Vendor and Contract Management Flashcards

A property manager discovers that a maintenance vendor has been subcontracting work to an unlicensed third party without authorization. What should the manager do?

Answer: Notify the vendor in writing that the unauthorized subcontracting violates the contract and demand corrective action

Unauthorized subcontracting is a contract breach; documenting it in writing and requiring correction protects the property legally and ensures proper oversight.

What is the purpose of an 'assignment clause' in a vendor services contract?

Answer: To control whether the vendor can transfer the contract to another company without the property's consent

An assignment clause prevents the vendor from transferring its contractual obligations to another party without the property owner's approval, protecting service continuity.

Which of the following is a best practice when managing multiple vendor contracts at an apartment community?

Answer: Maintain a contract tracking spreadsheet or system that records key dates, insurance expiration, and renewal deadlines

A centralized contract tracking system ensures the property never misses renewal deadlines, insurance lapses, or other critical contract milestones.

A 'force majeure' clause in a vendor contract is designed to address which situation?

Answer: Excusing a party's non-performance due to extraordinary events beyond their control such as natural disasters

Force majeure clauses excuse non-performance caused by unforeseeable extraordinary events—such as hurricanes or pandemics—that are outside either party's control.

What is the primary risk of relying solely on verbal agreements with property vendors rather than written contracts?

Answer: Verbal agreements are difficult to enforce and leave the property exposed if a dispute arises

Verbal agreements are nearly impossible to enforce reliably because there is no documentation of what was agreed, making disputes very difficult to resolve.

When a property manager negotiates a volume discount with a cleaning vendor in exchange for a multi-year exclusive contract, what risk should the manager consider?

Answer: The risk of being locked into a long-term relationship if service quality declines, limiting the ability to switch vendors

Multi-year exclusive agreements sacrifice flexibility; if service quality drops, the property may have limited options for switching vendors without incurring penalties.

According to best practices for CAM-certified managers, how often should vendor performance be formally reviewed?

Answer: At least annually, with documentation of performance against contracted standards

Annual formal performance reviews ensure ongoing accountability, provide documentation for contract decisions, and maintain service quality standards.