Eight Questions Your Board Should Answer Before It Signs Any Contract

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

Almost every contract dispute a board ends up in could have been prevented in the ten minutes before signature. The questions below are not a legal review and they do not replace one. They are the minimum a board or manager should be able to answer out loud, from the face of the document, before a motion to approve is made. If a question cannot be answered, that is the reason to hold the vote over to the next meeting.

Question one: who is actually signing, and is it the company that gave you the price

Boards routinely approve a proposal from one company and then sign an agreement with a different one. The proposal comes in on the letterhead of a regional brand; the contract names a limited liability company you have never heard of, sometimes formed two months ago, sometimes with no assets. If the work goes wrong, the entity you sued is the one on the signature page, not the brand on the truck.

Read the first paragraph and the signature block together. The name in the first paragraph, the name above the signature, the name on the certificate of insurance and the name on the license should all be the same legal entity, spelled the same way, with the same suffix. A parent company, a franchisor or a national account manager that is not a party to the contract owes your association nothing.

Check the entity on the Division of Corporations record at sunbiz.org while you are sitting there: that it is active, that it has existed longer than the warranty you are being offered, and that the person signing is an officer, manager or authorized agent rather than a salesperson. Confirm the association is identified correctly too. Its legal name is the one on the articles of incorporation, not the name on the entrance sign, and a master association, a sub-association and a recreation corporation are separate legal persons.

Question two: is the company licensed for this scope of work

Licensure is scope-specific. A general contractor's license does not cover roofing; a roofing license does not cover structural repair; a pool contractor is not an electrician. What matters is whether the entity holds, or has a qualifying agent who holds, the license that covers the work in the contract.

The consequence in Florida construction work is unusually severe. Under § 489.128, a contract entered into by an unlicensed contractor is unenforceable in law or in equity by that contractor, and no lien or bond claim exists in the unlicensed contractor's favor. Licensure is measured at the effective date of the contract, the date the last party signed it, or the first date labor, services or materials were furnished. A license obtained later does not repair the defect.

That rule protects the association, but it is a poor plan. An unlicensed contractor who cannot enforce the contract also cannot be made to honor a warranty, usually carries no meaningful insurance, and is rarely still in business when the problem surfaces. Verify the license number on the Department of Business and Professional Regulation site before the meeting, and write the number into the contract.

For management, licensure sits in a different chapter. A community association manager is licensed under Chapter 468, Part VIII, and a firm managing associations of more than 10 units or with budgets over $100,000 needs its own firm license. Our guide to reviewing a management agreement covers what that means in practice.

Question three: is the insurance real, and does it name the association

A certificate of insurance is evidence, not coverage, and it is evidence only of what it says on the day it was issued. Boards accept certificates that show a policy expiring in six weeks, name no additional insured, and carry limits below the value of the equipment the vendor will be driving across the property.

The four things to look for:

• Named insured matches the contracting entity exactly.
• Additional insured status for the association on the general liability policy, and ideally a copy of the endorsement rather than the certificate box being ticked.
• Workers' compensation coverage or a valid exemption certificate for every officer claiming one. Under § 440.10(1)(b), a contractor that sublets work is liable for compensation to the subcontractor's employees unless the subcontractor has secured coverage, and § 440.10(1)(c) requires the contractor to obtain that evidence. An association that hires an uninsured crew directly has no such shield.
• Limits and terms that survive the contract: a requirement that coverage be maintained for the full term, that the association be notified of cancellation, and, for construction work, that completed operations coverage continue past final payment.

Insurance requirements and indemnity language work together, and a board that gets one right and the other wrong is usually no better off. Our discussion of insurance and indemnification in association contracts takes that pairing apart.

Question four: did the statute require you to bid it

All three chapters require covered contracts to be in writing and require competitive bids above a percentage of the budget. The percentages are not the same, and the exceptions are close but not identical.

Two traps sit in that table. The first is the denominator: the threshold runs on the total annual budget including reserves, so a large reserve line makes the bidding threshold higher than boards expect, and a board that computes it on the operating budget alone bids things it did not have to bid. The second is the professional-services exception. It covers the engineer's or architect's contract, not the contractor's, so a design professional can be hired on relationship and reputation while the construction work above the threshold still has to go out.

Question five: does anyone on your side have an interest in this vendor

Conflicts are disclosed before the vote or they are a problem afterward. In a condominium, § 718.3027 requires a director or officer to disclose to the board any activity that may reasonably be construed to be a conflict of interest, including through a relative within the third degree of consanguinity by blood or marriage. The proposed activity must be listed on the meeting agenda with the contracts and transactional documents attached, and approval requires an affirmative vote of two-thirds of all other directors present. The contract must then be disclosed at the next members meeting, where the members may cancel it by majority vote of those present.

