Evergreen Clause Trap: How One HOA Got Double-Billed

Maya Bennett

Imagine- imagine opening the mail on a Tuesday morning and there is a letter from an attorney representing your, well, your current, highly underperforming landscaping company. And- and it says you owe them twenty-four thousand dollars. For nothing. For services not rendered.

Maya Bennett

This actually happened to Oakridge Condominiums. They are a hundred-and-twenty-unit association. They had this landscaping vendor, GreenScape Solutions, who was just, uh, honestly, they were doing a terrible job. Missed mows, weeds everywhere, clogged common-area drains. So, the board did what any sensible board would do. They went out, they got bids, and they signed a brand-new contract with a competitor, Meadowbrook Landscaping, to start on September first. But then, boom. The lawyer's letter. GreenScape claimed their contract had automatically renewed for another two years, and if Oakridge wanted out, it was going to cost them a twenty-four thousand dollar liquidated damages fee.

Maya Bennett

How does this happen? It- it- it is all in the hidden mechanics of what we call the evergreen clause. In Oakridge's case, it was Section fourteen of their contract. It didn't just say the contract renews. It required a notice of an intent not to renew no less than ninety days but no more than one hundred and twenty days prior to the August thirty-first expiration date.

Maya Bennett

Let that sink in. No less than ninety, but no more than one hundred and twenty. That is not just a deadline. That- that is a tiny, tiny thirty-day window. For Oakridge, that window was open from May third to June second. If they sent the notice on May second? Too early, invalid. If they sent it on June third? Too late, invalid. And of course, the- the board didn't even start discussing new bids until July. By then, the trap had already snapped shut.

Maya Bennett

Now, you might be thinking, "But Maya, didn't they complain? Surely the vendor knew they were unhappy." Well, yeah, the board president had sent a very heated email to their sales representative on June fifteenth, complaining about missed mows and clogged drains. But here is the thing: informal complaints do not satisfy a legal contract. Section fourteen of their agreement had a strict demand. It- it required written notice sent via certified mail to the corporate headquarters address. An email to a sales rep on June fifteenth is legally meaningless in this context. It's the illusion of notice.

Maya Bennett

And this is the ultimate volunteer board blindspot. Think about it. A three-year contract gets signed by one board in twenty-twenty-three. By the time twenty-twenty-six rolls around, you have entirely new board members. They don't have the- the institutional memory to track a specific thirty-day window from a contract signed years ago. And some agreements are even simpler but just as easily missed. They might say, "If neither party has given the other thirty (30) days written notice of the desire to terminate," the contract automatically rolls over. If you don't have these dates on a calendar, you are rolling the dice with your association's budget.

Maya Bennett

So, what do you do if you find your association caught in this exact trap? You- you don't just throw your hands up and pay the twenty-four thousand dollars, and you definitely don't just ignore it and let the new vendor start, because then you're paying for two contracts at once. You need an exit strategy.

Maya Bennett

First, you have to establish and document the facts. You need hard evidence of their failure to perform. For Oakridge, we had them compile photos of those clogged drains that actually caused parking lot flooding back on June twelfth. We got copies of unanswered maintenance emails. You- you need a paper trail that proves they weren't doing the job.

Maya Bennett

Second, confirm your authority and- and look at the contract's rules. Specifically, look for the "Opportunity to Cure" clause. In Oakridge's contract, this was Section eighteen. It said if the vendor defaults, the HOA has to give them written notice of the specific default, and then the vendor has, say, ten or fifteen days to fix it. If they don't fix it in that window, *then* the HOA can terminate for cause, regardless of the evergreen renewal.

Maya Bennett

Third, pause. Just... pause. You have to identify and protect your affected stakeholders. In this case, that meant immediately calling Meadowbrook Landscaping and saying, "Hey, we have an administrative delay on our end. We need to push back our start date." You have to prevent being liable for two active contracts at the same time, which would absolutely decimate the operating budget.

Maya Bennett

Fourth, weigh your options. You- you could declare a "material breach" and walk away, but that almost guarantees a lawsuit. Or, you can use your documentation as leverage to negotiate a mutual termination. Often, offering a underperforming vendor a paid thirty-day transition period is a lot cheaper than paying a twenty-four thousand dollar termination fee or hiring litigators.

Maya Bennett

Fifth, record the decision properly. The board needs to hold an executive session, vote to authorize association counsel to draft a formal "Notice of Default and Opportunity to Cure," and record those specific, objective action items in the minutes. No emotional venting, just business.

Maya Bennett

And finally, step six, communicate clearly but neutrally with your residents. You don't want to air the legal dirty laundry. A simple, neutral message like, "The transition to our new landscaping provider has been rescheduled due to administrative reviews," keeps the board's professional credibility intact without admitting any liability.

Maya Bennett

To prevent ever ending up in this situation again, every manager and board needs what I call a "Contract Lifeline" tracker. It is a simple spreadsheet. For every contract you sign, you must track three fields: the contract start date, the "Notice Window Start," and the permitted notice delivery method. And make it a hard, unyielding rule for your management team: when you go out to bid, you strike out any automatic renewal or right of first refusal clauses before anyone signs on the dotted line. Do that, and you'll keep your budget safe.

Maya Bennett

Alright, that is our quick take for today. I'll talk to you next time.