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CONTRACTS LIMITED TO ONE YEAR

DRE Limitation. Virtually all CC&Rs have a one-year limitation on contracts entered into by the association. This limitation is required by the Department of Real Estate (Cal. Admin. Code, Title. 10, § 2792.21) to prevent the developer from obligating the association to long-term contracts that may favor the developer but harm the association.

Transfer from Developer. Once the developer has turned over control of the association to the membership, the CC&Rs may be amended to eliminate the restriction or to change it to 3 or 5-year contract limitations depending on the type of vendor. This allows the association to negotiate more favorable contracts for elevator maintenance, cable TV service, etc.

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Adams Stirling PLC