Monday, December 28, 2009

Is your cable company listening to you?

The vast majority of common interest ownership communities have entered into bulk cable contracts for their residents. Many others have also entered into bundled services agreements that encompass broadband internet and digital telephone services even when their governing documents don't specifically empower them to do so.

Section 718.115 of the Condominium Act provides that a condominium's declaration may classify the cost of a master antenna television system or duly franchised cable television service obtained pursuant to a bulk contract as a common expense. If the declaration does not provide for the cost of a master antenna television system or duly franchised cable television service obtained under a bulk contract as a common expense, the board may still enter into such a contract, and the cost of the service will be a common expense but will be allocated on a per-unit basis rather than a percentage basis even if the declaration provides for a percentage basis for sharing of common expenses.

Any contract made by the board for a community antenna system or duly franchised cable television service may be canceled by a majority of the voting interests present at the next regular or special meeting of the association. Any member may make a motion to cancel the contract, but if no motion is made or if such motion fails to obtain the required majority at the next regular or special meeting, whichever is sooner, following the making of the contract, then the contract is deemed ratified for its entire term.

Not surprisingly, many associations enter into cable contracts with terms in excess of 3 years and sometimes upwards of ten years! The chance to cancel these contracts has long since come and gone for most. Associations that entered into bulk cable contracts as a way to provide a useful service at a valuable bulk rate may now be stuck as a result of increased delinquencies. My attorneys often negotiate renewals or midstream modifications of these contracts with various cable providers or we counsel associations and managers what points to ask for if they will be handling the process themselves.

The hope is always that these service providers will understand the financial crisis being experienced by so many communities today and that they will be willing to be flexible in modifying previously rigid criteria and procedures. Unfortunately, I have been hearing that not only are some cable providers not being helpful with regard to renewing cable contracts on more favorable terms but some have actually been punitive by denying retail internet and telephone services to individuals willing to pay for same in the community!

It is hard to believe that a short-sighted approach such as this will work in any company's best interests in the long term. After all, a willingness to help in rough times usually engenders increased loyalty when good times re-emerge as they undoubtedly will.

1 comment:

  1. Excellent and very accurate points. The only thing I would add to it is the following. In the very rare case that a cable company would even consider making a revision to an existing contract the board must be aware that they will most certainly require adding term to the remaining contract and/or increasing the bulk rate to compensate for the reduction in the number of non-pay units billed.

    Comments By: Ken Crawford, Director of Business Development, CSI Consulting (A Cable TV Contract Consulting Company)
    Phone:(954) 767-0185 Ext. 205
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