Contracts & Vendors

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  • Can the Board hire a contractor without owner approval?

    Boards generally have substantial authority to manage association operations and contract for services, subject to applicable law, budgets and governing documents.


    Large projects can present additional approval, financing or assessment issues.

  • Does the association have to obtain three bids?

    Many Boards follow a multiple-bid policy because competitive bidding is a sound business practice.


    Whether a particular number of bids is legally required depends upon applicable authority and circumstances. Boards should not confuse a good governance practice with a statutory mandate.

  • Should association counsel review major contracts?

    For significant projects, legal review before signature can prevent expensive problems later.


    Important provisions may address scope, payment, insurance, indemnification, warranties, termination rights, dispute resolution, change orders and responsibility for delays.


    The cost of reviewing a contract before signing it is often modest compared with the cost of litigating an unfavorable provision afterward.

  • Can the Board terminate a management company?

    Potentially, but the management agreement must be reviewed first.


    Termination rights, notice periods, termination fees and transition obligations are contractual issues. A Board should understand them before announcing a change.