Seven Tips to Avoid Issues with a Contract for Property Management

You’ve been there before. You meet with a vendor, they seem like a great choice, and then after a month or so, you find yourself in a dispute.

It’s a cycle that repeats over and over, but contract disputes don’t have to be a necessary evil of business. If you remember these tips, you’ll enjoy a hassle-free relationship with all of your vendors.

1. Start right.

   The most important thing you can do is start with the right vendor in the first place. If your selection turns out to be a bad fit, it doesn’t matter how clear the contract is. So be sure that you’re only considering companies that are properly licensed, bonded and insured. Check with your local Chamber of Commerce or the Better Business Bureau to find out more about the company. And if you know a property management company, ask them to make a recommendation – the best firms have a database of proven vendors.
    

2. Get it all in writing.

   Sounds obvious, right? But sometimes, after a contract is complete, additional services or requirements can be discussed informally with the assumption that things are “understood.” Make no mistake: there is no understanding beyond what’s printed in black and white on the contract. As such, it’s good to demand that you see it all in writing, no matter what stage of the process you’re in – even if you’re poised to sign, pen in hand.
    

3. Don’t be afraid to ask questions.

   There are no stupid questions. But you’ll feel plenty silly if you’ve made an assumption about your contract because you didn’t understand some of the terminology. Don’t hesitate to get clarification. Contract language can be dense and hard to understand for the layperson.
    

4. Review it with your committee or board.

   Nobody should have to go it alone. When you have a contract in hand, review it along with your fellow committee members or association board members. You never know if someone on your team has experience or insight into this area, so it’s best to open it up to a wider range of expertise.
    

5. Bring in an expert.

   Are you a contract analysis professional? Chances are, the answer is “no.” And there’s nothing wrong with that. But knowing how important a clear contract can be, and how essential it is to the wellbeing of your association, may compel you to seek the expertise of a professional. Don’t be afraid to share the contract with your attorney, your insurance professional or your accountant (or all three) before it’s time to sign. This small extra step could save you big trouble later on.
    

6. Talk to former customers.

   Let’s be real: The only truly honest way to get to know a company is to talk to some of their former clients. Build some extra time into your approval process so you can speak to some former and current customers of the vendor you’re considering. They will give you the unvarnished truth of the company – and let you know if they’re the type of company that adheres to a contract as written, or as imagined. It’s a big difference.
    

7. Know the endgame.

   As part of a board or committee, chances are you’re simultaneously juggling multiple contracts by multiple vendors. That may make it tricky to tell when certain arrangements are expiring, and what the conditions of those expirations may be. Make sure you create a master calendar of all vendor contracts so you know when to begin renegotiations. After all, if you start to collect new bids before your current contract expires, it puts you in a far stronger negotiating position. And that translates to lower costs for your association.

Contracts are more than words on a page. They define how you will interact with your vendor, and what kind of service your residents receive. For more insight on how to avoid contract disputes with your vendors, contact FirstService Residential today.