Contract
A legally binding agreement between the association and a vendor, management company, or other party that defines the terms of a service or project. Contracts should specify the scope of work, compensation, duration, termination provisions, insurance requirements, indemnification, and performance standards. The board should review contracts carefully and may wish to have legal counsel review significant agreements before execution.
Example in Context
The board negotiated a two-year landscaping contract with a 60-day termination clause, annual performance reviews, and a 3% cap on annual price increases.
Common Misunderstanding
The management company does not make decisions for the HOA — the board retains all decision-making authority. The management company executes the board's decisions and provides administrative support.
Frequently Asked Questions
How long should an HOA vendor contract be?
Contract terms typically range from one to three years depending on the service. Ongoing services like landscaping or management often have one-year terms with automatic renewal and 30 to 90 day cancellation provisions. Major projects may be single-engagement contracts. Avoid excessively long terms that lock the association in without performance accountability.