BEFORE SIGNING
THAT CONTRACT…
By
Eric Glazer, Esq.
Published
May 12, 2014
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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About
HOA & Condo Blog
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Eric Glazer graduated from the University of
Miami School of Law in 1992 after receiving a B.A. from
NYU. He is currently entering his 20th year as a
Florida
lawyer practicing |
community association law and is the owner of
Glazer and Associates, P.A. an eight attorney law firm in
Orlando
and Hollywood. For the past two years Eric has been the host of Condo Craze and
HOAs, a weekly one hour radio show on 850 WFTL. See: www.condocrazeandhoas.com.
He is the first attorney in the State of Florida
that designed a course that certifies condominium residents as
eligible to serve on a condominium Board of Directors and has
now certified more than 7,500 Floridians. He is certified as a
Circuit Court Mediator by The Florida Supreme Court and has
mediated dozens of disputes between associations and unit
owners. Finally, he recently argued the Cohn v. Grand
Condominium case before The Florida Supreme Court, which is
perhaps the single most important association law case decided
by the court in a decade.
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