BOARD NEWS AND EDUCATION - SEPTEMBER 2026

Dear Board Member,

A community association contract is much more than an agreement to purchase a product or service. It is the culmination of a governance process through which the board identifies a need, confirms the association’s responsibility and authority, determines how the work will be funded, obtains appropriate professional guidance, evaluates competing proposals, selects a qualified provider, allocates risk, and establishes how performance will be monitored.

That is why this month’s Board Governance Review examines contracting and procurement as a complete process—not simply as the act of obtaining bids or signing a vendor’s proposal.

We begin at the moment when the final agreement is presented to the board for approval. Before the Board Signs: Five Final Questions provides a final governance test: Does the agreement reflect what the board selected? Does the board understand the association’s complete financial commitment? Has risk been appropriately addressed? Have the conditions required for signing been satisfied? Has the association established how the agreement will be administered after execution?

From there, the issue traces the decisions that should lead to that signature. Separate articles address the statutory and practical considerations affecting condominium and homeowners’ association boards. They examine responsibility for the proposed work, board and owner authority, competitive-bidding requirements, conflicts of interest, project funding, reserves, special assessments, licensing, insurance, permits, Notices of Commencement, contract approval, website and recordkeeping obligations, and continuing oversight after work begins.

The board’s responsibility does not end when a vendor is selected—or even when the contract is signed. Significant projects must also be administered carefully. This issue therefore includes a detailed discussion of payment applications, schedules of values, stored materials, progress verification, change orders, lien releases, contractor affidavits, retainage, final payment, and project closeout. The goal is not to turn directors or managers into engineers, construction managers, accountants, insurance professionals, or attorneys. It is to help the board recognize which questions must be answered, which documents should be received, and when qualified professional guidance is needed.

The Questions from the Board section addresses several of the practical issues that frequently arise during procurement: whether management may obtain bids, how many bids are actually required, whether a director may recommend a vendor, how potential conflicts should be handled, when a contract may be renewed without rebidding, whether the preferred vendor may be asked to negotiate, and whether work should begin before the agreement is fully executed.

Finally, the Florida Association Procurement Checklist brings the issue together as a working reference for condominium and homeowners’ associations. It follows the process from defining the need and confirming authority through competitive bidding, vendor verification, contract approval, project startup, payment administration, closeout, and preservation of the association’s records.

No publication can anticipate every contract, property, governing document, or project condition. The purpose of this issue is to provide boards with a practical governance framework: a disciplined process that helps directors understand the proposed commitment, ask informed questions, involve the right professionals, document the decision, and protect the association throughout performance.

The board’s signature should confirm an informed decision—not create one. Thank you for your continued commitment to responsible, informed association governance.

— Be well. Doug Jenkins, Director of Learning & Development

Upcoming Online Board Education Events:

Individual Registration is required for all courses*.

HOA - Record Keeping – Licensed Community Association Manager 3-Hour EH-1 CEU

Homeowners’ Association Record Keeping - Understanding the Statute. Managing Compliance.

Protecting the Association. Three (3) hours of Continuing Education Unit credit for Licensed

Community Association Managers for the EH-1 HOA - Record Keeping category. – Presented by Doug Jenkins

BOARD MEMBERS ARE WELCOME TO ATTEND BUT RECEIVE NO CEU CREDIT

Sept 9, 2026 at 02:00 PM – Registration Required

https://us02web.zoom.us/webinar/register/WN_qCYqFlSHTrCIizMbE87_NQ

Sept 15, 2026 02:00 PM – Registration Required

https://us02web.zoom.us/webinar/register/WN_oqgbgQjWT62PUHE_jsE1Tg

Homeowners’ Association Board Member Certification

New Homeowners' Association Board Member Four-Hour Education Certification

DBPR Required Four-Hour Certification Course for Homeowners' Association Board Members

Subject to Florida Statute 720 – Presented by Doug Jenkins

Sept 30, 2026 01:00 PM - Registration Required

https://us02web.zoom.us/webinar/register/WN_tLNDvDDVQJ-yNM_pE8p8aQ

Condominium Board Member Certification

New Condominium Board Member Four-Hour Education Certification

DBPR Required Four-Hour Certification Course for new Condominium Association Board

Members Subject to Florida Statute 718 – Presented by Doug Jenkins

Oct 8, 2026 01:00 PM – Registration Required

https://us02web.zoom.us/webinar/register/WN_ZH5MWjFtSXqxCXT9h8l6_g

Myth vs. Reality: “The Proposal Is the Contract”

❌ Myth

The board approved the vendor’s proposal, so signing the proposal gives the association an

adequate contract.

