These General Terms and Conditions form a part of the Agreement between the Association and Managing Agent for the services provided by Managing Agent. From time to time, the Managing Agent may update these General Terms and Conditions to comply with industry standards, applicable laws, or to reflect changes in services provided by Managing Agent. Updates will be communicated to Association and come into effect in accordance with Section 12 below.
Section 1. Managing Agent Compensation
Managing Agent shall charge a base monthly fee as set forth in Exhibit A of this Agreement, payable in advance on the first day of each month. Managing Agent is authorized to deduct such amounts and reimbursable costs outlined in Exhibit A from Association’s funds. Amounts due shall be considered delinquent thirty (30) days from the date of the invoice due date. Beginning on the first Renewal Date and each successive Renewal Date thereafter, the Base Monthly Management Fee may be increased by one and a half (1.5%) percent. Interest on delinquent amounts shall bear an annual interest rate of eighteen (18%) percent, or the maximum allowed under law. Additional service provided outside of the scope of the agreement shall be subject to an hourly rate as outlined in Exhibit A.
Section 2. Indemnification of Association and Managing Agent
Managing Agent agrees to indemnify Association against actual damage, loss, and expense from the criminal misconduct, gross negligence, or willful misconduct of Managing Agent or its employees during the term of this Agreement where a court has found that such liability was caused solely by Managing Agent’s criminal misconduct, gross negligence, willful misconduct, or criminal act, unless the cause of such loss was the result of Managing Agent fulfilling direction given by Association or within the scope of this Agreement.
EXCEPT AS DETAILED IN FOREGOING PARAGRAPH OF THIS SECTION, ASSOCIATION AGREES TO PROTECT, DEFEND, INDEMNIFY, AND HOLD HARMLESS MANAGING AGENT, ITS OFFICERS, DIRECTORS, SHAREHOLDERS, OWNERS, EMPLOYEES, AGENTS, CONTRACTORS, SUCCESSORS, AND ASSIGNS, FROM AND AGAINST ALL CLAIMS, DEMANDS, FINES, CAUSES OF ACTION OF EVERY KIND AND CHARACTER, LOSS, COSTS, EXPENSES AND ATTORNEY FEES, WHETHER ARISING IN TORT OR CONTRACT, WHICH RESULT IN A CLAIM INCLUDING, BUT NOT LIMITED TO, CLAIMS RELATING TO LOSS, DAMAGE TO ANY PROPERTY, OR INJURY OR DEATH TO ANY PERSON OR PERSONS, INCLUDING BUT NOT LIMITED TO LOSS, DAMAGE, INJURY OR DEATH RELATED TO SECURITY OF THE PROPERTIES OR MOLD DAMAGE, AND DAMAGES OF EVERY KIND AND CHARACTER, WITHOUT LIMIT AND WITHOUT REGARD TO THE CAUSE OR CAUSES THEREOF, OR THE NEGLIGENCE OF ANY PARTY OR PARTIES, INCLUDING THE NEGLIGENCE OF MANAGING AGENT, WHETHER SUCH NEGLIGENCE BE SOLE, JOINT, OR CONCURRENT, OR ANY OTHER CAUSES OF ACTION ARISING OUT OF OR IN CONNECTION WITH THIS MANAGEMENT AGREEMENT AND SERVICES PROVIDED BY MANAGING AGENT OR THEIR RESPECTIVE EMPLOYEES, OWNERS, DIRECTORS, CONTRACTORS, OR AGENTS UNDER THIS AGREEMENT. IT IS THE EXPRESSED INTENTION OF THE PARTIES HERETO, BOTH ASSOCIATION AND MANAGING AGENT, THAT THE INDEMNITY PROVIDED IN THIS PARAGRAPH SHALL ALSO INCLUDE INDEMNITY BY ASSOCIATION TO INDEMNIFY AND PROTECT MANAGING AGENT FROM THE CONSEQUENCES OF MANAGING AGENT’S OWN NEGLIGENCE, WHETHER THAT NEGLIGENCE IS THE SOLE CAUSE, OR A JOINT OR CONCURRING CAUSE, OF THE INJURY OR DAMAGES.
