Stephen R. Bupp, CMCA, AMS, PCAM
Chapter 1--Types of Contracts
To protect property values, association boards and managers must maintain certain elements of the community. Association legal documents usually identify these elements and who is responsible for them. For the purposes of this report, the association is responsible for the common elements and has decided to obtain a contract for a specific service. These responsibilities may differ between associations.
By contracting for needed services and repairs, the association transfers responsibility for specific tasks to the contractor. The association's only concern is ensuring that all terms of the agreement are met and payment is made.
What Type of Contract Should You Choose?
Three basic types of contracts are discussed in this report:
- Service
- Specific repair
- Preventive maintenance
An association also may need to use a contract for new construction or extensive renovation. However, these contracts require technical and professional assistance. Before drafting such a contract, consult an architect, lawyer, engineer, or consulting firm.
Service Contract
A typical service contract covers landscape maintenance, pool maintenance, grounds/parking area maintenance, janitorial service, trash removal, pest control, patrol service, and snow removal.
The service contract should specify what level of service the company will perform; when, where, and how often the company will provide the service; who will provide labor and materials; how much the services cost; and how the association will pay for the services.
A landscaping contract, for example, might require weekly mowing, monthly edging, and quarterly fertilizing of all grounds. It may require the landscape company to provide all materials, labor, and supervision. The contract also may require the association to pay the company on a monthly basis or to pay for each completed service item.
Specific Repairs Contract
Onetime and infrequent repairs are included in this type of contract:
- Exterior painting
- Complete treatment for termites and pests
- Re-roofing
- Extensive repairs to pool equipment
- Repairs to paving and concrete
- Renovations to landscaping through addition of new trees and shrubs
- Replacement or extensive repairs to boilers or hot water heaters
- Major building repairs
Preventive Maintenance Contract
An association will get more mileage from its mechanical equipment by maintaining it on a routine basis. Preventive maintenance contracts might cover:
- Electrical distribution system
- Pool equipment
- Air conditioning equipment
- Boilers and hot water heaters
- Grounds care maintenance equipment
- Fire extinguishers
Failure to maintain the electrical transformer in an older condominium complex, for example, could result in the loss of electrical power and result in costly repairs. Proper care and maintenance by a qualified electrical service contractor, who routinely checks the load, connections, and wire condition, could save the association thousands of dollars in emergency repairs.
A central hot water heater system may require cleaning every three months. Failure to clean the system could cause serious damage to the equipment and possibly void the equipment warranty. Regularly-scheduled preventive maintenance can extend the equipment's life by several years.