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CalAttorney2
CalAttorney2, Lawyer
Category: Real Estate Law
Satisfied Customers: 10237
Experience:  I am a civil litigation attorney with experience representing HOAs, homeowners, businesses and others in real estate matters.
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If a construction company was paid less than fair market

Customer Question

If a construction company was paid less than fair market value for there services by the board and property management company for a condominium community, there job threatened, they complete the contract for the 3rd year in a row for less than fair market value and are terminatd and told the contract was given to another party for fair market value because they have more overhead than me is that legal.
Submitted: 11 months ago.
Category: Real Estate Law
Expert:  CalAttorney2 replied 11 months ago.

Dear Customer,

This is a matter of private contract - so the two parties are entitled to negotiate whatever terms they deem acceptable to one another.

The contractor is not entitled to any particular rate or fee (if they agree to provide services below market rate, that is their risk/loss in exchange for handling the contract).

If the HOA decides to go with another contractor for the next year, they can do so (they do not have to give any reason whatsoever).

However, if the HOA were to break a contract (so for example, if the scenario you describe had the contractor in a 5 year contract with the HOA, and the HOA decided to break the contract after year 3, the contractor is entitled to sue the HOA for breach of contract and recover money damages for the 2 years that they are owed under the contract terms).

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