What is an evergreen clause and should we accept one?
It is not predatory on its own. The problem is that association Boards rotate, and the person who knew about the notice window is often off the Board by the time it matters.
You can ask for it to be struck, or converted to a renewal that requires affirmative Board approval. Boards ask for this more often than they get told no.
If it stays in, add a reminder obligation: the company must give the Board written notice thirty days before the notice window opens. That single clause converts an evergreen from a trap into an ordinary renewal, and firms rarely refuse it because it costs them nothing but a calendar entry.
Then keep your own reminder anyway. The clause protects you against forgetting; it does not protect you against a company that forgets too.
General information for Board members, not legal advice. State law and your governing documents control, and both vary.
More on the agreement
- How long should our management agreement run?
- Should the fee schedule be attached to the agreement?
- What is an indemnification clause and should we accept a one-way one?
- Can our management agreement be transferred if the company is sold?
- Should our management agreement name our specific manager?
- What is the difference between terminating for cause and without cause?
The RFP template, scope checklist, interview scorecard, notice calendar and transition checklist your Board would otherwise build from scratch. No email address, no signup, nothing sent to you afterwards.