Contracting for Condominium Work: Bidding, Licensure, Lien Waivers and Conflicts

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

Most of what goes wrong on a condominium project was decided before anyone picked up a tool. The bid requirement was misread, the license was never checked, the insurance certificate was filed without the endorsements, the change order clause was not enforced, and lien waivers were collected from the general contractor but from nobody else. Each of those is a paperwork failure with a six figure consequence, and each is fixable in the week before signing.

Put it in writing, and know when bidding is required

Section 718.3026 is the starting point. Contracts for the purchase, lease or renting of materials or equipment, and contracts for services, that are not to be fully performed within one year must be in writing. When a contract requires payment exceeding 5 percent of the total annual budget of the association, including reserves, the association must obtain competitive bids, though it need not accept the lowest.

Work the threshold correctly. It is measured against the total annual budget including reserves, not the operating budget, so an association with a large reserve contribution has a higher threshold than its operating numbers suggest. It is measured on the aggregate the contract requires, so splitting a project across three purchase orders to stay under the line does not work.

Note what the statute does not say. It does not say how many bids are required, and prescribes no bid form or sealed bid procedure. Three bids is a sound convention, not a rule. An association of 10 or fewer units may opt out of section 718.3026 by a two-thirds vote of the unit owners. Everyone else should keep the bids and the reason for the selection in the official records; section 718.111(12) makes bids official records. Our guide on vendor contract review covers a bidding policy.

The exceptions, and the one boards misread

Section 718.3026(2) lists the exceptions.

• (2)(a) Contracts with employees, and contracts for attorney, accountant, architect, community association manager, timeshare management firm, engineering and landscape architect services.
• (2)(b) An emergency, where immediate action is necessary to protect the condominium property or the health, safety or welfare of the owners.
• (2)(c) Where the business entity is the only source of supply within the county.
• (2)(d) A cross reference requiring maintenance or management service providers to comply with section 718.3025.

Handle the emergency exception carefully. It is not a blanket waiver for the six months after a hurricane. Document what the emergency was, why immediate action was necessary, and bid whatever can still be bid. Our guide on post-storm restoration contracts covers the terms that matter.

Verify the license before you sign, not after

Construction contracting in Florida is licensed under Chapter 489, Part I. Verify three things and keep the printout: that the license is active, that the category covers the actual scope, and that the licensed qualifying agent qualifies the entity you are contracting with. That third point is where associations lose. A qualifier's license attached to one company does not automatically reach a differently named LLC on the signature page.

Section 489.128(1) provides that contracts entered into on or after October 1, 1990 by an unlicensed contractor are unenforceable in law or in equity by the unlicensed contractor. An individual is unlicensed without a license required by Part I for the scope of the work; a business organization is unlicensed without a primary or secondary qualifying agent for that scope. A missing local business tax receipt under Chapter 205 does not by itself make a contractor unlicensed. Status is fixed at the effective date of the original contract.

The unenforceability runs one direction. Section 489.128(3) preserves the rights of parties other than the unlicensed contractor to enforce contract, lien or bond remedies, and the obligations of a surety, so a subcontractor's lien does not disappear because the general was unlicensed. Meanwhile the association still owns the work, has no meaningful warranty, and may face an insurer's questions about unpermitted work.

Insurance and indemnity

Set the insurance requirements in the contract, and require the policy endorsements rather than a certificate alone. A certificate is evidence, not coverage.

• Commercial general liability on an occurrence form, with limits scaled to the exposure rather than the contract price, naming the association as additional insured on a primary and non-contributory basis for ongoing and completed operations.
• Workers' compensation with a waiver of subrogation in favor of the association, and a written explanation of any officer exemption. An exempt officer is not covered.
• Professional liability where the contractor carries design responsibility, common on railings, anchors, window systems and waterproofing details.
• Contractor's pollution liability for mold remediation and anything touching lead or asbestos.
• Builder's risk on a substantial restoration, stating who buys it and who holds the deductible.

Require certificates and endorsements before mobilization, and completed operations coverage for a stated period after final completion so the policy still exists when a defect appears. On indemnity, section 725.06(1) is a trap: an indemnification provision in a construction contract is void and unenforceable unless the contract contains a monetary limitation on the extent of the indemnification that bears a reasonable commercial relationship to the contract, and for a party in privity with the property owner the limitation must not be less than $1 million per occurrence unless otherwise agreed. Our guide on insurance and indemnification in association contracts covers the language.

Lien waivers and the risk of paying twice

This is the exposure that surprises boards most. The association pays the general contractor in full. The general does not pay the drywall supplier. The supplier, who served a timely notice to owner, records a lien, and the association pays again to clear it.

The mechanics are in Chapter 713, Part I. A lienor not in privity with the owner must serve a notice to owner before beginning, or not later than 45 days after beginning, to furnish labor, services or materials. Section 713.06(2)(a). A claim of lien must be recorded no later than 90 days after that lienor's final furnishing. Section 713.08(5). Under section 718.121(1), no lien is valid against the condominium property as a whole without unanimous owner consent, and work furnished to the common elements when duly authorized by the association may be the basis for a lien against all parcels in the proportions in which the owners are liable for common expenses.

