Vetting Contracts Before You Sign What You’re Getting Into

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 Star-Ledger 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. “Automatic renewal clauses are not often ideal because they complicate the termination options for boards, and may even impose lengthy contract terms that were not intended,” says Michael T. Reilly, an associate attorney at the law firm of Norris McLaughlin & Marcus, P.A. in Bridgewater. “Besides automatic renewal clauses, other items that can be damaging are the choice of law provisions and forum selection clauses requiring how and where disputes under the contract are to be adjudicated, along with one sided attorney’s fee clauses favoring contractors.”

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 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,” says attorney Dennis Greenstein, a real estate partner at the law firm of Seyfarth Shaw LLP in New York City.

Spelling this stuff out in black and white not only protects the building community legally, but helps keep peace within, should things go awry. “Elevators not working, broken laundry equipment, boilers not functioning in cold weather or the absence of hot water will create immediate anger in any building,” says Greenstein. “Clear language in the agreement stating the response time—with remedies for the board if the vendor breaches that agreement—is critical to the board's ability to demand service, and to terminate the agreement if it's not honored.”


Related Articles

Poisoned Ground

NJ Sues Polluters at Edgewater Superfund Site, Gloucester County

Include Community Associations in the Paycheck Protection Program

CAI Prez Makes Call to Action

The Cooperator Events presents: COVID, Communications, & the Law - Practical Advice for Boards & Managers

A Virtual Town Hall Sponsored by Gallet Dreyer & Berkey, LLP



  • does the bod have to publish and circulate the following years budget 30 days prior to the bod voting on the budget so that the owners can give the bod comments on the proposed budget. or can the bod simply ignore the owner?