Condo Media - November 2022 - 30

Management Contracts
WHILE SOME OF THE ISSUES
discussed below are
novel, certain others are
considerations that have
been at the forefront of
management contracts
for an extended period.
Regardless of whether
the issues are new or
old, they should all
be considered when
negotiating and executing
a management agreement.
MEETINGS
THERE CAN BE AN EXPECTATION
that a manager should be available
for an unlimited number of meetings.
Most, if not all, managers would recognize
the inherent impossibility of being
in a position to satisfy that expectation.
Best practices would counsel the
parties to be specifi c with regard to
the number of board and unit owner
meetings the manager is expected to
attend and address the consequences
in a circumstance in which a manager
is required to attend more than the
agreed-upon number. Thought should
also be given to specifying the duration
of any such meetings as part of the base
contract. Given developments that
were necessitated by COVID-19, best
practices also include addressing the
question of remote versus in-person
meetings. Remote meetings are obviously
a trend that has taken shape over
the last couple years, but some boards
are not receptive to meetings being
conducted remotely. Including precise
language about the method of the
meeting is important when negotiating
the agreement.
28 CONDOMEDIA November 2022
COMMUNICATIONS
PROPERTY MANAGERS work 24 hours a day, seven days a week,
particularly since COVID-19. While being a manager always meant that
one needed to attend to after-hour emergencies, the ease with which communications
can be sent may set unreasonable expectations for responses
to routine issues and matters. To the extent possible, the contract should
establish communication standards upfront, for both the board and unit
owners. While a manager (or their company) will always need to be reachable
for legitimate emergencies, identifying anticipated response times at
the outset will ensure that the parties are on the same page as to how they
will communicate during the contract period.
SCOPE CREEP
THERE IS A NATURAL TENDENCY, often supported by reasonable expectations
and common sense, to expand the scope of a manager's engagement
to related or connected undertakings that may or may not be within the scope
of the standard monthly services for which an association has contracted.
Every association is different, and the scope of the engagement in each
circumstance must be tailored. The most important thing to keep in mind is
that there should be as much clarity as possible with regard to the obligations
imposed upon the manager as part of the base contract monthly services.
Best practices in this regard are easy to identify in theory but sometimes
diffi cult in application. The contract should be as specifi c as is reasonably
possible with regard to the services that are included as part of the monthly
base contract charge and, to the extent they can be reasonably predicted in
the circumstances, clear with regard to those services that are not included
in the base contract, such as capital improvement projects or litigation.
With respect to the latter, the contract should identify the fees for à la carte
services, such as processing insurance claims and for project management.
CHANGED CIRCUMSTANCES
IT IS POSSIBLE that the legal and regulatory landscape may change, or other
developments may occur, after a contract is executed. For instance, the imposition
of regulatory burdens that were not contemplated when the contract was
executed may undermine even the most diligent efforts to avoid scope creep.
As an example, the City of Boston recently updated its building emissions
reduction and disclosure ordinance, setting requirements for large buildings
to reduce their energy use. The imposition of that regulation, or any similar
regulation, which imposes new or additional obligations upon the board and,
by extension, its manager, may create uncertainty with regard to the manager's
responsibility and/or whether services related to compliance therewith should
be part of the base monthly contract. Best practices with regard to such issues
would ensure that the contract addresses unanticipated changes to statutory
or regulatory requirements, industry practice, and standards by detailing if
they are to be within the scope of the manager's duties and, if so, whether they
are included within the monthly base contract amount.
Condo Media - November 2022

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