Reviewing the Management Agreement: Licensure, Authority, Records and the Way Out

Jason Hamilton Mikes, JD, MBA
Founder & Managing Shareholder

• Published September 25, 2026
• Reviewed by Jason Hamilton Mikes, JD, MBA, September 26, 2026
• Florida Statutes as of July 1, 2026
• Applies to: Condominiums · HOAs · Cooperatives

Boards spend more time on the landscaping bid than on the management agreement, which is backwards. The management contract sets the spending authority, the bidding process, the staffing, the fee structure and the custody of the association's records for the next several years, and it is almost always the manager's form. This guide walks the clauses in the order they matter, and notes where the three chapters treat them differently.

Start with licensure, and with who holds it

Community association management is a licensed activity under Chapter 468, Part VIII. Section 468.431(2) defines community association management as practices requiring substantial specialized knowledge, judgment and managerial skill, done for remuneration, for associations containing more than 10 units or with annual budgets in excess of $100,000. Section 468.432(1) prohibits a person from managing or holding herself or himself out as able to manage a community association unless licensed by the department, and § 468.432(2) requires the firm itself to hold a separate community association management firm license.

So there are two licenses to verify, not one. Ask for both numbers, confirm them with the Department of Business and Professional Regulation, and write both into the agreement. Then ask what happens if the named manager leaves.

A manager-approval clause is one of the few provisions boards ask for and usually get. The version that works names the individual, requires written notice of any change, gives the association a stated number of days to object to a replacement, and makes an unresolved objection a ground for termination without penalty. The version that does not work promises a qualified manager.

What the statute puts inside the contract, and what your chapter does not

Condominium associations get a statutory content requirement that homeowners associations and cooperatives do not. Section 718.3025(1) says that no written contract between a party contracting to provide maintenance or management services and an association providing for operation, maintenance or management of a condominium association or property serving the unit owners is valid or enforceable unless it does six things.

1. Specifies the services, obligations and responsibilities of the contracting party. § 718.3025(1)(a)
2. Specifies the costs incurred in performing them that are to be reimbursed by the association. § 718.3025(1)(b)
3. Indicates how often each service, obligation or responsibility is performed, either individually or by category. § 718.3025(1)(c)
4. Specifies a minimum number of personnel to be employed by the contracting party to serve the association. § 718.3025(1)(d)
5. Discloses any financial or ownership interest the developer holds in the contracting party, if the developer controls the association. § 718.3025(1)(e)
6. Discloses any financial or ownership interest a board member, or any party providing maintenance or management services, holds with the contracting party. § 718.3025(1)(f)

Two more subsections carry real weight. Section 718.3025(2) allows the association to procure the services from another party when the contractor fails to perform in accordance with the contract, and to collect the fees or charges paid to that other party from the original contractor. Section 718.3025(3) provides that any services or obligations not stated on the face of the contract are unenforceable. Section 718.3025(4) limits the section to contracts for which the association pays compensation, so a laundry, vending or cable concession made available for owner convenience sits outside it.

The lesson for an HOA or cooperative board is to write into the contract what the condominium statute would have required anyway. There is no reason to accept an agreement silent on services, frequencies, reimbursable costs and staffing simply because your chapter does not compel them.

Scope of authority and spending limits

The authority clause is where a board either keeps control of the association's money or hands it over in a sentence it did not read closely. Replace a vague delegation to act in the ordinary course of business with specifics.

• A dollar threshold above which the manager may not commit the association without board approval, stated per transaction and with an aggregate monthly limit so a project cannot be split into pieces below the line.
• Emergency authority that is genuinely narrow: a higher limit for conditions threatening safety or property, with notice to the president or an officer within a stated number of hours and ratification at the next board meeting.
• Signature authority on association accounts: whether the manager may sign checks at all, whether two signatures are required above a threshold, and that the association owns the accounts and the banking credentials.
• Bidding: that the manager solicits bids as the board directs, presents all bids received rather than a recommended one, and discloses any relationship with a bidder.
• What the manager may not do at all: hire or fire association employees, waive violations, settle claims, engage counsel, or sign in the association's name without a board vote.

Nothing in the agreement should give the manager authority the board itself does not have. Where an expenditure requires an owner vote, competitive bids, or a properly noticed meeting, the management agreement cannot shortcut it. Our guide to the questions to ask before signing any contract covers those thresholds.

Whose employee is the person at the front desk

On-site staffing comes in three forms and boards frequently cannot say which one they have. The management company employs everyone and bills a fee; the association employs the staff and the company supervises them; or the company nominally employs staff whose entire cost is passed through at cost plus a percentage.

The distinction decides who carries payroll tax, workers' compensation and unemployment exposure, who handles discipline and termination, who owns the risk of an employment claim, and what happens to those employees when the agreement ends. Write the answer down, and make the insurance and indemnity clauses match it.

Where staff are passed through at cost, ask for the components: wages, employer taxes, benefits, the administrative percentage, whether overtime, holiday coverage and temporary replacements are included, and who pays accrued time off at termination. Where staff are association employees, the association is an employer with all that implies, and the agreement should bar the manager from committing the association to employment terms without board approval.

Fees, ancillary charges and the escalation-clause rule

The base management fee is rarely the whole price. Agreements routinely add charges for after-hours calls, meetings beyond a stated number per year, special projects, insurance claim administration, project oversight, violation letters, estoppel certificates, transfer administration, copying and postage, and portal fees. Some are legitimately outside a base scope. All of them should be listed with prices in an exhibit, and the contract should say no unlisted charge may be imposed without board approval.

Ask where the ancillary revenue goes. Estoppel, transfer, application and late-letter charges are collected from owners or buyers, and the agreement should state whether the association or the manager keeps them. A manager retaining owner-paid fees is a business model, not a scandal, but the board should know it is happening and price the base fee accordingly.

