claims will not expire. Unfortunately, under Colorado law, “working with the developer” does not stop claims from expiring. Therefore, it is essential to pay attention to any time that passes after the symptom of the defect is first noticed.
“Working with the developer” can take time, and you do not want the two-year clock to run out while you are in this process. If the two-year period expires and you do not resolve the issue, then you may not be able to pursue formal legal action against the developer anymore. If you want to work with the developer for an extended period and do not want to worry about your claims expiring while you do so, ask the developer to enter into a written tolling agreement to toll (pause) the statute of limitations or repose.
Finally, you want to make sure that whatever repairs the developer is willing to perform will actually fix the underlying problem, and not just cover up the problem or delay symptoms temporarily. It is wise to consult with a contractor or engineer before accepting any repair the developer offers.
“But It Passed Inspection?!” There isa common misconception that if a home or a community passes the inspections by the local building department, it was built correctly. Unfortunately, this is not always the case. Building inspectors simply cannot look at every condition in every location on every building, and building inspectors sometimes fail to spot construction defects and building code violations. Building inspectors perform a function similar to the police: they catch some violations, but they do not catch every violation. Just as citizens are expected to obey the law, whether or not they are caught by the police, developers and builders are expected to follow the minimum standards of the building code, regardless of whether a building official finds a building code violation.
No Money in the Bank? Another common misconception is that if a developer goes bankrupt, or is out of business, homeowners have no recourse. Fortunately, that is not always the case. Even if a developer is out of business or has declared bankruptcy, owners and community associations with construction defects may be able to recover funds to make repairs from the developer’s insurance company, based on insurance policies the developer bought during construction.
Construction defects do not need to be a headache. If you stay on top of the issues in your community and remember to be vigilant with the passage of time, you can put your community in a great position for long-term stability, even in the face of construction defects.
Michael J. Lowder is a senior associate attorney at Benson, Kerrane, Storz & Nelson, P.C. Michael represents property owners and community associations suffering from construction defects throughout Colorado and Minnesota, and also serves on CAI-RMC’s Programs & Education Committee.
By Adam T. Brown, Esq., HindmanSanchez P.C.
As the saying goes, an ounce of prevention is worth a pound of cure.
Whenever a client asks for our assistance in handling a contract dispute with one of the association’s vendor’s, one of the first discoveries we make is that the client did not request a legal review prior to entering the agreement in the first place. In many of these cases, the agreement is either poorly drafted altogether, or contains one or more provisions which would have prevented us from recommending that the Association enter the agreement without further changes.
Unfortunately, if proper legal review of a contract is not completed ahead of time, it often locks the Association into unfavorable provisions which hinder their options once a dispute arises. Whether an Association makes this decision due to the legal fees they may incur in the due diligence, or for any other reason, it can often result in major financial and legal consequences to the Association once a dispute arises with the vendor, which may have been avoided altogether if a proper legal review had been conducted.
Two of the most common problematic areas we see when reviewing contractor agreements involve provisions related to the term and termination of the agreement, as well as the attorney fees provisions.
Poorly-written or inflexible termination provisions are one of the most frequent culprits of frustration in any contract dispute. For instance, many contracts have automatic renewal provisions that automatically lock the Association into another term of years if not terminated properly. Other termination provisions may provide only a limited window of time prior to the end of the contact within which the Association must send notice of termination, or lose their chance entirely.
As an example, one of our clients had a waste services agreement in place, which provided for an initial term of five years under the agreement. For the Association to terminate the agreement, it was required to provide notice anywhere from 90-180 days prior to the end of the contract termination date, and if notice was not sent during that timeframe, the agreement was to be automatically renewed for an additional five-year term. Because our client did not give notice during the proper timeframe, the agreement was automatically renewed and prevented them from terminating the agreement for another five years
As a general rule, for most contracts we recommend that termination is permitted at any time during the term of the contract, with or without cause, upon either thirty or sixty days’ written notice. However, in some certain instances more stringent requirements will be needed. In any case, we always recommend that our clients negotiate with the vendor to modify inflexible termination provisions, and often we will not recommend signing the agreement altogether unless the termination provision is replaced completely.
In addition to poor termination provisions, another problematic area tends to be provisions regarding attorney fees. Attorney fee provisions can make or break the Association’s ability to effectively manage a contract dispute and/or litigation. In most cases, a proper attorney fees provision should include language in which the prevailing party is awarded all costs and attorney fees at judgment. However, many contracts do not provide any provisions at all related to attorney fees, which means that even if the Association does end up successfully pursuing damages against a contractor, they will also have to pay the attorney fees expended in recovering those damages. While there are certain attorney fees that may be awarded by operation of statute in some cases, we always recommend that the contract itself provide this.
The termination and attorney fees provisions are just two examples of provisions which could drastically alter an Association’s ability to have recourse against a vendor, even when the Association has otherwise upheld its end of the contract and done everything correctly.
We encourage our communities to budget the cost of legal review for any contract they may enter into in a given year. It is much more beneficial to all parties involved if disastrous results can be avoided later on by undertaking this minor due diligence at the outset of negotiations with a vendor.
Adam Brown is a transactional attorney at HindmanSanchez P.C. and specializes in representation of Homeowners Associations and Community Association law. Please visit www.hindmansanchez.com for more information.
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