When do Condominium Associations need to get competitive bids?

The Snow Birds are returning North so now begins the time, when less residents are around, for many Condominium and Homeowners’ Associations to perform needed building repairs and/or do that exciting lobby, social room or clubhouse renovation.

When hiring contractors to perform the repairs or renovations, we are often asked whether the Association needs to obtain competitive bids or not. With today’s supply chain issues and contractor back-ups getting competitive bids sometimes is not as easy as it used to be.

First we should look at where hiring professionals “do not” require competitive bids. First, pursuant to Section 718.3026, Florida Statutes, small Condominium Associations with 10 or fewer units may opt out of having to get competitive bids if two-thirds of the unit owners vote to do so.  Second contracts with employees of the association, and contracts for the following professionals: attorneys, accountants, architects, community association managers, timeshare management firms, engineers and landscape architect services, do not require competitive bids.  Also, if products or services are needed because of an emergency, or if the business entity with which the Association wishes to engage is the only source of supply within the county service the Association, competitive bids are not needed.

In a Condominium, if a contract for the purchase, lease, or renting of materials or equipment, or for the provision of services, require payment by the association on behalf of any condominium operated by the association in the aggregate that exceeds 5 percent of the total annual budget of the Association, including reserves, the Association must obtain competitive bids for materials, equipment or services.

There is no requirement to accept the lowest bid and you only need to get at least two (2) bids; not three (3) as many believe.

In addition to the bidding issues, it is also important to know that any contract that is not to be fully performed within 1 year for the purchase, lease, or renting of materials or equipment and all contracts to provide services shall be “in writing”. Also, pursuant to Section 718.3025, Florida Statutes, a contract to provide maintenance or management services shall not be valid unless it: “(a) Specifies the services, obligations, and responsibilities of the party contracting to provide maintenance or management services to the unit owners. (b) Specifies those costs incurred in the performance of those services, obligations, or responsibilities which are to be reimbursed by the association to the party contracting to provide maintenance or management services. (c) Provides an indication of how often each service, obligation, or responsibility is to be performed, whether stated for each service, obligation, or responsibility or in categories thereof. (d) Specifies a minimum number of personnel to be employed by the party contracting to provide maintenance or management services for the purpose of providing service to the association. (e) Disclose any financial or ownership interest which the developer, f the developer is in control of the association, holds with regard to the party contracting to provide maintenance or management services. (f) Discloses any financial or ownership interest a board member or any party providing maintenance or management services to the association holds with the contracting party.”