As a member of a Homeowner or Condominium Association Board of Directors, you should be familiar with contracts well enough to explain the terms to other members. Likewise, investment property owners should also have a sound understanding of contracts.  Of course, legal counsel should approve any contracts before they are accepted, but Hara Management, Inc., one of Central Florida’s most trusted Community Association and Property Management companies, stresses the importance of being able to understand them yourself.

To be legally binding, a contract must contain four specific components: an offer that has been made by one party, an acceptance by another, the intention of entering into a legally binding contract with terms to which each party agrees, and where an exchange of something of value is involved, known as consideration.

You may encounter several types of contracts, including:

• Fee for service: Normally used when a contractor provides recurring services, like landscaping or pest control.
• Lump sum contract: Used when a single payment is rendered for a one-time service, like construction or renovation.
• Unit price contract: This is employed when work is paid for by the unit, such as in restorations or other projects where the exact scope of the work is difficult to know beforehand.

Every contract should contain several other items, including clauses that describe payment terms, outline a dispute resolution process, determine who is responsible for legal fees if the contract is broken, any warranty terms, and a release of liens.  HMI works with a number of law firms that specialize in Community Association and Real Estate Law and can provide a list of attorneys and law firms that practice in these areas, upon request.

Hara Management, Inc. in Winter Park, FL offers comprehensive Community Association Management, Residential Property Management, and Commercial Property Management services throughout Greater Orlando and Central Florida.  For more information, visit them online to view their complete listing of services today, or click here to email for more information.