---
title: "Contracts, HOAs, and commercial accounts, Due Diligence Deep Dive"
url: https://poolroutemarketplace.com/learn/due-diligence/contracts-review
description: "Residential customers usually have month-to-month service agreements (sometimes nothing more than a verbal handshake). Commercial and HOA accounts often have mu"
lang: en
---

# Contracts, HOAs, and commercial accounts

Lesson 5 of 12 · 8 min read

Residential customers usually have month-to-month service agreements (sometimes nothing more than a verbal handshake). Commercial and HOA accounts often have multi-year contracts with assignment clauses that determine whether the contract, and its revenue, actually transfers to you.

**Have an attorney in your state review:**

\- **Every multi-year contract.** Look for:
, **Assignment clauses**, does the contract require the customer's written consent to assign to a new owner? Many do. If consent is required, getting it should be a closing condition.
, **Termination for change of control**, some contracts allow the customer to terminate if the service provider changes ownership. Discount that revenue accordingly.
, **Auto-renewal terms**, when does it next renew, and what notice is required to prevent renewal?
, **Pricing mechanics**, fixed price, CPI escalator, or open to renegotiation?
\- **The seller's non-compete with you.** State law varies dramatically, California broadly disfavors non-competes, while Florida and Texas enforce them more readily within limits. Get local counsel.
\- **Any vehicle leases or financing.** Confirm payoff amounts and lien releases at closing.
\- **IP transfer**, brand name, logo, domain, social handles, Google Business Profile, business phone number, customer review history.
\- **Employee or contractor agreements.** If the seller has a tech, are they staying, leaving, or being terminated? What about their non-compete?
\- **Insurance and bonding**, confirm what's required to operate legally in your jurisdiction and what's required by any commercial customer.
\- **Vendor contracts**, supply house terms, software subscriptions, equipment leases.

**HOA-specific issues.** HOAs often require:

\- The contract to be re-bid or re-approved by the board on change of control.
\- Specific insurance limits ($1M / $2M general liability is common; some require higher).
\- Workers' comp coverage even if you have no W-2 employees.
\- Background checks or licensing for anyone on property.

If a single HOA represents >10% of route revenue, treat it as a closing condition: written consent to assignment from the HOA board before close, or escrow that portion of the price subject to consent within 60 days.

**Commercial property accounts (apartments, condo complexes, commercial pools).** These usually have property management companies in the middle. Confirm the property manager will accept the new owner, and budget for a brief sales presentation in week one.

**Vacation rental properties (Airbnb / VRBO).** Often higher-revenue but less stable. Verify:

\- The property is in good standing (no neighborhood complaints, license issues, or lawsuits).
\- Service expectations (some require additional touch-ups between guests).
\- Communication preferences with the absentee owner.

**A few hundred dollars in legal review prevents a six-figure surprise.** This is one of the easiest places to underspend on diligence and one of the most expensive places to be wrong. We are not attorneys, every contract review needs a licensed lawyer in your state.

## Quick check

\1. Why are HOA and commercial contracts higher-risk than residential?

\2. What clause should you check first in any commercial contract?

\3. How do month-to-month residential 'contracts' usually transfer?

\4. Best protection during contract review?

\5. Hidden risk in long-term contracts?

\6. Customer agreements that lack an assignment clause can block a clean ownership transfer.

\7. Always confirm whether contracts auto-renew or require ____ signatures each year.

Earn 42 points

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← Previous lesson: https://poolroutemarketplace.com/learn/due-diligence/equipment-check
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