NOTWITHSTANDING THE FOREGOING, ASSOCIATION SHALL HAVE NO OBLIGATION TO INDEMNIFY MANAGING AGENT IF MANAGING AGENT’S CRIMINAL MISCONDUCT, GROSS NEGLIGENCE, OR WILLFUL MISCONDUCT HAS BEEN DETERMINED BY A COURT OF COMPETENT JURISDICTION TO BE THE SOLE AND PROXIMATE CAUSE OF THE LOSS, UNLESS THE CAUSE OF SUCH LOSS WAS THE RESULT OF MANAGING AGENT FULFILLING DIRECTION GIVEN BY ASSOCIATION OR WITHIN THE SCOPE OF THIS AGREEMENT, OR IF SUCH LOSS IS COVERED BY INSURANCE CARRIED BY ASSOCIATION.
In the event that a judgement is entered against Managing Agent arising under this Section, Association shall have the obligation to satisfy that judgement once it becomes final. A final judgment is one in which all appellate time tables have expired. All final judgments entered against Managing Agent arising under this Section shall be processed and satisfied by Association in the same manner, as are all other debts and obligations of Association. Association shall promptly approve and sign all checks drawn to satisfy such judgments rendered as a result of any claim or cause of action covered by the terms of this indemnity within the time frame established in this paragraph. In the event that Association receives insurance proceeds to offset judgments, Association agrees to pay judgments from insurance proceeds within ten (10) days of receipt of the insurance proceeds received to offset the judgments.
Section 3. Termination
Either party may terminate this Agreement for any reason upon thirty (30) days prior written notice via certified mail. The termination date shall be thirty (30) days after receipt of such notice, or a later date mutually agreed upon by the Parties. Upon termination of this Agreement, Managing Agent shall have no further obligation or liability to Association. Upon termination by Association for any reason, Managing Agent is entitled to the remainder of the then current term of this Agreement of base monthly management fees described in Section 1 as liquidated damages. Upon termination by either party, any charges for services performed by Managing Agent under this agreement, which were considered deferred or remain unpaid for any reason, are due and payable immediately upon notice of termination, and Managing Agent is expressly authorized to deduct amount due from Association funds.
Section 4. Third-Party Consultants
4.1. Outside Consultant Services. Managing Agent may make recommendations from time to time on matters related to law, insurance, or other professional services. While Managing Agent may facilitate and manage projects, Managing Agent cannot, and shall not, provide legal, reserve analysis, property appraisal, engineering, architectural, and other advice or expertise. Association is advised to seek services and advice on these matters from companies or persons operating for the purpose of providing said service. Association is responsible for, and shall pay, all related fees for such third-party consultants.
4.2. Attorney. Managing Agent is not an attorney or law firm, and any advice given relating to Association should not be construed as a legal opinion. Association should consult a qualified attorney when there is a legal question or a legal opinion is needed. The decision to consult an attorney on legal matters shall be made by Association. If a member of the Association or party who has a potential claim against the Association gives notice that they are, or will be, represented by an attorney, Managing Agent will, in most cases, immediately refer all correspondence to an attorney that will represent Association and/or Managing Agent in regard to the specific matter for which the member or party has sought, or will seek, legal representation. Association shall pay all attorneys’ fees associated with general matters and advice to Association, collection of past due assessments, enforcement of deed restrictions, defense of claims not covered by Association’s insurers, and correspondence with a homeowner or their attorney on behalf of Association. Association authorizes Managing Agent to hire an attorney for Association at its direction. Managing Agent shall not be responsible for: 1) Association’s failure, at any time, to consult an attorney, and 2) any costs, damages, settlements, or judgments, etc. that result from Association’s failure to consult an attorney, or from following the advice of an attorney. Managing Agent may, as requested or when necessary, undertake duties outside the scope of routine operations if Association becomes a party to litigation. Managing Agent is not an attorney and will not represent Association in any litigation. However, Managing Agent may be called upon to participate in or assist with such litigation. For any lawsuit requiring a response to be filed in the court, Association grants Managing Agent permission to cause such responses to be filed by an attorney at Association’s cost.
4.3 Training. Managing Agent will facilitate board member training through an affiliated training provider, “Boardline Academy,” as part of this agreement.
Section 5. Affiliations
- Association acknowledges that Managing Agent may be affiliated with third-party service providers. Managing Agent maintains these affiliations in order to ensure Association has access to relevant service products and providers, to obtain preferred pricing, and to gain efficiencies. In order to offset costs associated with vendor management, Managing Agent shall require vendors utilized by Association be approved by a Vendor Management provider in order to provide service to Association. In some circumstances, Managing Agent may limit vendor options to verified and preferred vendors.
