Policy should govern the bidding process
Q. Is it necessary for a board to obtain multiple bids for every project?
A. A board should establish a policy that describes the types of projects and/or dollar amounts of projects that will require multiple bids. Expensive, nonrecurring projects are particularly appropriate to put out for multiple bids. It is important that an engineer be called upon to prepare detailed bid specifications, so that each contractor is bidding on identical criteria. This permits the board to make an "apples-to-apples" comparison of the various bids. However, the policy should carefully describe when multiple bids may not be required.
An association may have a particularly good relationship with a particular vendor, developed over many years, that it simply wants to retain for similar work. Further, personal services, like that provided by attorneys and accountants, are not necessarily appropriate for a "bidding" process; although personal interviews are certainly suggested. Occasionally, an association's declaration or bylaws requires competitive bidding, so it would be useful for you to peruse those documents.
Q. I am on the board of a self-managed association. We are about to enter into a contract with a cleaning/janitorial service. The contractor will keep the common areas of our mid-rise building clean, and change bulbs, as well as other light maintenance responsibilities. The contractor has requested that the board open an account at a local hardware store so that the contractor can purchase supplies and materials, and that the board give the contractor signature authority on this account. Is this permissible?
A. While permissible, the board should consider whether this is a good idea. I would not necessarily be comfortable giving a contractor access to an association charge account. It may be more prudent for the board to purchase supplies and materials for the contractor's use. Or, the contractor could purchase materials and supplies and be reimbursed by the association with appropriate receipts and proof they were acquired for the association.
Q. Our condominium association is considering amending the association's declaration to limit the number of units that can be leased at one time. Leasing would be capped at some stated percentage of the units. How does the association address who can lease their unit when the maximum number of units is being leased?
A. Rules should be adopted by the board that provide for the creation of a "waitlist." Unit owners would be placed on the waitlist in the order in which a notice of intention to lease is received by the board from the owner. When the total number of units being leased falls below the maximum number of units that can be leased, the person at the top of the list would be given an opportunity to lease their unit.
The rules should also provide a time limit for the person at the top of the list to find a tenant and sign a lease. If the owner fails to find a tenant and present a signed lease by that time, the next person on the waitlist would be given the same opportunity. The rules would have to contain more detail than this, but this should give you a sense of what is involved.
Q. Is there a minimum number of times the board of our association must meet?
A. The requirements for a condominium and a common interest community association are the same. The board must meet at least four times a year. Many association boards meet more frequently, often monthly. The actual number of meetings held each year, over and above the required minimum, should depend on the business that needs to be conducted.
• David M. Bendoff is an attorney with Kovitz Shifrin Nesbit in Buffalo Grove. Send questions for the column to him at CondoTalk@ksnlaw.com. The firm provides legal service to condominium, townhouse, homeowner associations and housing cooperatives. This column is not a substitute for consultation with legal counsel.