Fall Clean-ups... Contract Question?

Discussion in 'Landscape Maintenance' started by big acres, Nov 16, 2007.

  1. big acres

    big acres LawnSite Member
    Messages: 182

    Opinions needed here! We have had a town-home association for many years. Over those years, they have left and returned to us twice for our great service. This year, they had not given us a renewal well into October and then on the 25th -they dropped the bomb! They were not able to give us specific reasons and said it was not a price issue. I told the Property Manager that this was a lack of professional courtesy because they hadn't brought up any issues over the summer for me to correct, and now we are undersold on the equipment for snow removal, with little chance of finding accounts that already aren't locked in with someone for snow. So, I reminded them of the "30-day cancellation" and they agreed to retain our monthy service through November to honor it.

    Here is the question.. All of our longtime and renewing customers receive additional fall clean-up work well into November, weather permitting and as a perk (it does make our spring clean-up easier). Last year, this association had their FINAL clean-up performed on 10/26. This year it was on 10/24, with 21.25 labor hours and 22 Cu Yd waste HAULED. They got a great clean-up. On November 11, I get a call from the mgmt co wondering when we are going to do the fall clean-up!!!??? I informed them that we have completed our contract to which their reply was "we are still contracted with you through November due to the thirty day clause". My reply was that our contract states that our fall clean-up will be completed by 10/31. They are threatening to withhold payment and I told them they will be in collections. OK, finally the question; would you give this HOA a free $1200 clean-up given the circumstances?
  2. Dave_005

    Dave_005 LawnSite Senior Member
    Messages: 359

    if they retained your services through the end on Nov, then you should fullfull your service through the end of Nov, last year i finished leaf clean ups by the end of Oct, but this year due to good weather and leafs lasting long am doing leaf cleanups through the end of Nov
  3. big acres

    big acres LawnSite Member
    Messages: 182

    I appreciate the comment, my position is that:

    A. They were unprofessional regarding the way they pulled out with no notice and for no specific reason.
    B. They are only being serviced through November because we require and enforced a "30-day notice".
    C. We had a late fall up here last year too, and 10/26 was just fine last year; but 10/24 is not this year?
    D. Our contract does state 10/31 as the fall clean-up deadline. A contract exists for situations like this.

    I attended the GIE expo in Louisville last month, a speaker said the average net profit in our industry is 4%!! Now, we do a bit better than that but let's say my profit was 10% for easy math and this account was $15k per year. If I give them a free $1250 clean-up, then I have to perform an additional $15k of work next year to re-coop this one little freebie.

    I appreciate your committment to your customer, and if they hadn't already left and come back twice, I would agree that the freebie might bring 'em back, but the bridge has been burned. Any more opinions out there are again appreciated!
  4. Roger

    Roger LawnSite Fanatic
    Messages: 5,943

    On A. What is a "professional" way to terminate a contract? You say "no notice," but I thought your 30 day notification was in effect. As to the "why," the customer owes you no explanation. I'm sure such information would be of interest to you, but unless the termination is contingent on "stated reasons," they owe you nothing.

    On B, If you had a contract in force, and the termination date (considering the 30 day terms), then end of November seems like the right time for you to cease service.

    On C, Why is any "last date" part of the agreement? It seems like the LCO is being asked to do what is necessary to provide lawn care services under the contract. A date should have no bearing on the requirement to service the customer, rather what work needs to be done to do the tasks. The date of "last work" for last season has nothing to do with what is needed for this season.

    On D, Why such a date, as asked above? Why would either party agree to a date? It makes no sense to me.

    I will have to agree with the customer on this one. They have a valid contract in hand, and expect services to be done under that contract. If I was in their position, I would give no consideration to what was done last season.

    Think of other ongoing threads currently on LS regarding leaf drop this season. Many LCOs are finding the timing of this year's leaf drop is much different than other seasons. Conditions outside control of either the LCO, or the customer, (e.g. weather) dictate the work schedule for completeness, not an arbitrarily chosen date in a contract.
  5. big acres

    big acres LawnSite Member
    Messages: 182

    This is great being able to bounce this off of you guys, whether I like the responses or not. So, I will take this further and answer Roger’s points, AND ask more questions.

    A. Most businesses/HOAs will not sign an agreement that requires cause to cancel. We also reserve the right to cancel our customer without cause, with proper notice. The customer owes us nothing in the way of an explanation, and I respect their right to explore other vendors for any reason –though you would hope that they would be courteous enough to offer one having had a multi-year relationship. As for being “professional”, they fully intended to “walk away” from the contract. I had to firmly remind them of the 30 day cancellation clause to get them to honor it.
    B. The contract is en-force due to the 30-day extension. The customer will receive snow removal services per specs and at the same high level as previous years, through November 30.
    C. I have read the threads on leaf drop, and we are a few degrees north of you in PA. leaf drop is a little late, but not as drastic as some of you guys describe in your area. Last year’s date of service, and previous years, taken within the context of the contract, illustrate that they have received the same level of service as in the past, which has historically satisfied them. This point is important to the Property Manager who surely realizes they will lose if this goes to collections, as it will appear as it truly is –they are simply trying to get some free service before parting ways.
    D. Why such a date? Some leaves will drop well into December. At some point you’ve got to have a cut-off –and get the rest in the spring. In Minnesota, November 01 has been the renewal date for most Home Owners Associations. This date marks the official transition from fall to winter as far as contracts go. We do have some that turnover on April 01, which makes more sense to me as it leaves fewer potentially unresolved issues between an old vendor and the property –which you will inherit. It also gives you a whole summer to make money on the property before buying equipment to handle snow. You do not have to “guess” on whether the account will renew, since you have them through the winter.

