Service contracts

What counts as a service contract

Most of what an association pays a vendor for is a service contract: landscaping, janitorial cleaning, pool maintenance, pest control, trash valet, security patrol, and the management company agreement itself. These are recurring engagements where the vendor performs the same work on a schedule, and the property looks the same when they leave as when they arrived, just cleaner, mowed, or treated.

Construction work is different in kind, not just size. Reroofing a building, repaving the lot, replacing siding, or adding a fence changes the physical structure or improves real property. A construction contract covers that category, and it carries a different set of rules than a service agreement does.

Why the label changes what protects you

Construction work more often triggers contractor licensing requirements, and those requirements differ by state, by trade, and sometimes by locality. Verify your vendor's license status directly with your state's licensing authority before signing, and again close to the start date [S21]. It also more often carries an implied warranty of workmanlike performance, a baseline the finished work is measured against, though how much of that warranty a contractor can disclaim in writing varies sharply by state [S14].

A janitorial contract or a landscaping agreement is far less likely to trigger either concern. That does not make it exempt from good contract practice, only from these two specific bodies of rules.

The gray zone: when a service call becomes construction

Some jobs sit right on the line. Pressure washing a roof is a service; resealing it is construction. Trimming a tree is a service; removing one and grinding the stump can tip into construction, depending on what else it disturbs. Touch up paint is a service; re-siding a building is construction.

There is no fixed legal test that sorts every job into one column or the other, and where the line falls can move by state. When a vendor's proposal involves improving or altering real property, treat the agreement as construction contract territory for licensing and lien purposes, and confirm the closer calls with the association's attorney.

What every service contract still needs

Whichever category the work falls into, the baseline paperwork does not change. Collect a completed W-9 before the first payment [S1], since the association may owe backup withholding on payments to a vendor who never provided one [S2]. Keep a current certificate of insurance on file and confirm the vendor lists the association as an additional insured, not just a certificate holder, a distinction covered in Insurance requirements [S18]. Every agreement, service or construction, should also carry a written scope of work so there is no dispute later about what was actually promised.