On annual increases, condominium and cooperative boards have a statutory backstop. Florida declares that public policy prohibits the inclusion or enforcement of escalation clauses in management contracts for condominiums and for cooperatives, and defines an escalation clause as one providing that the fee increases at the same percentage rate as a nationally recognized and conveniently available commodity or consumer price index. Those prohibitions sit at § 718.302(5) and § 719.302(5). Chapter 720 has no comparable provision, so a homeowners association negotiating an index-based increase should cap it by contract the way it would in any other agreement, as described in our guide to reviewing recurring vendor contracts.

The manager's conflicts and the $2,500 bid rule

Section 468.4335 is the provision boards should know by number, because it carries the sharpest remedy in this area of the law.

A manager or management firm must disclose to the board any activity that may reasonably be construed to be a conflict of interest. A rebuttable presumption of a conflict arises where the manager or firm, without prior notice, enters into a contract with the association for services other than management services, or holds an interest in an entity that does business with the association. Where a good or service exceeds $2,500, the association must solicit multiple bids from other third-party providers. Approval requires an affirmative vote of two-thirds of all directors present. And if the section is violated, the management contract is voidable and the association may terminate it, owing only the reasonable value of the management services provided up to cancellation, with no termination fees, liquidated damages or other penalty.

Three consequences follow. Put the disclosure duty in the contract rather than leaving it to statute. Require that all bids received be presented to the board. And do not treat a termination fee as binding in a § 468.4335 situation, because the statute says otherwise. Director and officer conflicts run on a separate track, covered in our guide to conflicts of interest on the board.

Insurance, fidelity coverage and indemnity

Require four coverages and verify all four: general liability with the association as an additional insured, workers' compensation for the company's personnel, professional liability covering management services, and a fidelity bond or crime policy covering theft of association funds.

Condominium associations have a statutory fidelity requirement of their own. Section 718.111(11)(h) requires insurance or a fidelity bond for all persons who control or disburse association funds, including anyone authorized to sign checks and the president, secretary and treasurer, covering the maximum funds in the custody of the association or its management agent at any one time, with the association bearing the cost. Whether your chapter imposes a comparable requirement is worth confirming; the contractual answer is the same everywhere. Require the coverage, name the association, and get a certificate annually rather than once.

Then read the indemnity and limitation of liability clauses together. Manager forms often require the association to indemnify the company against claims arising out of the engagement, including claims caused by the manager's own negligence, and cap the manager's liability at a few months of fees. Push for mutual indemnity, an exclusion for the manager's negligence, gross negligence and willful misconduct, and a cap tied to the professional liability limits the manager must carry.

Records ownership, return and transition assistance

This is the clause that determines how a change of management actually goes. The association's official records are the association's property, and the agreement should say so in those words, covering paper files, accounting data, owner and tenant information, vendor contracts, architectural files, violation histories, and the association's e-mail domain, website content and portal data.

Records custody also carries a deadline the manager is operating against: a condominium must make official records available within 10 working days of a written request, a homeowners association within 10 business days. The manager holds the records and usually prepares the response, so the agreement should state who receives requests, who responds, by when, and at whose cost. Our guide to responding to records requests covers the mechanics.

On termination, the agreement should require:

• Return of all records within a stated number of days, not "promptly," with a shorter deadline for what the successor needs first: bank records, the delinquency ledger, current contracts and the insurance file.
• Accounting data in a usable export format rather than a locked report, plus a final reconciled financial statement through the termination date.
• Transfer of accounts, credentials, keys, fobs, access and alarm codes and domain control, with the association named as account holder throughout.
• A stated number of hours of transition assistance at no charge, and an hourly rate beyond it.
• That no records may be withheld over a fee dispute, which is the most important sentence in the paragraph.

Where the records live in the manager's proprietary system, ask before signing what the export looks like and what becomes of historical documents stored there. Our guide to managing electronic records covers the format questions.

Term, termination and the clauses never to accept

Prefer a one-year term renewing automatically unless either party gives 60 days written notice, over a three-year term with a penalty for early exit. Where the board wants continuity, get it with an option the association may exercise.

Termination for cause should run on a short notice period, with a cure right for curable defaults and none for theft, fraud, loss of licensure or failure to maintain required insurance. Termination for convenience should be available on 30 or 60 days notice, and a convenience fee is a price to negotiate rather than a fixed term. Where the manager has violated § 468.4335, the statute leaves the association owing only the reasonable value of services and no penalty.

Finally, the provisions to strike. None of these is unusual and none of them should survive review:

• An exclusive dealing or right-of-first-refusal clause requiring the association to use the manager's affiliated maintenance, construction, insurance or collection company.
• A fee on termination equal to the remaining contract term, which converts a termination right into a buyout.
• A non-solicitation clause barring the association from hiring the on-site manager, or imposing a placement fee if it does, without a reasonable time limit.
• An automatic fee increase tied to an index, in a condominium or cooperative, where the statute declares such clauses void.
• A records lien or any right to withhold records pending payment.
• Unilateral amendment of the fee schedule, the scope, or incorporated terms posted on a website.
• A limitation of liability equal to one or two months of fees combined with a broad association indemnity running the other way.

Run the review before the renewal notice window opens, not after. A board that starts reading the agreement in the month the notice is due has already given away its bargaining position. The management agreement review checklist puts this article into a single page for the board packet.

For community association managers: see Manager or Lawyer? in the Manager Resource Center.

Contact Hamilton Mikes

Hamilton Mikes reviews and negotiates management agreements for condominium, cooperative and homeowners association boards in Lee, Collier and Charlotte Counties, including transitions between management companies and the records return that follows. Call 239-594-7227 or visit our Contract Management page.