The Importance of Well-Drafted Contracts Continued from page 25
statute that provides for recovery of attorney’s fees or there is a provision in the contract that provides for recovery of attorney’s fees. To hold parties accountable, it is important that the contract contain a provision awarding the prevailing party its reasonable attorneys fees and costs in the event of a legal dispute. Dispute Resolution – Ideally, parties to a contract should be able to resolve a dispute through direct negotiation before initiating legal action. One way to encourage this process is to require that the parties mediate their dispute prior to initiating litigation and to explain that a party will not be entitled to attorney fees if an attempt at mediation or negotiation was not made prior to litigation.
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Timing – It is essential to include a start date and completion date in a contract, to the extent they are known. If specific dates are not known, then a time frame is important. By specifying that the work will be completed within 30 days and that monetary penalties will be incurred if it is not finished by that time, parties can ensure that projects are completed on a timely basis. Specialized Contracts – Some specialized contracts require specific disclosures. Management contracts, for example, require specific information to be disclosed pursuant to Civil Code Section 5375. This information includes what licenses are held, the dates the licenses are valid and the name of the licensee, whether or not any relevant professional certifications are held and a disclosure of any business in which the management company has any ownership interests, profit-
COMMUNITY INSIDER MAGAZINE | SPRING 2026
sharing arrangements, or other monetary incentives and whether or not the management company receives a referral fee for distributing escrow documents.
Conclusion
The above points are the minimum provisions recommended to include in association contracts. The association’s legal counsel should review all contracts to ensure adequate protections. The goal is to have a fair contract that protects the association’s interests and ensures complete, clear and certain terms.
Johanna Deleissegues, Esq. is a Senior Attorney with Adams | Stirling PLC. She can be reached at jd@adamsstirling.com.