Certain contracts entered into by condominium, cooperative and homeowners’ associations require competitive bidding.
These requirements are found in Section 718.3026 of Florida’s Condominium Act, Section 719.3026 of Florida’s Cooperative Act, and Section 720.3055 of Florida’s Homeowners’ Association Act (collectively the “Acts”).
All three Acts require an association to obtain competitive bidding for any contract for the purchase, lease, or renting of materials or equipment, or for the provision of services that requires payment in an amount that exceeds a certain percentage of the total annual budget of the association, including reserves.
For condominiums and cooperatives, the threshold is 5% (five percent) of the total annual budget of the association, including reserves. For homeowners’ associations, the threshold is 10% (ten percent) of the total annual budget of the association, including reserves.
However, condominium, cooperative and homeowners’ associations are not required to obtain competitive bidding for contracts with employees of the association and contracts for attorney, accountant, architect, community association manager, timeshare management firm, engineering, and landscape architect services do not require competitive bidding. Additionally, competitive bidding is not required for needed products and services in an emergency or if the business entity in which the association desires to enter into a contract is the only source of supply within the county serving the association.
We are often asked, if competitive bidding is required, how many bids does association have to get? The number of bids is not defined in the Acts. It is also important to note that condominiums, cooperatives, and homeowners’ associations are not required to accept the lowest bid.
Should you have any questions, you should discuss this issue with your association’s legal counsel to see if competitive bidding is required for your particular contract or if an exception applies.