- Affiliate Insurance Brokerage. Association acknowledges that Managing Agent is affiliated with an insurance agency and premium finance company. Managing Agent maintains this affiliation in order to ensure Association has access to relevant insurance products. Association shall utilize this affiliate insurance brokerage. Association grants Managing Agent permission and authority to bind insurance coverage and finance through its affiliate Managing Agent shall not be responsible for incomplete or inaccurate information submitted to an insurer provided that such information was not submitted in bad faith.
- Bank In order to provide timely and effective reporting, managing Agent shall establish and maintain bank accounts on behalf of the Association at one or more banks of Managing Agent’s choice. All such accounts shall be insured by the Federal Deposit Insurance Corporation. All accounts must provide that Managing Agent is an authorized signatory with authority to deposit Association funds to and pay Association obligations from such accounts in accordance with this Agreement. Managing Agent shall have no responsibility or liability for actions of individual Board members with respect to Association’s bank accounts and other financial instruments.
- ACC/ARC: Association shall use the most current version of the standardized ACC process and updates. This includes using One Touch to the maximum extent possible.
Section 6: Insurance
6.1. Insurance Coverage. Association shall carry in full force and in effect at all times the following minimum coverage:
1.) Property: equivalent to replacement cost;
2.) General Liability with Hired and Non-Owned Auto: $1,000,000 per occurrence and in the aggregate;
3.) Directors and Officers: $1,000,000 per occurrence;
4.) Crime: $50,000 per occurrence;
5.) Excess/Umbrella: $1,000,000 per occurrence; and
6.) Workers Compensation Coverage – Volunteer Endorsement.
6.2 Sufficiency of Coverage. Association acknowledges that all insurance policies carried by Association have exclusions to coverage and that claims may involve circumstances which may preclude coverage for certain matters. Association agrees that Managing Agent shall not be responsible or liable for the failure of a policy to provide coverage for any matter. Managing Agent shall have no responsibility, liability, or fault if a policy and/or limits of insurance of any Association policy prove to be inadequate or do not cover the total amount of any and all losses. Association is solely responsible for instructing Managing Agent to increase policy limits if Association believes the limits are inadequate. If a loss occurs and the insurance is not adequate to cover the loss, Association acknowledges and agrees it will be solely responsible for paying any money due to compensate any persons or entities for any injuries or damages in excess of what the insurance company pays. Managing Agent shall not be responsible for any payments for ,or because of, a claim. Any additional insurance coverage not mentioned herein must be requested by Association.
6.3 Payment of Premiums. Association shall at all times pay, and solely be responsible for, the costs of premiums and any other fees related to insurance.
6.4Waiver of Subrogation and Coverage of Managing Agent. Managing Agent shall be named as an Additional Insured on all lines of coverage and Association coverage shall be primary noncontributory coverage on all claims against Managing Agent related to Association. In the event of a claim by any party against Managing Agent or Association, unless the claim is caused by the sole gross negligence, willful misconduct, or criminal act of the Managing Agent, Association is responsible for paying any and all damages, claims, judgments, causes of action, costs, costs of defense, costs and expenses of settlement, losses and fines not covered by Association’s insurance. Association hereby waives any and all rights of subrogation against Managing Agent that it has or may have in any Association insurance policies. The waiver of subrogation shall be effective as to a person or entity even though that person or entity would otherwise have a duty of indemnification, contractual or otherwise, and did not pay the insurance premium directly or indirectly, and whether or not the person or entity has an insurable interest in the property damaged. If an insurance company tries to pursue any right of subrogation against Managing Agent, Association agrees to indemnify and hold Managing Agent harmless as per Section 2 of this Agreement. This section is enforceable during the terms of this Agreement and after the Agreement is terminated.
6.5 Separate Relationship. Managing Agent is not an insurance agent or broker and the advice of Managing Agent shall not be construed as an interpretation of insurance policies or as a representation as to the suitability or sufficiency of any coverage Association may require or carry. Association agrees to rely on the opinions of a licensed insurance agent or attorney for any such insurance-related matters.
Section 7. Transfer of Ownership
Managing Agent shall charge lot/unit owner transfer related fees (transfer/refinance/statement of account/resale certificate/disclosure package) when a transfer of ownership occurs or when an owner, title company, or owner’s agent requests such service. If Managing Agent’s transfer related fees are paid to Association, or if such fees are no longer permitted to be charged by Managing Agent directly to owner, for any reason, Association shall promptly pay such amounts directly to Managing Agent. If such fees are not paid at closing, Association shall collect such fees from the owner and pay such fees to Managing Agent.
