What Should Illinois HOA Boards Look for Before Signing a Vendor Contract?

 Posted on July 18, 2026 in Condominium & Homeowner Association Law

Illinois HOA boards should look for a few key things before signing a vendor contract in 2026. Vendor agreements often seem routine. This is especially true when a board is hiring a landscaping company or snow removal service the community has used before. But a poorly written contract can leave your association open to unexpected costs, liability, or a vendor relationship that's hard to end. Our Arlington Heights, IL HOA lawyers can review these agreements before you sign. This way, problems are caught on paper instead of after something goes wrong.

Questions To Consider Before Signing a Vendor Contract in 2026

Before you sign anything, it helps to walk through a few key questions, since the answers can reveal risks that aren't obvious from a quick read of the contract.

Does the Contract Clearly Define the Scope of Work?

A vendor contract should spell out exactly what services are included. It should also say how often the work happens and what standards it must meet. Vague language like "regular maintenance" or "as needed" creates room for disagreement later. The board and vendor might not agree on whether the work was actually done.

A good contract might say that grass gets cut weekly during a certain season. It might say that snow removal starts once a certain amount of snow falls. Without this kind of detail, your board has little to point to if the vendor's work falls short.

Does the Contract Include Proper Insurance and Indemnification Terms?

Under the Illinois Condominium Property Act, 765 ILCS 605/, associations already carry real responsibility for common areas and risk management. A vendor contract should require the vendor to carry enough liability insurance.

It should also name your association as an additional insured. Indemnification language should make clear that the vendor, not your association, is responsible for damages or injuries the vendor causes. Without these protections, your association could end up paying for an accident that had nothing to do with board decisions.

Can Your HOA Board Terminate a Vendor Contract Early if Needed?

This depends entirely on what the contract says. That's exactly why boards need to read termination clauses carefully before signing. Some vendor contracts renew each year automatically. The association may only have a narrow window, sometimes just a few weeks, to cancel. Missing that window can lock your association into another full year with a vendor the board wanted to replace.

Other contracts include long notice periods or early termination fees. These can make it costly to walk away, even if the vendor's work has been poor. Knowing these terms ahead of time gives your board real options if a vendor relationship isn't working.

Does the Contract Protect Against Unexpected Price Increases?

Some vendor contracts include automatic price increases built in. This lets costs go up each year without a new round of board approval. Other contracts leave pricing vague. This gives a vendor room to argue for a mid-contract increase based on rising costs or new services.

Try to build in a fixed price for the length of the contract. At the very least, aim for a capped and predictable increase. This helps your board budget accurately. It also helps avoid surprises that get passed along to homeowners through unexpected assessments.

What Happens if a Vendor Contract Doesn't Address These Issues?

If a contract is missing key protections, your association may have little recourse when something goes wrong. A vendor who causes property damage without enough insurance can leave your association covering the cost. A vague scope of work can make it hard to hold a vendor accountable for poor service.

A contract without clear termination rights can trap your board in a bad relationship for months or years longer than it should. Having a lawyer review vendor contracts before they're signed is one of the best ways to prevent these problems in the first place.

Who Is Actually Authorized to Sign a Vendor Contract for Your HOA?

Under Illinois law and most associations' governing documents, only board members with proper authority can bind the association to a contract. This authority usually comes from a valid vote at a board meeting. If one board member signs without that authority, it can create confusion about whether the contract is even valid. Keeping clear records of board approval for every vendor contract protects the association if a dispute over authority ever comes up.

Contact Our Cook County, IL Homeowner Association Attorneys

Vendor contracts might seem like routine paperwork. But the details in these agreements can affect your association's finances and liability for years to come. At Dickler, Kahn, Slowikowski & Zavell, Ltd., we bring over 150 years of combined legal experience to associations throughout the Arlington Heights area. Our team helps boards review contracts carefully before they sign.

Contact Dickler, Kahn, Slowikowski & Zavell, Ltd. at 847-593-5595 to talk to our Arlington Heights, IL HOA lawyers today.