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Letter to the editor

For condo repairs, the lowest bid isn't always the best

By Richard White, Special to the Times
Published March 8, 2008

Q: Florida Statute 178.3026 states that "nothing contained herein shall be considered to require the association to accept the lowest bid." Can you elaborate on why such a remark in the statutes lets the board accept a higher bid?

A: Before board members seek a bid, they should produce a specification package for vendors to review so everyone is bidding on the same thing. Each vendor should submit a qualification package that includes references and proof of licenses and insurance.

I once managed a community that was seeking a paving contract. Company Y was the low bidder by $10,000 . . . but the company included a card in its bid package that was good for a "gift" of $1,000 if it was awarded the contract - in other words, a bribe. That was a good reason not to accept the lowest bid. Another less toxic example: A company that offers the low bid might have little or no experience in the kind of job for which you're seeking bids; you'd do better to spend a little more and hire a company that knows what it's doing.

Small association may pay for some services

Q: I am the president, treasurer and a board member of our condominium association there are only six units. We are self-managed, and I do the vast majority of the management. Is it appropriate for me to charge for my business management services and for costs associated with personal expenses? I have been doing this, voluntarily since 1997, but feel I have been shortchanging myself. I am not a licensed manager, having only learned as I go.

A: Small associations - fewer than 50 units and budgets under $100,000 - can pay a non-licensed person for management services. Your situation highlights the problem small associations face: The pool of volunteers is smaller, and your per-unit share of the expenses is higher.

Flooding can affect fourth-floor units too

Q: Every year my mortgage lender asks for proof of insurance. This year, after I had my insurance company send a Certificate of Flood Insurance, I got a letter from the lender saying the amount of flood insurance carried by my condo association is insufficient. The board president and the insurance agency assure me we're adequately insured and complying with all the legal requirements. I can't force the association to buy more insurance. I live on the fourth floor of a steel-reinforced concrete building. There's no way a flood would reach my floor. We haven't had a serious hurricane here in years. Every year I feel I have to jump through hoops to satisfy the lender. What is the bank up to, and is it legal and appropriate?

A: Take it easy. The bank's letter is a standard form letter. Have the board ask the insurance agent for a letter that shows proper flood insurance coverage and send it to the lender.

However, you're incorrect to think that you're safe on the fourth floor. The building's foundation could be washed away, making your upper floor uninhabitable. That could happen in a stiff summer storm; it might not even take a hurricane.

Richard White is a licensed community associations manager. Write to him c/o Community Living,St. Petersburg Times, P.O. Box 1121, St. Petersburg, FL 33731. Sorry, he can't take phone calls or provide personal replies by mail, but you can e-mail him at CAMquestions@cfl.rr.com. Please include your name and city. Online: talkwithcam.com.

[Last modified March 7, 2008, 13:42:48]