Does an HOA have to get competitive bids for contracts?
By OurHOA · General information · Revised
Check the applicable bidding threshold, exceptions, and governing documents. Compare the same scope of work and record why the selected proposal meets the association’s needs.
Find the rule that applies to this contract
There is no single bidding requirement for every HOA. Check the jurisdiction, association type, governing documents, and purchasing policy. Identify how any threshold is calculated, which contract categories it covers, and whether renewals or emergencies have separate treatment. Do not substitute a familiar three-bid rule for the actual provision. Requirements for requesting proposals, receiving proposals, and approving a contract may be different.
Read a state threshold together with its exceptions
For Florida homeowners’ associations covered by section 720.3055, specified contracts requiring payment above 10 percent of the total annual budget, including reserves, require competitive bids. The section does not require accepting the lowest bid. It also contains exceptions, including listed professional services and provisions addressing emergencies, renewals, and a sole source within the county. Read the full section and any applicable governing-document provisions before deciding whether a particular contract falls within it. This is not the bidding rule for every condominium or association in another state.
Give bidders a common scope
Write down the locations, quantities, materials or service frequency, expected schedule, access conditions, cleanup, and items excluded from the work. Ask each bidder to identify assumptions and extra charges. If one landscaping proposal includes irrigation repairs and another excludes them, the totals are not directly comparable. For specialized work, obtain qualified help defining the scope before collecting prices that answer different questions.
Compare qualifications and contract terms as well as price
Check relevant licensing, insurance, references, scheduling, warranty terms, and responsibility for permits where applicable. Review the proposed payment milestones, change-order process, cancellation provisions, and renewal terms. Mark estimates and allowances rather than treating them as fixed prices. Keep the reasons for selecting a proposal, including any material differences from a cheaper one. Competitive bidding is a decision tool, not a guarantee of good performance or legal immunity.
Handle limited responses and conflicts openly
Keep a record of who was invited, what scope they received, and whether they declined or failed to respond. If the required process has not been satisfied, determine the proper next step before awarding the work; do not invent a second quote or call routine delay an emergency. Disclose relevant director relationships and apply the separate conflict procedure. More bids do not erase an undisclosed interest.
Retain the approval and payment record
Keep the solicitation, received proposals, comparison, approval, signed agreement, and later change orders together. Owners seeking these records should identify the project and use the applicable inspection process; access may have exceptions or redactions. Before changing where a vendor is paid, verify the instruction through an independently established contact. The FBI’s business email compromise guidance explains why an apparently familiar email thread is not enough to verify new bank details.
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These guides are general education for HOA boards and residents, not legal, tax, or financial advice. Rules vary by state and by your community's governing documents - check with a professional for your situation.