a useful tip on contracts

Saw this tidbit from one of my e-newsletters. It was in response to a poll that asked "how comfortable are you with understanding and executing contracts?" This is something all board members may need to keep in mind as they pore over contracts for association work:

"Slightly over half of you are very or extremely comfortable with understanding and executing contracts. That's a great skill to have given how prevalent they are in everyday business. If you're in the minority who aren't as familiar or comfortable with contracts, that's fine too as long as you're represented by competent counsel.

In any case, it's a good skill to have because the better you understand contracts, the more effectively you can point out any "business" issues to your attorneys (who mostly read contracts for their legal implications and not necessarily the business implications).

Even if you're not the one signing the contract, knowing what's in there can help you identify and mitigate business risks and prevent your organization from entering a bad deal. Stop being intimidated. Read the contract. Get familiar with their structure and terminology. Your understanding of contracts will be an asset to your organization."

Jackie, what you are talking about is not a contract and not related to what Shelia posted.

There could be several reasons for this - the homeowner may have declared bankruptcy, Depending on whether it was chapter 7 or 13, that can complicate matters. Did the board obtain a lien against the house? Were there other liens and were any of them tax liens? Did the mortgage company do its own foreclosure?

You'd be surprised how much this can eat up the sales price of the house - and you don't know if it was sold in a short sale, do you?

Your situation wasn't exactly related to what I posted, but it does remind board members how important it is to ask questions about any aspect of association business and document it. If you're new to the board, Start with reviewing the minutes from 2017 and work your way up. You may even need to go two or three years before that to get the history.

Since this is five years old, I don't know if the association is SOL, but if so, your next question would be if the board changed its collection policy. If not, make that your project - find out what was done in the past, mistakes made and best practices, then work with the association attorney in drafting an updated policy the board can review and approve. Have fun!

All Board members are responsible to know the specs in the contracts that the Board approves. We discuss specs for what we would like in our contracts with our vendors and then pass tht information to our Property Managment rep.

Shelia, thanks for forgiving my faux paux. With PMC being under "contract" I seized a very current issue to share. As an FYI, I was BOD President(here) about 15 years ago and some very slight changes, since then, occurred in our Maintenance Maitrex and R/Rs...mainly written more clearly. I think we have 10 years to collect (hopefully) but now await PM to respond. She seems very annoyed with this simple question; 2017 wasn't on her watch, but definitely her employer. "DELINQUENT REPORT 10/31/2022, last payment $207.00 12-May, Balance over 90 $7698.36 At Attorney."