In Florida, a board director who knowingly accepts a free fishing trip from the paving company bidding on the community's roads can be charged with a felony. The statute calls anything of value a vendor gives for nothing a kickback, makes knowingly accepting one a third-degree felony, and tells the board to remove a director it finds in violation. The exceptions are narrow: food eaten at a business meeting worth less than $25 a person, and things received at trade fairs or education programs.
Most boards' trouble is quieter. Three bids come back for the same job, and they cannot be compared: one includes hauling the debris away, one prices the work twice a year instead of once, and one is a single number written on the back of a business card. So the board picks the cheapest, or the one the president already knows, and finds out in month four what the price left out.
This guide fixes that, from the decision to bid to the signed contract. It is general information, not legal advice. Your governing documents and your state's statute come first, and your association's attorney is the one to confirm how they apply. Florida law is used as the worked example because its statute spells the rules out; check what your own state says.
The short answer
- To bid out an HOA contract, write one scope first, then send that same scope to three or more vendors with one form and one due date, so every bid prices the same job.
- Check what a bid cannot tell you before you vote: the license, the insurance endorsement (a certificate alone confers no rights), and two references from communities like yours.
- The lowest bid is not required. Score the bids, record the reasons in the minutes, and sign a written contract you can cancel.
Before you start: What to pull
An hour with these papers, before you call a single vendor, saves a season of arguing with a contractor.
- This year's total annual budget, including reserves (you need the number in Step 1)
- The current contract for this work, if one exists, open to its term, renewal and cancellation clauses
- The bylaws and declaration, searched for "bid", "contract" and "conflict"
- The reserve study line for this component, if it is a reserve item
- The last two years of complaints, work orders or photos about this job
- The association's insurance requirements for vendors, if your insurer or documents set any
If the current contract cannot be found, finding it is the first job: its cancellation clause decides when a new vendor can start.
One bid, from the decision to the signed contract.
- Decide: Must this be bid?
- Scope: One page every bidder prices
- Bidders: Three or more, relationships disclosed
- Form: One form, one due date
- Check: License, insurance, references
- Score: Then vote, with reasons
- Contract: Written, and cancelable
Step 1 — Decide whether this job must be bid
Start with the number. In Florida, if a contract for materials, equipment or services requires payment that "exceeds 10 percent of the total annual budget of the association, including reserves, the association must obtain competitive bids." Every contract for services, and any contract for materials or equipment that will not be fully performed within a year, must also be in writing.
10 percent of the total annual budget, reserves included, is the line: a Florida HOA contract that costs more must go out for competitive bids. — Fla. Stat. § 720.3055(1)
Work it on your own numbers. A community with a total budget of $120,000, reserves included, must bid any contract over $12,000. A $14,000 repaving job is over the line. A $9,000 landscaping contract is not.
Florida also lists exceptions. Contracts with employees, and contracts for attorney, accountant, architect, community association manager, engineering and landscape architect services, are not covered. Neither is a genuine emergency, a vendor that is the only source of supply in the county, or a service provided under a local government franchise. A contract that was bid, and that the board can cancel on 30 days' notice, can be renewed without bidding again.
And your documents can be stricter. Florida lets an association follow its own declaration or bylaws on bidding instead of the statute, as long as they are not less stringent.
Worth knowing Even where your state sets no bid rule, a board that writes its own threshold into a resolution (for example, three bids for anything over a set amount) has an answer ready the day a homeowner asks why this vendor.
Done: the job is marked "must bid", "bid anyway" or "exempt", with the reason written in the board's file.
Step 2 — Write one scope every bidder prices
The scope is the bid. Without one, each vendor prices their own version of the job, and you get three prices for three different jobs.
A one-page scope answers seven questions:
- What work, in plain words (seal and restripe the clubhouse lot).
- Where, exactly (the lot and the two entrance aprons, not the side streets).
- How often, for recurring work.
- What materials or standard (the product type, or "equal or better", so bids stay comparable).
- What is included that vendors often leave out: debris hauled away, permits, cleanup, traffic cones, notice to residents.
- When: the start window, the finish date, and the hours work may happen.
- What "done" looks like: the walk-through, who signs it off, and what gets fixed if it fails.
Then set one walk-through date and invite every bidder to it at the same time. A vendor who sees the cracked curb with everyone else prices the cracked curb. A vendor who skips the walk-through prices what they imagine.
Done: a one-page scope, dated, and a walk-through on the calendar.
Step 3 — Find three or more bidders, and say every relationship out loud
Florida's statute sets no number of bids, so three is a habit there rather than a rule, but it is a good one. Two can disagree with no way to tell which is the outlier. Three or more show you the range.
Look in four places: neighboring associations (ask their board who they use and whether they would hire them again), the vendors who already work in your community for other clients, your state's contractor licensing lookup, and trade associations for the work in question.
Before a bid goes out, ask every director: do you, or does anyone in your family, have any connection to these companies? Write the answer in the minutes.
Florida makes this a rule with teeth. A director must disclose anything that could reasonably be seen as a conflict of interest at least 14 days before the vote or the contract, and an undisclosed contract with a director or a director's relative is presumed to be a conflict. If the association contracts with a director, or with a company where a director is also a director or officer or is financially interested, the board must make the disclosures the state's nonprofit law requires, enter them in the minutes, and approve the contract by a two-thirds vote of the directors present. At the next members' meeting the contract must be disclosed, and on any member's motion the members can vote to cancel it by a majority of those present.
The board member whose cousin runs a roofing company is not the problem. The cousin's bid arriving without anyone saying so is.
Done: three or more bidders invited, and every director's answer to the relationship question in the minutes.