    All that aside, I have a file drawer full of competitor’s contracts with similar cut-off dates and even often fine print stating “post-season” clean-ups will be performed at hourly rates. Anyone from here remembers the Halloween Blizzard of 1991. Many accounts changed hands that day when LCOs did not have their clean-ups done and equipment changed over. As the sales guy for my company, I see the first snow fall as a huge opportunity. Every year there is someone who still had a couple of rigs with vacs on when they should have had plows hung. When I see a site that should have been plowed already, I get the managers name from a resident and introduce myself as a great back-up if their current vendor fails again –they just lost the account.

    The contract in the customers’ hand clearly states 10/31 as the cut-off for fall clean-ups. The board and their manager have signed it for several years in a row, and I assume they have read it. This has been reviewed by several attorneys over the years, including those retained by our clients. In fact, our new contract has a 60-day cancellation with an auto-renewal feature. OK, I probably sound like some jerk who throws contracts in peoples faces –not so. We are a well respected company with over a dozen trucks, half-dozen skid-steers, and not a one older than ’02. We go above and beyond with our service, and 99.9% of potential issues are avoided with great service. This situation is extremely rare for us, but we have protected ourselves with a good contract for this reason. We have fulfilled our contractual obligations, like it or not.

    It seems to be a growing trend to hang your lawn/snow vendor out to dry like this. Two years ago, we had a similar situation. That time, it was 25 acre/200+ unit town home complex. The residents had told our crews for two seasons that we were the best service this fifteen year-old property had seen, yet in late September the board decided to save a buck and go with someone else. The board instructed their Property manager to inform us immediately, only he waited until late October to drop the bomb. Like anyone reputable company up here, if we lost the contract we would give them their one good clean-up and not in early October out of spite. Any extra clean-up is a perk for renewing or long-time customers and it also makes our spring clean-up easier. How many equipment hours do you think we reserved for the snow removal on this site? Then the guy dodged payment and I went over his head, burning my bridge with him but I gained the respect of his boss, as the check arrived days later. Let’s face it, there are some “management types” who just don’t respect the green industry and aren’t afraid to try and manipulate the “lawn mower guy”. We are often last in line to get paid already.

    Maybe my post is turning into a rant? It feels good though, so I’ll continue. Consider another similar situation, which actually happened this year: A commercial account who only signs separate lawn and snow contracts had used us with great satisfaction and for the first time this summer. We were invited to bid on the winter. We were underbid and invited to return for the spring work. They called last week about some late dropping leaves. We did a second clean-up to provide great service. What is the problem? We were technically out of contract and open to liability for being on the property –even upon request. It may sound like I’m splitting hairs here, but as we grow we run into more litigation potential –even having a salting lawsuit recently, which we were released from due to our stellar CONTRACT.

    My last question to all of you who may have read this far will tell me if you are a business man, or just a “lawn mower guy”. Here it is:

    You have given your best service and legally fulfilled your obligations with a client who you know will never return, and one who has been shockingly disrespectful and disloyal to you as their LCO. In an industry with an average net profit of 4%, would you give this account a $1250 freebie, which is roughly 8% of the total contract –knowing that you will have to find, sell, and perform $15k in work to recapture your $1250 freebie?!

    Justify it with logic.
  6. Dave_005

    Dave_005 LawnSite Senior Member
    Messages: 359

    the contract is still in effect because you enforced the 30 day notice, but that aside i would fullfull the leaf cleanup through the end of Nov, but no i would not it free of charge. the 30 notice Requires you to perform your service thruogh the end of Nov, but the customer is still required to Pay for the services rendered, so no i would not do if for free. my own contracts like you run through the end of Oct and then continue on a week by week basis after that depending on weather and when the leafs drop. and i charge per visit during Nov. my customers know this and have no problems with it because as stated before you cannot control the weather and when the leafs will be down. inform your client payment for the additional work will be required upon arrival, if they refuse then don;t do the work since as you say they won;t be renewing with you next year anyway.
  7. big acres

    big acres LawnSite Member
    Messages: 182

    Thanks Dave. They were offered the ability to pay for additonal clean-up and refused, saying it should be free. I try not to dwell on this type of customer, but obviously I have in this case.

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