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Law Educator, Esq.
Law Educator, Esq., Lawyer
Category: Real Estate Law
Satisfied Customers: 118253
Experience:  Licensed attorney practicing landlord-tenant, land use and other real estate law and litigation.
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Can the Board of a HOA enter into a term (10 years) contract

Customer Question

Can the Board of a HOA enter into a long term (10 years) contract with a service provider and not provide the membership the complete financial details of such contract. Details which include specific line items and cost for same are withheld by claiming they are under a confidentially agreement and can only provide such information after the contract has been signed.
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  Ray replied 1 year ago.

Hi and welcome to JA. I am Ray and will be the expert helping you today.

You can certainly challenge this.The membership should have right to know what the cost is here.This appears to go beyond their authority.Unless the CCRs or rules permit it then the HOA membership can challenge this.

This might also be grounds for removal of the board if they exceeded their authority under the CCRs and HOA rules here It would appear to do so since the membership should have access to the information.

Expert:  Ray replied 1 year ago.

Here in this situation both the Condominium Act, statue 718, and the HomeownersAssociation Act, chapter 720 of the Florida statutes, say that associations must maintain certain records, called ‘official records,’ and must make them available for inspection by owners. Owners are entitled to see practically every financial record of the association.They appear to be violating the law by not making this public information to the ownership of the HOA.

Expert:  Ray replied 1 year ago.

You may consider a demand letter making such an information request to see if they produce it, you can cite the Acts above as grounds for your request.If refused a civil suit may be warranted and removal of the board as well if they will not change their minds.

I appreciate the chance to help you today.Thanks again.

Customer: replied 1 year ago.
Great you are admitted to the Texas bar I live in Florida what jurisdiction do you have here and do your opinions hold up there are extensive rules and regulations under Florida law number 720 this seems to have Your comments are very general and I don't know if they have any validity in my state if I am going to pay for service I would prefer having a Florida reprove the tourney responding
Expert:  Ray replied 1 year ago.

I will be happy to opt out.Thank and good luck here.No need to rate others will pick it up.

Customer: replied 1 year ago.
We understand our legal access to existing files and records. We want full disclosure of a pending contract that is going to be signed on behalf of the membership
Expert:  Law Educator, Esq. replied 1 year ago.
Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.
Under FL law,(###) ###-####Contracts for products and services; in writing; bids; exceptions.—
"(1) All contracts as further described in this section or any contract that is not to be fully performed within 1 year after the making thereof for the purchase, lease, or renting of materials or equipment to be used by the association in accomplishing its purposes under this chapter or the governing documents, and all contracts for the provision of services, shall be in writing. If a contract for the purchase, lease, or renting of materials or equipment, or for the provision of services, requires payment by the association that exceeds 10 percent of the total annual budget of the association, including reserves, the association must obtain competitive bids for the materials, equipment, or services. Nothing contained in this section shall be construed to require the association to accept the lowest bid.
(2)(a)1. Notwithstanding the foregoing, contracts with employees of the association, and contracts for attorney, accountant, architect, community association manager, engineering, and landscape architect services are not subject to the provisions of this section.
2. A contract executed before October 1, 2004, and any renewal thereof, is not subject to the competitive bid requirements of this section. If a contract was awarded under the competitive bid procedures of this section, any renewal of that contract is not subject to such competitive bid requirements if the contract contains a provision that allows the board to cancel the contract on 30 days’ notice. Materials, equipment, or services provided to an association under a local government franchise agreement by a franchise holder are not subject to the competitive bid requirements of this section. A contract with a manager, if made by a competitive bid, may be made for up to 3 years. An association whose declaration or bylaws provide for competitive bidding for services may operate under the provisions of that declaration or bylaws in lieu of this section if those provisions are not less stringent than the requirements of this section.
(b) Nothing contained in this section is intended to limit the ability of an association to obtain needed products and services in an emergency.
(c) This section does not apply if the business entity with which the association desires to enter into a contract is the only source of supply within the county serving the association.
(d) Nothing contained in this section shall excuse a party contracting to provide maintenance or management services from compliance with s. 720.309."
FS 720.309 in pertinent part only states, "(a) Any contract entered into by the board may be canceled by a majority of the voting interests present at the next regular or special meeting of the association, whichever occurs first. Any member may make a motion to cancel such contract, but if no motion is made or if such motion fails to obtain the required vote, the contract shall be deemed ratified for the term expressed therein."
If you note in the FL law there is no provision for what you are asking for. It would have to be something in your association bylaws that you would be relying upon to get the disclosure of the contract details and financial information. If the bylaws do not allow you to get the information, then you still have a right to seek to cancel the contract by a vote of the members and not ratify it. So you have the board backed up to the wall if the members refuse to vote to pass the contract without the information (whether the laws or bylaws mandate they disclose the information) because the members can tell the board they will vote down the contract without the information.