BettyO1 (California)
Posts: 104
Posts: 104
Posted:
Does Davis Stirling limit the term of contracts that boards can enter into? Seem to recall perhaps one year, but not sure.
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Limits on Term of Contract
Started by BettyO1 • 4 replies • 2741 views
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RichardP13 (California)
Posts: 1,767
Posts: 1,767
Posted:
Hopefully this helps you.
Contracts Limited to One Year
Virtually all CC&Rs have a one-year limitation on contracts entered into by the association. This limitation is required by the Department of Real Estate (Cal. Admin. Code, Title. 10, §2792.21) to prevent the developer from obligating the association to long-term contracts that may favor the developer but harm the association.
Once the developer has turned over control of the association to the membership, the CC&Rs may be amended to eliminate the restriction altogether or to change it to 3 or 5 year contract limitations depending on the type of vendor. This allows the association to negotiate more favorable contracts for elevator maintenance, cable TV service, etc.
Contracts Limited to One Year
Virtually all CC&Rs have a one-year limitation on contracts entered into by the association. This limitation is required by the Department of Real Estate (Cal. Admin. Code, Title. 10, §2792.21) to prevent the developer from obligating the association to long-term contracts that may favor the developer but harm the association.
Once the developer has turned over control of the association to the membership, the CC&Rs may be amended to eliminate the restriction altogether or to change it to 3 or 5 year contract limitations depending on the type of vendor. This allows the association to negotiate more favorable contracts for elevator maintenance, cable TV service, etc.
BettyO1 (California)
Posts: 104
Posts: 104
Posted:
If nothing is mentioned in the CC&R's, can it be assumed that the Department of Real Estate (Cal. Admin. Code, Title. 10, §2792.21) governs, that it limits contracts to one year?
RichardP13 (California)
Posts: 1,767
Posts: 1,767
Posted:
Betty,
In the CCRs, it should be under Powers and Duties of the Association, if not, try the Bylaws. If it's not in those two, I would conduct the Association attorney, because you may, as my previous email stated, be able to contract for a longer period of time. California only restricted the developer from entering into an long term contracts.
In the CCRs, it should be under Powers and Duties of the Association, if not, try the Bylaws. If it's not in those two, I would conduct the Association attorney, because you may, as my previous email stated, be able to contract for a longer period of time. California only restricted the developer from entering into an long term contracts.
MaryA1 (Arizona)
Posts: 388
Posts: 388
Posted:
Betty,
That law only applies to contracts entered into by the declarant. Is your HOA still under declarant control or has it recently been turned over to the members?
That law only applies to contracts entered into by the declarant. Is your HOA still under declarant control or has it recently been turned over to the members?
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