Step 4 — Collect every bid on one form, by one date
Send each bidder the same packet: the scope, the walk-through date, a one-page bid form, the date and time bids are due, and the one address they go to.
The bid form asks the same things of everyone:
- The total price, and the price broken into labor, materials and anything optional
- What the price includes and, just as important, what it excludes
- The start date and the number of working days
- The payment schedule they expect
- Their license number and the state that issued it
- Their insurance agent's name and phone number
- Two references from communities or commercial clients, with a phone number for each
- How long the price is good for
When a bidder asks a question, answer it in writing and send the answer to every bidder. A detail one company learns on the phone is a detail the other two did not price.
Open the bids together, after the due date, ideally at a properly noticed board meeting, so no one sees one price before the others are in. A late bid stays closed unless the board decides, in writing, to extend the date for everyone.
Done: every bid on the same form, opened together, and logged with the date it arrived.
Step 5 — Check what a bid cannot tell you
A bid tells you a price, not whether the company is licensed, insured or any good. Check all three before the vote.
The license. Many states post a public lookup for contractor licenses. Search the license number on the bid form, check the name matches the company on the bid, and check it is active for the kind of work in the scope.
The insurance. Read the top of the vendor's certificate of insurance. The standard form says: "THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER." The same form says that if the certificate holder is an additional insured, "the policy(ies) must have ADDITIONAL INSURED provisions or be endorsed."
No rights is what a standard certificate of liability insurance gives the association holding it, by its own printed words. The endorsement is what counts. — ACORD 25 Certificate of Liability Insurance, sample published by the North Carolina Office of State Fire Marshal
So ask for three things, not one: the certificate naming the association as certificate holder, the additional insured endorsement itself, and proof of workers' compensation coverage where your state requires it. Then call the agent listed on the certificate and confirm the policy is active and the dates are right. It is one short call.
The references. Call two. Ask three questions: Did they finish when they said they would? Did the final bill match the bid? Would you hire them again? The third answer is the one that matters, and the pause before it tells you as much as the words.
Done: for each finalist, a license checked, the endorsement in hand, the agent called, and two references called, all noted on the bid file.
Step 6 — Score the bids, then vote with your reasons
Lay the bids side by side on one sheet. Give each one a mark for five things: price, how closely it matches the scope, the schedule, the references, and the insurance. Write a sentence beside any bid that is far from the others, high or low. A bid far below the rest often prices a smaller job.
You do not have to take the lowest bid. Florida's statute says so in as many words: "Nothing contained in this section shall be construed to require the association to accept the lowest bid." What the board owes the community is a reason.
At the meeting, the person who ran the bid presents the scorecard in two minutes. The board discusses, the chair states the motion in exact words ("award the parking lot seal and restripe to the second bidder at the bid price, because its scope includes the entrance aprons and both references would hire it again"), and the board votes.
Done: a scorecard in the bid file, and a motion in the minutes that names the vendor, the price and the reason.
Step 7 — Put it in a written contract you can leave
The winning bid is not the contract. Turn it into one before any work starts, and make sure it carries these clauses:
- The scope, attached, so "the job" means the page the vendor priced
- The price, and a payment schedule tied to work finished, not to dates on a calendar
- Change orders only in writing, signed by the board's named officer, before the extra work is done
- Insurance kept in force for the whole term, with a new certificate at every renewal
- The start date, the finish date, and what happens if they slip
- A term, how it renews, and how either side can end it
That last clause is the one boards regret leaving out. A contract the board can cancel on 30 days' notice is the easiest to fix if the vendor disappoints. In Florida it also has a second benefit: a contract that was bid and carries a 30-day cancellation clause can be renewed without bidding it again.
Done: a signed contract with the scope attached, the endorsement on file, and the cancellation date written on the board's calendar.
What your HOA management contract actually costs
How to tell it worked
- Every bid priced the same written scope.
- Every director's answer to the relationship question is in the minutes.
- The finalists' licenses, endorsements and references were checked before the vote.
- The minutes name the vendor, the price and the reason it won.
- The contract has the scope attached and a cancellation clause.
- The next renewal date is on the board's calendar, with a reminder 60 days before.
Six ticks is a contract any future board can defend.
Bottom line: A good vendor is chosen on paper before anyone shakes a hand. Write one scope, send it to three or more bidders on one form, check the license, the insurance endorsement and two references, vote with your reasons in the minutes, and sign a contract you can leave. Start with the next contract that comes up for renewal.
Frequently asked questions
How do you bid out an HOA contract? Write a one-page scope, invite three or more vendors to one walk-through, and collect every bid on the same form by the same date. Check each finalist's license, insurance endorsement and references, score the bids, vote with the reason in the minutes, and sign a written contract with the scope attached.
Does an HOA have to get three bids? It depends on your state and your documents. Florida requires competitive bids for any contract over 10 percent of the total annual budget, including reserves, but does not set a number of bids. Three is a sensible habit anywhere.
Does an HOA have to accept the lowest bid? Not in Florida, where the statute says nothing in it requires the association to accept the lowest bid. Wherever you are, record why the board chose the bid it did.
Can an HOA board member's company bid on an association contract? In Florida it can, but the director must disclose the conflict at least 14 days before the vote, and the board must make the required disclosures, enter them in the minutes and approve the contract by a two-thirds vote of the directors present, and the members can cancel it at their next meeting. Check your own state's rules and your documents.
What insurance should an HOA require from a vendor? The certificate, the additional insured endorsement itself, and proof of workers' compensation where your state requires it. A certificate alone confers no rights, so confirm the policy with the agent listed on it.