The vast majority of both one-time projects and long-term service contracts involving vendors and service providers and their community association or HOA clients go smoothly and either conclude or continue without incident. However, a small percentage of jobs do jump the tracks in one way or another, and when that happens, things can get complicated. Sometimes it’s a contractor’s inability to stay on schedule or stick to an agreed upon budget that does it; sometimes it’s the quality of work itself that’s not up to par. Whatever the cause, sometimes it’s necessary for association administrators to pull the plug on a contract—and that sometimes can be easier said than done.
Before any contracts are signed, experts agree that associations should make sure that all vendors and service providers are properly licensed and have a good record with the Better Business Bureau.. Another useful search is your Clerk of Courts office to determine whether the contracting firm or its principals appear in litigation.
There are numerous reasons why a community association manager or board might feel it necessary to break a contract with a vendor or service provider, but according to Anne Ward, senior counsel for Ehrlich, Petriello, Gudin & Plaza in Newark, New Jersey, “The most common reason is because there’s been a breach on the part of the vendor. In other words, they haven’t lived up to their part of the bargain—they’re not providing the benefit that they’re supposed to be providing, and that’s a reason to terminate the contract.”
“The most popular reason I see is that the service is not satisfactory, poor service or it’s not compliant with the agreement,” says Scott Piekarsky, a attorney and managing member of Wyckoff, New Jersey-based Piekarsky & Associates, LLC. “That’s typically the reason why one wants to switch vendors.”
“Any breach of any material terms of the agreement is a reason for a condo association or HOA to feel it necessary to break a contract,” adds Eric Frizzell, a partner with the law firm of Buckalew Frizzell & Crevina, LLP in Glen Rock, New Jersey. “That would include failure to perform services properly, failure to be on site during required periods, and failure to respond within required time frames on a service contract. For example, an elevator service contract might require the service company to respond to a report or a complaint within a time frame and failure to respond promptly can be a detriment to the building, especially in a high-rise. Other reasons could be misconduct by workers directed toward homeowners, any type of inappropriate conduct or alcohol on the premises during work hours. There could be all sorts of reasons.”