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How Important are HOA Management Contracts?

HOA Boards of Directors should be used to dealing with contracts for any types of goods or services they use for their association. These are normal processes that are expected to occur regularly so that both parties involved understand their specific rules and duties.

That’s why having a legitimate contract between you and your HOA management company is so important too. For everything from daily duties to payment terms, you want your HOA management contract to be clear and fair.

Always Have a Contract

You might come across some management companies that offer “no contract” services that involve a signed agreement but don’t provide important terms that can really hurt a community long-term.

A real contract is important because it includes term of service for beginning, continuing, and exiting the agreement, as well as an expiration date and termination period. This ensure that if one party needs to leave the agreement, notification will be given and allow each to part ways in the correct way.

You’ll also want to consider other aspects of a contract that are important for your association. A good contract will consider:

  • how many times the property will be visited for inspections by the manager
  • how many meetings the manager will attend
  • how and when the contract is to be renewed
  • additional fees or charges

Also, understanding how each fee or service is included will help you budget and know just how much management is going to cost your community. Don’t be afraid to go over these details upfront with a company before signing anything.

Failing to make sure these items are included in a HOA management contract agreement can be very detrimental to your association, so be sure everything is covered beforehand and that a formal contract is signed. Contract are not only advised and good business practice; they are necessary to avoid surprises or large disappointments down the road.

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