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Is Bidding War Legal?

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By RICHARD WHITE

Tribune correspondent

Published: March 22, 2009

Q. I am a board member of our homeowners association and am concerned about the possibility of bad or illegal business practices.

Our HOA is responsible for painting the homes. We have a property management company that, in the past, set up specifications for the project with input from the board and let it out for bids. The board then voted on the sealed bids.

Another director has assumed the personal authority to identify contractors, issue specs without board approval and receive bids not sealed. There are no records of the board authorizing the expenditure. This same board member will be voting to award the contract. Is this legal?

NN

North Tampa

A. If a director sees a problem he or she should notify the other directors and then, with permission, proceed in creating the bid specifications, let the bid, receive the bids, and then, at a board meeting, ask to place the item on the agenda. That process works if the board has all the facts of the specifications and the bids. The bids do not need to be sealed unless your documents require that.

If the facts are known to the board and it is an agenda item, all the directors can vote on the bids. But, if a director presents only a bid at a meeting and it is not on the agenda or not all of the facts are presented, the board cannot approve the bid.

Yes, he can vote because he is a director.

Q. I have been a longtime director at a condominium community. In the past, our president and vice president always prepared agendas for our board of directors meetings. We now have a new director who does not like this practice, but our documents and bylaws are silent on the issue.

Are we doing the right thing? How do others handle this?

DY

Tampa

A. Seven to eight days before the meeting, any owner or director who wants an item placed on the agenda should submit a written request to the president/manager. Then, five days before the meeting, the president/manager should send a draft copy of the agenda to the directors. Since the president can add or delete any item that was requested, providing an advance copy of the agenda will give the directors time to respond. If a majority of the directors want an item that was not on the agenda, they can send the agenda back by the fourth day and request the modification.

The president/manager then finalizes the agenda and sends the meeting notice, agenda, and package of any support material to the directors. The statutes say the meeting notice must be posted 48 hours before the meeting. This schedule should give the directors time to study the package in order to prepare for the meeting.

Another part of the process concerns motions to be made. I like to see the president appoint an individual director, several days before the meeting, to be responsible for an important agenda item. That director becomes very knowledgeable about the agenda item, and submits a written draft motion, which is included in the meeting package.

That way, the other directors can study the motion along with support material before the meeting. That saves time and makes for a more professional meeting because the directors should all arrive knowing something about what they'll be voting on.

Richard White is a licensed community association manager. He does not offer legal opinions; any other questions and comments concerning association operations can be sent to Richard White, 6039 Cypress Gardens Blvd., No. 201, Winter Haven FL 33884; or e-

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