A homeowners association reaches a similar place by a different route. Section 720.3033(2) requires compliance with § 617.0832, entry of the disclosure in the written minutes, an affirmative vote of two-thirds of the directors present, disclosure to the members at their next meeting, and a member cancellation right. Cooperatives have no conflict-of-interest section of their own in Chapter 719; the not-for-profit corporation standard in § 617.0832 supplies the rule.

The manager's conflicts are separate and are governed by § 468.4335, which carries the sharpest remedy in this area: a violation makes the management contract voidable and lets the association terminate it owing only the reasonable value of services rendered, with no termination fee, liquidated damages or penalty. More detail is in our guide to director and officer conflicts of interest.

Question six: how long is it, and how does it end

Open the contract to the term clause and read it with a calendar in front of you. You want four dates and one number: when it starts, when the initial term ends, the last day to give notice of non-renewal, how long each renewal term runs, and how many days of notice the association must give.

The auto-renewal clause is where boards lose years. A three-year term that renews for successive three-year terms unless cancelled 90 days before the anniversary will renew, because the board that signed it is not the board sitting when the notice window opens. Florida's automatic renewal disclosure statute, § 501.165, is of limited help here: it defines a consumer as an individual, and an association is a corporation, so a board should not assume the statute protects it.

Ask three questions of every termination clause. Can the association terminate for cause, and does the vendor get a cure period first? Can the association terminate for convenience, on what notice, and at what cost? And what does the association owe on termination beyond work already performed? A termination-for-convenience right that costs a year of fees is not a termination right. We cover the mechanics in renewing and terminating association contracts.

Question seven: what happens if they do not perform

Most association contracts describe what the vendor will do and are silent on what happens when it does not. Termination is the only remedy in the document, and termination is the remedy a board is least willing to use in July when the grass is growing and nobody else can start for six weeks.

What you want instead is a ladder of consequences short of ending the agreement:

1. Written notice of deficiency with a short, specific cure period, counted in days rather than described as reasonable.
2. A deduction from the next invoice for services not performed, stated as a formula rather than left to negotiation.
3. The right to have the work done by someone else and to charge the difference back. Condominium management contracts get a version of this by statute at § 718.3025(2); every other contract needs it written in.
4. Termination for repeated deficiency after a stated number of notices in a stated period, without the notice-and-cure cycle starting over each time.

One drafting point matters more than the rest: the performance standard has to be measurable. "Maintain the landscape in a first-class condition" cannot be enforced. A mowing frequency, a mulch depth, a response time and a named site supervisor can be.

Question eight: who indemnifies whom, and has counsel seen it

Turn to the indemnity clause and read which way it points. Vendor forms frequently require the association to indemnify the vendor, including against claims arising from the vendor's own negligence, and boards sign them because the paragraph is dense and sits on page four.

For construction-type work there is a statutory guardrail. Section 725.06(1) applies to any agreement for the construction, alteration, repair or demolition of a building, structure, appurtenance or appliance, and makes an indemnification provision void and unenforceable unless the contract contains a monetary limitation on the indemnity that bears a reasonable commercial relationship to the contract. Where the indemnity runs to the owner of the property from a party in privity with the owner, that limitation may not be less than $1 million per occurrence unless the parties otherwise agree. A routine service agreement for mowing or cleaning is generally outside that section, so the protection there has to be negotiated.

The last question is the easiest and the one most often skipped. Has counsel seen this document, in this version, with these exhibits? Not a similar contract last year, and not the vendor's assurance that it is their standard form. Legal review of a recurring service agreement is inexpensive compared to a three-year term the association cannot exit, and the review should happen before the motion, not after the signature. Our contract management practice exists for exactly this step.

Whatever the board decides, record the basis for the decision. The minutes should show that bids were obtained or that an exception applied, that the license and insurance were verified, that any conflict was disclosed and how the vote went, and that counsel reviewed the document. Bids received are official records in their own right, and a board that can produce the file two years later is in a materially different position than one that cannot.

Contact Hamilton Mikes

Hamilton Mikes reviews vendor, management and construction agreements for condominium, cooperative and homeowners association boards across Lee, Collier and Charlotte Counties, usually within the meeting cycle in which the board needs an answer. Call 239-594-7227 or visit our Contract Management page.