RETALIATION AGAINST MANAGERS
Everyone in the common interest development industry recognizes the difficult nature of being a property manager. On a daily basis, managers are put under enormous amounts of pressure to address their communities’ needs. In recent years, that pressure has included a rise in board and owner push-back against their advice, online campaigns deriding their ability and ethics, and even lawsuits. While it may be impossible to avoid upsetting some people, managers should at the very least understand the tools at their disposal to combat these retaliatory acts. The first line of defense in every contractual relationship is the contract itself. Management contracts should define the relationship as specifically as possible. The provisions of the contract ideally define the roles and actions of the parties, including: (i) termination – both the timeframe for each party to terminate the contract, and the method of notice to each party; (ii) non-renewal – whether the association or the manager needs to advise the other party of an intent not to renew the contract on an annual basis, and the timeframe and method of notice to each party; (iii) what occurs upon an alleged breach – whether the parties must engage in dispute resolution (i.e. mediation or arbitration), the method of notice to each party, and a provision regarding potential attorney’s fees; (iv) limits to the parties’ liability to one another; (v) insurance provisions; and (vi) an indemnity provision.
TIPS AND STRATEGIES FOR MANAGERS TO ADDRESS PUSH BACK FROM BOARDS AND HOMEOWNERS. By Garrett Wait
Hold harmless and indemnity provisions must be in every management contract and owners who wish to sue the manager should be advised that the association will likely be responsible for costs. This means, indirectly, through the payment of assessments, the owner will be essentially paying the legal costs of the association’s defense. This can be a significant deterrent to litigious owners. Strengthening your management contract language will not solve every problem related to board and owner pushback. When an association’s board fails to follow its manager’s advice, the manager would be wise to document everything. Managers should ensure that his or her recommendation and the board’s subsequent refusal to abide by the recommendation
6 The Law Journal Spring 2021 | cacm.org
