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By
Daniel Wasserstein
Is
your firm providing services to a condominium, be it to the
common elements or to individual units? If so, you need to know
that the law in most states requires such contracts be in
writing. An oral agreement will not suffice.
Additionally, does the individual signing your contract have
proper authority to enter into that agreement with your firm,
whether it be on behalf of the association or on behalf of a
unit owner?
Be aware that there are different types of authority recognized
by the law and each can potentially impact on the legal strength
and validity of a contractor’s agreement with a representative
and ability to get paid. As a contractor, you ideally want the
party signing your agreement to have actual authority, meaning
he or she has both express and implied authority to engage you.
Having “express authority” means that the individual has been
given the power to enter into all types of legally binding
contracts on behalf of the association, or a unit owner,
including the very type of the agreement that you have entered
into. Express authority is the most legally enforceable form of
authority.
On the other hand, “implied authority” is where an individual
representing an entity or someone other than him or herself
enters into a contract which is made legally binding simply by
virtue of that person’s position, even though the individual may
not have been actually authorized to enter into the particular
transaction.
This could easily occur, as there are often many manager types
on site, especially at condominiums under construction, many of
whom are only too ready and willing to sign contracts even
though they lack the express authority to do so. |
These
individuals can include property managers, general contractors
and engineers, who by virtue of the position they hold, may
believe they can bind the association or a unit owner, even
though they lack express authority to do so.
The
contractor holding one of these contracts would defend its
validity by contending that the signer had implied authority to
contract on behalf of the third party by virtue of his or her
position at the property, but if the agreement is contested,
this could be an uphill battle.
Apparent
authority can be equally difficult to prove and enforce. This
occurs when an individual has not been given any actual
authority to contract at all, but who, because of his or her
affiliation with another, “appears” to have authority. Where a
former board member tells a contractor that he has authority to
sign contracts on behalf of the association and does so in front
of a current board member who says nothing to dissuade the
contractor from believing this to be true, then a contractor
could easily believe the former member has apparent authority.
The
representation made and the inaction of the current board member
could support the contractor’s belief that he had a contract,
but as this example points out, this type of authority is
potentially problematic.
For work
within individual units, it is more difficult to argue that
anyone other than the unit owner has any degree of authority,
especially given the legal requirement in many jurisdictions
that work performed within individual units must be expressly
authorized by the individual unit owner.
In such a
scenario, a contractor can subsequently lien the property for
any unpaid work. As a contractor, if you are providing services
within an individual unit, you want to ensure that your contract
was signed by the unit owner, unless someone can show you
written documentation proving that they are indeed an agent of
the owner acting with actual authority.
Contractors would do well to be sure that those with whom they
deal are legally authorized to engage them. A few questions, a
little research of available Secretary of State records, and a
good measure of caution will go far in protecting your rights if
you take on work in a condominium. |
Read
Carefully and Good Luck!
2009
National Council of Structural Engineer Association
Winter Institute
Mistakes
to Avoid
Course
Masonry Grout testing differs greatly from traditional
concrete testing. Per ASTM C1019 
