As a volunteer board member, managing third-party partnerships is usually one of your biggest responsibilities. Hiring reliable vendors is vital to keep your condominium community in New Hampshire safe, clean and resident-friendly.
Every time you review a contract, you often have to look beyond the price tag and prioritize the protection of the building’s assets. Being aware of potential legal pitfalls can help you properly vet and select the right vendors for your upcoming projects.
1. Compliance with state rules
Under the New Hampshire Condominium Act (NH RSA 356-B), your board has strict fiduciary duties regarding common area maintenance, rule enforcement and financial management.
Additionally, you have to follow the condo’s governing documents and state law when entering contracts or handling disputes. If a vendor agreement goes beyond the board’s authority or conflicts with state law, it may not be valid.
2. Clearly defined scope of work
Vague contract terms can cause confusion and lead to disputes. To keep everyone on the same page, the agreement should clearly state the following:
- Vendor’s plans and project deliverables
- Total duration and timeline of the work
- Complete materials list
The contract should also clearly describe the scope of work so both sides know exactly what is included. Having transparent and precise language can help protect your association and make it easier to hold the vendor accountable if the work is delayed or incomplete.
3. Direct insurance verification
Even if a vendor claims to be insured, it is best not to just take their word for it. You and your board members can require the seller to provide a current Certificate of Insurance (COI) named directly to the association. The COI can help verify that the vendor carries sufficient general liability, workers’ compensation and umbrella coverage for the project’s scale.
4. Explicit hold harmless provisions
If the contract terms state that the condominium association absorbs all the liability during an accident, it is best to avoid signing it. That kind of arrangement can leave the unit owners exposed to costs and claims that should be the vendor’s responsibility. Having a strong indemnification clause can prevent the vendor from holding your board accountable for losses caused by their own negligence, employees or subcontractors.
5. Proper pathways for termination
A termination for cause provision lets the board end the contract right away if the vendor fails to meet the agreed standards. Additionally, a termination for convenience clause allows the association to cancel the contract with 30 days’ notice, even without a breach. Both stipulations can give the condominium board flexibility to stop the service if needed or switch vendors.
Crucial steps to take before signing
Taking the time to ensure a vendor contract protects your association from unnecessary liabilities can help save money for your community. A lawyer can help review the agreement terms to help safeguard the neighborhood from costly legal blind spots.