1. Log every notice to owner when it arrives. It is the association's map of who can lien the property.
2. Require lien waivers with every progress payment, in the statutory forms at section 713.20(4) for progress payments and section 713.20(5) for final payment, from the general contractor and from every lienor who served a notice.
3. Under section 713.20(2) a right to claim a lien may not be waived in advance, and may be waived only to the extent of work actually furnished.
4. Obtain the contractor's final payment affidavit under section 713.06(3)(d) before releasing final payment and retainage.
5. Consider a payment bond under section 713.23 on a large project. It moves the lien exposure to a surety.

Scope, change orders and retainage

A contract that does not say precisely what is being built will be renegotiated in the field on the contractor's terms. Attach the engineer's specifications and incorporate them by reference, state the order of precedence among the contract documents, and define substantial completion and final completion separately.

Because condominium work happens in an occupied building, the contract must also govern working hours, notice to owners before a unit or balcony is disturbed, dust and noise control, protection of finishes, staging and parking, and restoration of landscaping. Our guide on major project oversight covers administering this during the job.

Change orders are where budgets fail. Say in the contract that no change in scope, price or schedule is effective unless it is in a written change order signed by a named association representative, and set a dollar limit on that person's authority. Then, at bid time, require a schedule of unit prices for the quantities that always grow: slab and ceiling spalling repair, crack repair, replacement steel, post-tension tendons.

Retainage protects the punch list. A common private structure is 10 percent held from each progress payment, reduced to 5 percent at substantial completion, with the balance released after punch list closeout. Florida's statutory 5 percent retainage cap applies to public entity contracts, not to a private association contract, so retainage here is negotiated.

Warranty and the correction period

Three different things get called a warranty, and a contract should address all three separately.

1. The contractor's warranty of labor and workmanship, for a stated period running from final completion, with a stated response time and an obligation to repair rather than to credit.
2. Manufacturer warranties on materials: coatings, sealants, roofing systems, windows and doors. These are typically voided by improper installation, substitution of components, or skipping the manufacturer's inspection. Require the manufacturer's field inspections and delivery of the registered warranty certificate as a condition of final payment.
3. A correction period, obligating the contractor to return and correct nonconforming work found within a stated period. State that it does not limit the association's other rights; contractors' forms often say the opposite.

Behind all of it sit the statutory deadlines. Florida imposes a four year limitations period for an action founded on the design, planning or construction of an improvement to real property, and a seven year statute of repose running from the earliest of a temporary certificate of occupancy, a certificate of occupancy, a certificate of completion, or abandonment. Section 95.11. See our guide on construction defect claims.

Conflicts of interest: directors and managers

Directors and officers. Section 718.3027 requires a director or officer, or a relative within three degrees of consanguinity by blood or marriage, to disclose to the board any activity that may reasonably be construed to be a conflict of interest. The activity must be listed on the meeting agenda, with all related contracts attached. Approval requires an affirmative vote of two-thirds of all other directors present, and the conflicted director must leave during the discussion and the vote. The transaction must be disclosed at the next members meeting, where the members may cancel it by a majority vote of those present. A contract entered into without the required disclosure is voidable. Our guide on director conflicts of interest covers the mechanics.

Managers and management firms. Section 468.4335, not Chapter 718, is the conflicts provision for community association managers. A manager or firm must disclose any activity that may reasonably be construed to be a conflict, and a conflict is presumed where the manager proposes to provide services other than management services or has an interest in an entity doing business with the association. Where the goods or services exceed $2,500, the association must solicit multiple bids from other third party providers, and approval requires a two-thirds vote of all directors present. If the board finds a violation, the management contract is voidable and terminable with no termination fee.

In practice, the manager who recommends a preferred roofer and has an interest in that company is inside section 468.4335 whether or not anyone uses the word conflict.

What to insist on before the board signs

1. License verification for the correct category, matched to the exact contracting entity.
2. Certificates plus the additional insured, primary and non-contributory, and waiver of subrogation endorsements.
3. A written scope with the engineer's specifications attached and incorporated.
4. Start, substantial completion and final completion dates, and a remedy for delay.
5. A unit price schedule, and a change order clause naming the authorized representative and that person's dollar limit.
6. A payment schedule tied to measurable progress, with retainage and the conditions for its release.
7. A lien waiver protocol for every draw, the final affidavit requirement, and a decision on a payment bond.
8. Warranty terms and closeout deliverables tied to final payment: as-builts, warranty certificates, final lien waivers, permit closeouts.
9. An indemnity clause with the monetary limitation section 725.06 requires.
10. Termination for cause with notice and cure, and for convenience with a defined payment for work performed.
11. Florida law, venue in the county where the condominium is located, and a prevailing party attorney fee provision.
12. Confirmation that the contract was approved at a properly noticed board meeting, with the bids in the official records.

None of this requires the board to become expert in construction. It requires the board to refuse to sign a contractor's one page proposal for a seven figure job. That proposal is written for the contractor.

Contact Hamilton Mikes

Hamilton Mikes drafts and negotiates construction, restoration and vendor contracts for condominium associations throughout Southwest Florida, and reviews bidding, licensure and conflict issues before a board signs. Call 239-594-7227 or visit our Construction page.