Section 8. Association Billing Accounts Receivable
As a necessary component of bookkeeping services provided by Managing Agent, Association hereby instructs Managing Agent to, on behalf of Association, bill owners on behalf of and take all routine and ordinary steps to manage accounts receivable of Association due from owners. The policy utilized by Managing Agent is attached to the Agreement as Exhibit B. By signing the Agreement, Association accepts the policy utilized by Managing Agent and shall adopt such policy at an open-noticed board meeting upon commencement of the Agreement. Managing Agent may update the policy from time to time; the updated policy shall be adopted and filed by Association within 90 days of notice of policy updates. Examples of accounts receivable include, but are not limited to, assessments, special assessments, fines, costs, legal fees, and other amounts due to Association. Additional charges may apply, some or all of which Association may have authority to recover from owners for such actions necessary to facilitate or effectuate the payment of such accounts receivable amounts. Association is responsible for payment of such services.
In such cases where the cost is recoverable from an owner, Association hereby instructs Managing Agent, on behalf of Association, to recover such amounts from the owner for services described in this section. Association authorizes Managing Agent to carry out the steps delineated in Association policies and, in addition to other routine and ordinary steps as may be necessary from time to time, to: send statements, estoppel certificates, send notices of nonpayment, cause notices prepared by an attorney to be filed in the real property records, perform title research, settle accounts and disputes, respond to bankruptcy proceedings, administer payment plans and agree to terms on the same, refer an account to a third-party collection agent (upon Association’s approval or at the point designated in Association policies), and to charge an owner interest, fines, account administration fees, legal costs, forced maintenance costs, and other costs recoverable to the Association related to billing or governing document enforcement. These amounts are in addition to the base management fee.
Managing Agent will pay utility bills and other bills on behalf of the association, using association funds. Association is responsible for all association-related expenses and fees associated with association expenditures.
Section 9. Records and Files
Managing Agent will maintain Association records during the term of this agreement. Association shall provide Managing Agent with originals or exact copies of originals of all Association records which Managing Agent is responsible for maintaining. Association represents and warrants the records it will provide shall be true, accurate, and complete to the best of Association’s knowledge and further agrees that Managing Agent may rely on records provided as a true, accurate, and complete record. Association shall not hold Managing Agent liable for any loss of records or damage to records arising out of, or attributable to, occurrences caused through no fault of Managing Agent including, but not limited to, theft, fire, vandalism, or force majeure. Managing Agent is not responsible for acts or omissions of any third-party records storage facility/company. Managing Agent encourages the use of digital, rather than physical, storage of records.
Upon termination of this Agreement, Association shall have one hundred eighty (180) days from date of termination to inspect all records provided to Association. If Association believes that any record is missing, Association shall, during this one hundred eighty (180) day period, send written notice detailing any deficiency of records. After such time period, if no such notice is received from Association, Managing Agent may permanently purge all Association records, and Association agrees that records received are complete. After expiration of the day one hundred eighty (180) day period, Association waives any and all claims with respect to the records and files.
Section 10. Association Propriety
10.1 Illegal or Improper Activity. Association agrees to adhere to applicable federal, state, and local law, regulations, and ordinances, as well as its own governing documents. Association is solely responsible for Association’s compliance with all applicable laws. Failure or refusal by Association to comply with applicable laws, statutes, moral or ethical business standards, or its own governing documents shall be considered a breach of this Agreement by Association. Given such a breach, Managing Agent may immediately terminate this Agreement.
10.2 Hostile Work Environment. Managing agent has the responsibility to protect its employees from a hostile work environment. Association acknowledges that Managing Agent may take necessary measures to protect employees from harassment from a board member(s) or homeowner(s). Managing Agent may, at its sole discretion. limit employee interaction or communication with any homeowner or board member demonstrating abusive, threatening, or harassing conduct.
Section 11. Enforcement Provisions
Except as otherwise provided in this Agreement, Managing Agent and Association agree that, should any claim or dispute of any type or nature arise, including, but not limited to, those arising out of this Agreement, personal injury, an interpretation of any portion of this Agreement or its application to a party, such claim, dispute, or desired interpretation (the “Claim”) shall be resolved exclusively by the following procedure:
- Notice of Claim. Within thirty (30) days after a Claim arises, the party asserting the claim (the “Claimant”) shall notify the other party (the “Respondent”) in writing of the Claim (the “Notice”). The Notice shall provide: 1) a reasonably detailed statement of the Claim, including the elements of the Claim, cause, effect, and any alleged damages; and 2) the proposed resolution or relief sought by the Claimant.
