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WASH, RINSE, SPIN, DRY……REPEAT……………..FOREVER
By
Eric Glazer, Esq.
Published June 5, 2017
A client of mine recently asked me to review a proposed contract
with one of those companies that install laundry equipment in
your community. Now this may seem like a small task, but any
attorney, or Board member for that matter, with any experience
in this area knows that this contract can create havoc for
generations to come if you’re not careful.
What is strange about these types of contracts is that you will
notice that even though the company is giving you equipment and
you are paying a fee each month, the condo association is
actually the lessor and the laundry company is actually the
lessee. This is because the contract is drafted so that the
association is leasing the physical laundry rooms to the company
and a landlord/tenant relationship is therefore formed.
The contract leads you to believe that you have the
right to terminate the contract after the first term of whatever
amount of years were agreed to. The problem is, a subsequent
paragraph later on usually and immediately takes that right away
with additional language that says if at any time a majority of
the equipment is replaced, with or without the association’s
permission, the then current lease term shall be extended by
another amount of years automatically.
What this means is that in the final day of the contract, if the
laundry company replaces 51% of the machines, you are locked in
for another multi year term, even if you hate the relationship
and want out of the contract. And what do you think the company
will do in the final month or year?
About twenty years ago, a new client came to me after signing
one of these contracts. They were already locked in for many
years and did not want to renew. The laundry company argued
that they recently replaced more than half the machines so the
contract starts anew. We went to court. I argued to the court
that this is actually a contract in perpetuity and that
contracts in perpetuity are disfavored under the law. The
laundry company can lock the association in forever, simply by
always replacing a majority of the machines at the last minute.
The judge asked me “Did the condo have an attorney look at the
contract before they signed it?” I said “No.” She said “Well
they should have. Judgment for the laundry company.”
If that were not enough, the contract normally grants the
laundry company a right of first refusal to meet the terms of
any offer the association may get from another laundry company
should the existing contract actually ever come to an end.
Again, this is despite the fact that you may not have had a good
experience with them and want to break the relationship.
So associations be careful. If you’re not careful, with the
stroke of a pen you may have just rented your laundry rooms to a
company that will be washing your great grand-children’s
clothes.
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About
HOA & Condo Blog
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Eric Glazer graduated from
the University of Miami School of Law in 1992 after
receiving a B.A. from NYU. He has practiced community
association law for more than 2
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decades and is the owner of Glazer
and Associates, P.A. a seven attorney law firm with offices in
Fort Lauderdale and Orlando and satellite offices in Naples,
Fort Myers and Tampa.
Since 2009, Eric has been the host
of Condo Craze and HOAs, a weekly one hour radio show that airs
at noon each Sunday on 850 WFTL.
See:
www.condocrazeandhoas.com.
He is the first attorney in the
State of Florida that designed a course that certifies
condominium residents as eligible to serve on a condominium
Board of Directors and has now certified more than 10,000
Floridians all across the state. He is certified as a Circuit
Court Mediator by The Florida Supreme Court and has mediated
dozens of disputes between associations and unit owners. Eric
also devotes significant time to advancing legislation in the
best interest of Florida community association members.
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