What is the memberships position as it pertains to; solicitation of multiple bids for outside vendors and membership input?

By November 19, 2014Articles, News, Questions & Answers

Issue: We recently had an election in our condominium resulting in a new Board of Directors, a majority of which want to change management companies and accounting firms. We believe that the membership should have a voice in this process and that the membership should review all of the bids before any decision is made. There are rumors that the Board is already leaning towards one vendor for each service and will not solicit multiple bids let alone request membership input. What is our voice on these important decisions?

R.C., Fort Myers

Answer: Changes in Board composition often result in changes in vendors for various reasons. Most condominium documents provide that all decisions of the Association are handled by the Board of Directors unless membership approval is required elsewhere in the governing documents or by Florida law. The condominium association is a Florida not-for-profit corporation, and a corporation acts through a majority of its Directors unless otherwise required.

It is important to clarify that condominium associations are not required to obtain bids for every contract. The Board is not even required to obtain bids for its largest contract in some circumstances. Florida Statutes section 718.3026(1) requires a condominium association to obtain competitive bids for any contract exceeding five percent of its total annual budget, including the reserve budget. Subsection (2) of that statute then provides that contracts for specific services are not subject to the statutory bidding requirements. Both accounting services and community association management contracts are included in this list of exempt services. Thus, although it may be deemed prudent business to seek and obtain bids on these important services, there is no statutory requirement to obtain bids for either accounting or property management. It is of course possible that your governing documents may require the Board to obtain bids, but your question does not state as such.