- Conference. Within thirty (30) days after receipt of the Notice, the Parties shall meet personally (with or without legal counsel) and discuss the Claim, in good faith, for the purpose of resolving the Claim.
- Mediation. If the Parties do not resolve a Claim through the foregoing conference process within thirty (30) days of the Notice (or within any other period of time as may be mutually agreed upon by the Parties) (“Termination of Negotiations”), Claimant shall have thirty (30) additional days within which to submit the Claim to mediation administered by the American Arbitration Association (or such other mediator, individual, or dispute resolution service mutually agreed upon by the Parties). If Claimant fails to submit the Claim to mediation within thirty (30) days after Termination of Negotiations, Claimant will be deemed to have waived the Claim, and Respondent will be deemed the prevailing party, released and discharged from any and all liability to Claimant arising out of the Claim. The costs of the mediation, mediator, and administration of the mediation will be divided equally among the Parties.
- If the Parties do not settle the Claim within sixty (60) days after submission of the matter to the mediation process, or within any period of time as determined reasonable or appropriate by the mediator and the Parties, the mediator will issue a written and dated notice of termination of the mediation proceedings (“Termination of Mediation Notice”). At the option of the Parties, the Termination of Mediation Notice may establish, as to matters or items that have been agreed to by the Parties, any undisputed factual findings or agreed resolutions.
- If mediation is not successful, the Parties may agree to proceed to arbitration, but only by the agreement of the Parties to the dispute, and only if 1) mediation was attempted, but was unsuccessful, and 2) the Parties do not agree to arbitrate, then suit may be filed by either party.
Section 12: Modification
Managing Agent reserves the right to update and modify General Terms and Conditions at any time. Such updates may be communicated to Association by email, posting to the Managing Agent’s website, or by other reasonable means of communication. Association’s continued use of Managing Agent’s services after implementation of updates constitutes acceptance of the terms thereof. If Association notifies Managing Agent in writing within 30 days following Managing Agent’s implementation of updates that they materially adversely affect the Association, and Managing Agent does not agree to make modifications to mitigate such adverse effect, Association may terminate this Agreement upon thirty (30) days written notice and payment of all amounts due and owing at the time of termination. Upon termination by either party, any charges for services performed by Managing Agent under this agreement, which were considered deferred or remain unpaid for any reason, are due and payable immediately upon notice of termination, and Managing agent is expressly authorized to deduct amount due from Association funds.
Section 13. General Provisions
1) This Agreement, including Exhibits and any signed addenda and/or amendments, constitute(s) the entire agreement between the Parties with respect to its subject matter and constitutes and supersedes all prior agreements, representations and understandings of the parties, written or oral; 2) The Parties agree that for Associations whose principal is located in Texas, the laws of the State of Texas shall govern all questions of law or disputes arising from, or connected with, this Agreement or the performance thereunder. The jurisdiction and venue for resolving any dispute, including mediation and arbitration, is the county of the local office of Managing Agent, and each party irrevocably consents to and waives any objections to such jurisdiction and venue; The Parties agree that for Associations whose principal is located in Arizona, the laws of the State of Arizona shall govern all questions of law or disputes arising from or connected with this Agreement or the performance thereunder. The jurisdiction and venue for resolving any dispute, including mediation and arbitration, is the county of the local office of Managing Agent, and each party irrevocably consents to and waives any objections to such jurisdiction and venue; 3) The prevailing party in any dispute or claim shall be awarded its actual reasonable attorneys’ fees, costs, and out of pocket expenses incurred, including all costs/expenses associated with mediation and/or arbitration; 4) Managing Agent may transfer and/or assign this Agreement and such transfer or assignment shall not be a breach of this Agreement. Association shall not assign its rights or obligations hereunder without the prior written consent of Managing Agent; 5) The parties may exercise any remedies at such time and in such order as it may choose, and such remedies shall be cumulative. Waiver of any one act of default does not waive any other subsequent act of default; 6) If it shall be determined that any provision of this Agreement is unenforceable in any respect, such unenforceability shall not affect the other provisions of this Agreement and this Agreement shall be construed as if the unenforceable provisions had never been contained herein; 7) This Agreement shall inure to the benefit of the successors and assigns of each party; 8) Except as provided for elsewhere, this Agreement may not be amended or modified except in writing signed by the Parties, which writing makes specific reference to this Agreement. (9) Unless specifically defined elsewhere in this document, all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service or mailed by certified or registered mail.