What Florida community associations require from contractors

Common Elements has 83,000+ Florida community associations on record, more than any other state in its directory. Each one is a not-for-profit corporation run by a volunteer board, usually with a licensed community association manager handling the day-to-day. When a board hires your business, it is spending other owners’ money under a fiduciary duty, and the statutes below are how the Legislature tells it to do that.

Both chapters require that every contract for services, and any contract to buy, lease or rent materials or equipment that will not be fully performed within a year, be in writing (§ 718.3026, § 720.3055). For a business, a handshake agreement with a manager is not a contract with the association. Expect a written scope, a price and a board approval before work starts.

The trigger is a share of the association’s total annual budget, including reserves:

• Condominiums: more than 5 percent of the annual budget (§ 718.3026).
• Homeowners’ associations: more than 10 percent of the annual budget (§ 720.3055). An HOA may follow its own declaration or bylaws instead if that procedure is at least as strict.

Neither statute requires the board to take the lowest bid. It requires the board to compare. Many associations also set a lower internal threshold or ask for three bids on smaller jobs, so read the request rather than assuming the statute is the ceiling.

The budget is public to the association’s owners and is usually in the official records, so a manager can tell you whether a job will go to bid before you price it.

• Contracts with the association’s own employees.
• Attorney, accountant, architect, community association manager, engineering and landscape architect services (condominium law also lists timeshare management firms).
• Emergencies: neither statute limits an association’s ability to get needed products and services in an emergency.
• A sole source: the rule does not apply when your business is the only source of supply within the county serving the association.
• Small condominiums: an association with 10 or fewer units may opt out by a two-thirds vote of the unit owners.
• HOA renewals: a contract that was competitively bid can be renewed without a new bid if it lets the board cancel on 30 days’ notice, and a competitively bid manager contract may run up to 3 years.

If a director, an officer or a relative of one owns or has an interest in your business, the board can still hire you, but only in the open. The conflict has to be disclosed, the contract goes on the meeting agenda, two-thirds of the other directors must approve it, and the members are told at their next meeting, where they can vote to cancel it (§ 718.3027 for condominiums, § 720.3033 for HOAs). An undisclosed contract of this kind can be voided.

Officers, directors and managers may not solicit or accept a kickback: anything of value, for themselves or their family, from a company providing or proposing to provide goods or services to the association. Knowingly doing so is a third-degree felony and grounds for removal (§ 718.111, § 720.3033). Both chapters allow items received at trade fairs or education programs, and Chapter 720 allows food under $25 per person at a business meeting. Gift cards, trips and “referral fees” to a manager or director are how vendors lose an association and expose the people who hired them.

Florida licenses construction trades through the Department of Business and Professional Regulation (DBPR). Managers and boards look your licence up on MyFloridaLicense.com before they award work, and an expired or wrong-class licence is the fastest way out of a bid. These are the Florida licence classes the Common Elements RFP builder checks for each trade:

Trades without a state construction licence, such as landscaping, cleaning or pressure washing, are still asked for a local business tax receipt and proof of insurance. Community association management firms are licensed separately under Chapter 468.

No statute sets a vendor’s insurance minimums; the association’s policy and its insurer do. The request you will see most often, and the default in the Common Elements RFP builder, is general liability of $1,000,000 per occurrence and $2,000,000 aggregate, statutory workers’ compensation, and $1,000,000 commercial auto. Roofing requests commonly add an umbrella policy, and professional services ask for professional liability instead.

• A certificate of insurance naming the association as additional insured, sent before work starts and again at every renewal.
• A W-9.
• Your licence, or a local business tax receipt for unlicensed trades.
• Proof of workers’ compensation coverage, or a state exemption certificate.
• Three references, ideally from other associations. Roofing requests often ask for manufacturer authorization and a sample warranty.

For how to keep that file current and stay on a management company’s list, see how to get on an approved vendor list.

When does a Florida condominium association have to get competitive bids?

Under section 718.3026, when a contract for materials, equipment or services requires payment that exceeds 5 percent of the association's total annual budget, including reserves. The association does not have to accept the lowest bid.

When does a Florida HOA have to get competitive bids?

Under section 720.3055, when a contract requires payment that exceeds 10 percent of the association's total annual budget, including reserves. An HOA whose declaration or bylaws set a bidding procedure at least as strict may follow that procedure instead.

Which contracts are exempt from the bid requirement?

Both chapters exempt contracts with the association's employees and contracts for attorney, accountant, architect, community association manager, engineering and landscape architect services. Neither requirement limits buying in an emergency, and neither applies when the business is the only source of supply in the county. A condominium with 10 or fewer units may opt out by a two-thirds vote of the unit owners.

Can a board member's company bid on association work?

Only with disclosure. Section 718.3027 for condominiums and section 720.3033 for HOAs require the conflict to be disclosed, the contract to be approved by two-thirds of the other directors, and the members to be told at their next meeting, where they can vote to cancel it.

Can a contractor give a gift to a board member or manager?

Officers, directors and managers may not solicit or accept a kickback, meaning anything of value from a company providing or proposing to provide goods or services to the association. Knowingly doing so is a third-degree felony under section 718.111 for condominiums and section 720.3033 for HOAs. Items received at trade fairs or education programs are allowed.