✅ Reality

A signed proposal may become an enforceable contract, but that does not mean it contains the

protections the association needs.

Proposals often lack: Clear change-order authority; Payment conditions and retainage; Start and completion requirements; Insurance and indemnification; Permit and lien responsibilities; Propertydamage responsibility; Termination and default rights; Warranty administration; Dispute provisions; Required closeout documents and other important contract language.

The question is not whether the signed proposal can be a contract. The question is whether it is an adequate contract for the protection of the association and the project scope.

BEFORE THE BOARD SIGNS: 5 FINAL QUESTIONS

Prior to executing major vendor contracts, ensure your board reviews these essential checkpoints:

1. Scope Verification — Does the final contract match the board-approved proposal, specifications, and project scope?
2. Total Financial Commitment — Are all extra costs—such as permits, allowances, material storage, change orders, and professional fees—accounted for beyond the base price?
3. Risk Allocation — Have you thoroughly reviewed termination rights, indemnification language, and insurance requirements?
4. Governance & Prerequisites — Have all board meeting notices, owner approvals, permits, and Notices of Commencement been fully satisfied?
5. Contract Administration — Has the board designated a single point of contact to manage timelines, invoice approvals, and contractor performance?

PROCUREMENT & CONTRACTING GUIDE

Navigating Association Contracts & Statutory Mandates

Managing association vendor relationships and large-scale projects requires clear processes, fiscal responsibility, and strict adherence to statutory compliance. Before entering into binding agreements, boards must carefully evaluate legal bidding thresholds, reserve requirements, and risk mitigation strategies.

Key Statutory Bidding Requirements

• Condominium Associations (Chapter 718): Competitive bidding is legally required for any contract that exceeds 5% of the association’s total annual budget, including reserve funds.

• Homeowners' Associations (Chapter 720): Competitive bidding is triggered when a proposed contract exceeds 10% of the total annual budget, inclusive of reserves.

• Conflict of Interest Disclosures: Under Chapter 720, board directors are required to disclose any potential conflicts of interest at least 14 days prior to a board vote on a contract.

• Architectural Review Independence (HB 803): Associations cannot require an owner or contractor to obtain a building permit as a prerequisite for submitting or receiving association architectural review approval.

Essential Contracting & Governance Best Practices

• Scope & Financial Alignment: Always verify that the final contract accurately reflects the board-approved proposal and scope of work. Account for potential costs beyond the base contract price, including permits, contingencies, allowances, material storage fees, and professional oversight.

• Material Alterations & Reserves: Confirm whether planned work constitutes a material alteration requiring a 75% owner approval vote under Chapter 718. Additionally, cross-reference structural projects against the association’s Structural Integrity Reserve Study (SIRS) and declaration responsibilities.

• Payment Administration & Lien Protection: Before approving payment applications (such as AIA G702/G703 forms), have a designated project professional verify work progress and stored materials. Always collect progress or final lien releases and contractor affidavits under Chapter 713 to safeguard the association against double liability.

• Clear Roles & Administration: Designate a single point of contact (such as the property manager or project manager) to oversee contractor performance, track schedules, and handle invoice workflows.

Questions From the Board: Contracts, Bids, Authority, and Vendor Selection

By Doug Jenkins

When is competitive bidding legally required?

• Condominium Associations (Chapter 718): Required for any contract that exceeds 5% of the total annual budget, including reserves.
• Homeowners' Associations (Chapter 720): Required for any contract exceeding 10% of the total annual budget, including reserves.

What authority and prerequisites are needed before signing?

• Board & Owner Approvals: Confirm all board meeting notices were properly issued and required owner votes are secured—such as the 75% owner approval required for material alterations under Chapter 718.
• Conflict Disclosures: Ensure board members disclose any potential conflicts of interest at least 14 days prior to voting on a contract under Chapter 720.
• Permit Independence: Under HB 803, associations cannot require building permits as a prerequisite for architectural review approval.

How should vendor contracts be evaluated and total costs managed?

• Scope & Terms: Verify that the written contract matches the board-approved proposal and clearly defines risk allocation, termination rights, indemnification, and insurance coverage.
• True Financial Commitment: Account for costs beyond base pricing, including permit fees, allowances, material storage, change orders, and professional oversight.

What safeguards exist for payment and project execution?

• Contract Administration: Designate a single point of contact to manage timelines, performance, and invoice workflows.
• Lien Protection: Review AIA G702/G703 forms with a professional prior to payment, and collect progress/final lien releases and contractor affidavits under Chapter 713 to prevent double liability.