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How to cancel an HOA contract

If a contract for landscape services was signed by a previous board for a term of 2 years can it be canceled with a 30 day written notice? The contract did not state any terms of termination. We are an HOA Planned Residential Development Community. They have served out 1 of the 2 years at this time.

3 Responses

  1. Dennis Legere

    Ruth,
    Most contracts will have a termination clause but since yours does not than the general rule would be as you state 30 days after notification with cause. The notification would have to state the cause for termination.
    Dennis

  2. Ruth Simmons

    Thank you. Our management company had told us any contract could be canceled with 30 days’ notice so we had voted in that meeting to do so to open it up for new competitive bids. The letter sent did not give a reason.

    Homeowners had formerly requested in writing that the previous HOA board provide copies of all meeting minutes. They resigned and never gave that info.

    The President that resigned is also the owner of the landscape company we gave 30-day notice to.

    At this time there is no record of there being a conflict of interest that was voted on by the board to allow them to do services.

    The contract is also for a business name that states they are an LLC but their listing with the state was applied for in 2008 and was seemingly never granted. It is listed as void.

    Beyond that, the contract is signed by the President, who is also the owner of the landscape company and two other board members who we don’t know who they are. Neither are listed in our annual filings with the state, and we hadn’t had any kind of meetings since the pandemic started with the last board.

    The 30-day noticed ended in June and a demand letter requesting re-instatement and back pay came 2 months later.

    1. Dennis Legere

      Ruth,
      When an entire board resigns based on a records request for meeting minutes you know that something inappropriate was going on. There was clearly a conflict of interest for the president and it had to be declared prior to the board considering the landscape contract if it was not then that contract was null and void under Arizona law. Be happy that the past board is gone and that you now have an opportunity to elect a new board that will treat your community fairly and in compliance with the law. You have absolutely no obligation to the landscape company since their termination, and if you can prove that the conflict of interest law was violated the contract was included for the duration of its existence.
      Dennis

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