Vendor agreements can affect your building’s finances and operations when something goes wrong. Before your New York City co-op or condo enters a service contract, review the key terms. Your board should know what the vendor must provide and what happens if either side wants to end the contract.
Five terms deserve particular attention:
1. Automatic renewal provisions
Check whether the contract renews automatically and when your board must give notice to cancel. Under New York’s General Obligations Law, automatic renewal terms in service, maintenance or repair contracts are unenforceable unless the provider gives the required written notice. This rule does not apply when the renewal period is one month or less.
2. Termination rights
Review when either side may end the contract, whether cancellation without cause is allowed and how much notice the agreement requires. Clear terms can help your board plan for a change in vendors without unexpected obligations.
3. Insurance requirements
Check what insurance the contract requires, how much coverage the vendor must maintain and how the vendor must provide proof of coverage. Most New York employers must carry workers’ compensation insurance for their employees, but the contract may also require general liability or other coverage.
4. Indemnification provisions
Indemnification clauses say who may be responsible if the vendor’s work leads to a claim, injury or property damage. State law makes an indemnification clause in a building repair or maintenance contract void and unenforceable if it requires one party to cover liability caused by the other party’s own negligence.
5. Scope of work
Check whether the contract clearly lists the work, materials, costs and duties involved. For elevator maintenance, security or cleaning services, a detailed scope can reduce disagreements over what the vendor was expected to provide.
Know what your board is agreeing to
Vendor contracts can create financial and operational obligations that continue throughout the relationship. Reviewing key terms carefully can help your board spot unclear responsibilities, unexpected costs or limited options for ending the agreement. If important provisions are unclear or difficult to interpret, an attorney can help explain how they may affect the building before problems arise. Addressing those issues early can make the vendor relationship easier to manage.