Avoiding Problems with Contractors

In our many years representing community associations, we have seen a rash of disputes between associations and contractors.  The problems fall in to a pattern, and always involve a lack of common understanding about what the association thought they were buying, and what the contractor thought they were to supply.

Our recommendations for any contract are the same, and are intended to clarify the expectations between associations and contractors.  Whenever your association is close to entering into a contract with any vendor (construction-related or otherwise), be sure you are aware of the following:

1.  Know what you want to buy.  What vendors offer is what they want to supply, not necessarily what you want to buy.  If you don’t know what you want or need, consider hiring an independent consultant to help you prepare specifications that accomplish the particular project goals you have identified.

2.  Make sure that the contract (in written form) matches what you want to buy.  It should have specifications so that everyone knows what is to be done, not just general information about the products or services the vendor offers.

3.  Make sure that the contractor/vendor has bid what you have specified.  We have had several situations where the contractor bid what they wanted to do, not what the specifications asked for.

4.  Make sure that the price is accurately stated in the contract.  Know if sales tax, permits, copies, weekend work, extra services, etc are included or extra.  If extra, how will they be priced?  Make sure the contract contains all pricing/cost information.

5.  Compare the work performed to the contract specifications.  It’s best to do this while the contract is being performed (instead of after the fact).  For difficult projects, you may need an outside expert like an Architect or Engineer to inspect the work for you.

6.  Make sure the association is protected if the work is not performed to specifications or another dispute arises.  For example, an attorneys’ fees provision allows the successful party in a contract dispute to collect reasonable attorneys’ fees incurred while enforcing the contract.  An alternative dispute resolution clause can require parties to mediate or arbitrate, which can be a much faster, cheaper alternative to litigating contract issues in court.

The key is a common understanding between the owner and the contractor about what work is to be done, and what price is to be paid. Make sure that happens before you sign the contract, not after the work is performed.

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2 Responses to Avoiding Problems with Contractors
  1. Cynthia Soike
    December 11, 2010 | 11:14 pm

    Oue condo board has not been elected properly and they delt with contracts. Once they are elected properly, must all previous legal decisions they made be revisited? How is this handled?

  2. Valerie Farris Oman
    December 13, 2010 | 5:28 pm

    Procedural problems with contracts (i.e., improperly-elected board, using wrong association name on contract) can result in a court declaring the contract invalid. The association needs to take action to address the procedural defect as soon as possible, which may include (but is not necessarily limited to) having your properly-elected board vote to ratify the contract. You should consult with an attorney experienced in community association law to walk you through how to address the problems that may arise due to your board having been improperly elected.
    Valerie Farris Oman recently posted..FHA Recertification Deadlines

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Avoiding Problems with Contractors

In our many years representing community associations, we have seen a rash of disputes between associations and contractors.  The problems fall in to a pattern, and always involve a lack of common understanding about what the association thought they were buying, and what the contractor thought they were to supply.

Our recommendations for any contract are the same, and are intended to clarify the expectations between associations and contractors.  Whenever your association is close to entering into a contract with any vendor (construction-related or otherwise), be sure you are aware of the following:

1.  Know what you want to buy.  What vendors offer is what they want to supply, not necessarily what you want to buy.  If you don’t know what you want or need, consider hiring an independent consultant to help you prepare specifications that accomplish the particular project goals you have identified.

2.  Make sure that the contract (in written form) matches what you want to buy.  It should have specifications so that everyone knows what is to be done, not just general information about the products or services the vendor offers.

3.  Make sure that the contractor/vendor has bid what you have specified.  We have had several situations where the contractor bid what they wanted to do, not what the specifications asked for.

4.  Make sure that the price is accurately stated in the contract.  Know if sales tax, permits, copies, weekend work, extra services, etc are included or extra.  If extra, how will they be priced?  Make sure the contract contains all pricing/cost information.

5.  Compare the work performed to the contract specifications.  It’s best to do this while the contract is being performed (instead of after the fact).  For difficult projects, you may need an outside expert like an Architect or Engineer to inspect the work for you.

6.  Make sure the association is protected if the work is not performed to specifications or another dispute arises.  For example, an attorneys’ fees provision allows the successful party in a contract dispute to collect reasonable attorneys’ fees incurred while enforcing the contract.  An alternative dispute resolution clause can require parties to mediate or arbitrate, which can be a much faster, cheaper alternative to litigating contract issues in court.

The key is a common understanding between the owner and the contractor about what work is to be done, and what price is to be paid. Make sure that happens before you sign the contract, not after the work is performed.

Share and Enjoy:
  • Print
  • Digg
  • StumbleUpon
  • del.icio.us
  • Facebook
  • Yahoo! Buzz
  • Twitter
  • Google Bookmarks
2 Responses to Avoiding Problems with Contractors
  1. Cynthia Soike
    December 11, 2010 | 11:14 pm

    Oue condo board has not been elected properly and they delt with contracts. Once they are elected properly, must all previous legal decisions they made be revisited? How is this handled?

  2. Valerie Farris Oman
    December 13, 2010 | 5:28 pm

    Procedural problems with contracts (i.e., improperly-elected board, using wrong association name on contract) can result in a court declaring the contract invalid. The association needs to take action to address the procedural defect as soon as possible, which may include (but is not necessarily limited to) having your properly-elected board vote to ratify the contract. You should consult with an attorney experienced in community association law to walk you through how to address the problems that may arise due to your board having been improperly elected.
    Valerie Farris Oman recently posted..FHA Recertification Deadlines

Leave a Reply

Wanting to leave an <em>phasis on your comment?

Trackback URL http://www.condolawgroup.com/2010/07/22/avoiding-problems-with-contractors/trackback/