The agreements that put people on your property to run programs for your residents are the ones boards sign with the least care and the most exposure. A fitness instructor teaching in your clubhouse, a tennis professional billing residents directly, a pool company holding your Department of Health permit, a caterer serving 200 people on New Year's Eve, a summer camp supervising other people's children. Each of them raises the same seven questions, and Chapter 720 answers only one of them.
Know which of three agreements you are signing
Amenity arrangements come in three shapes. The association pays the vendor, as with a pool management company. The vendor pays the association, as with a food and beverage operator or a tennis professional buying court access. Or nobody pays anybody, because the vendor gets access to the facilities and bills residents directly.
Identify the parties correctly. The association is the contracting party, not the manager and not the amenity committee. If a master association owns the clubhouse and a sub-association runs the program, say which entity is bound.
Independent contractor or employee, and why it matters
This question is decided by the facts of the relationship, not by the word the contract uses, and it is the one most likely to cost real money.
For Florida workers' compensation, section 440.02(18) defines "employee," and section 440.02(18)(d)1. sets the independent contractor test outside construction: at least four of six listed criteria, including a separate business, a federal employer identification number, compensation paid to a business rather than an individual, the ability to work for others, and compensation on a competitive-bid or per-job basis. Section 440.02(20)(b)2. requires coverage in private employment with four or more employees, and one or more in construction. The IRS applies a common-law control analysis and the Fair Labor Standards Act an economic reality test. None gives weight to a recital of intent.
The pattern that causes trouble: the board hires an instructor, sets the schedule, supplies the pool and equipment, sets the resident fee, pays hourly, and the instructor teaches nowhere else. The bill arrives as payroll taxes, a reemployment assessment, an uninsured injury claim, or an overtime demand.
Contract with an entity rather than an individual where possible, and let the vendor set the schedule and rate within limits you define rather than directing the work. Require a workers' compensation certificate or a valid Florida exemption, recognizing that a sole proprietor with no employees is generally not required to carry coverage and that the gap lands somewhere. An association is also generally not vicariously liable for a true contractor's negligence, though nondelegable duties and negligent selection are real exceptions.
Licensure: who needs one, and who does not
The license usually has to be in place before the first class or the first meal, and operating without one is the vendor's violation that becomes the association's problem.
| Program | Licensing regime | Who holds it |
|---|---|---|
| Pool operation | Ch. 514, Fla. Stat.; Rule 64E-9, F.A.C. | Association usually holds the permit; vendor supplies the operator |
| Food and beverage | Ch. 509, Fla. Stat. | The operator, ordinarily; check section 509.013(5)(b) |
| Alcoholic beverages | Ch. 561 and Ch. 565, Fla. Stat. | The licensed caterer or the club |
| Association management | Ch. 468, Part VIII, Fla. Stat. | The manager and the management firm |
| Tennis, golf, fitness instruction | Not licensed by the State of Florida | Certification is a contract requirement, not a legal one |
A pool serving five or more living units is generally a public pool under section 514.011(2), which pulls it into Department of Health permitting, water quality and recordkeeping requirements. The contract should say who holds the permit, who keeps the daily logs and who pays a fine.
Section 509.013(5) defines a "public food service establishment," and the exclusions at section 509.013(5)(b) include an eating place maintained by a church or a religious, nonprofit fraternal or nonprofit civic organization for its members. Whether an association is a "nonprofit civic organization" is not obvious, and it should be resolved before you open a clubhouse grill. Where no license exists, the contract does the work: require current certification, current CPR and AED certification, and termination on lapse.
Insurance and indemnity
Set insurance requirements to the exposure, not to what the vendor carries. Require general liability at limits your broker recommends; abuse and molestation coverage for any program involving minors, because standard forms commonly exclude it; professional liability for instructors; automobile liability if anyone is transported; workers' compensation or a valid exemption; and liquor liability where alcohol is served.
Then ask for the right proof. A certificate of insurance shows a policy existed on the day it was issued. It is not coverage. Additional insured status comes from an endorsement, so ask for the endorsement and note the form number; the common ones are CG 20 10 and CG 20 37. Require coverage that is primary and non-contributory, require a waiver of subrogation, and track expiration dates.
On indemnity, what you want is that the vendor indemnifies, defends and holds harmless the association, its directors, officers, members and manager from claims arising out of the vendor's services. What you often get is a mutual indemnity, which gives back the protection you just obtained; one limited to gross negligence, which excludes the ordinary negligence behind almost every claim; one capped at the contract price; or one with no defense obligation.
One point of Florida law is regularly misapplied here. Section 725.06 limits indemnification provisions and requires a monetary limitation bearing a reasonable commercial relationship to the contract, but by its terms it applies to agreements for construction, alteration, repair or demolition of a building, structure, appurtenance or appliance. An amenity services agreement is not one. And an indemnity is only as good as the party giving it, which is why insurance is the real protection. Our guide to insurance and indemnification provisions goes through the language.
Background screening where minors are involved
Section 402.302(2) defines a "child care facility" and excludes, at paragraph (b), summer camps having children in full-time residence, and at paragraph (c), summer day camps. A community day camp run out of your clubhouse is not a licensed child care facility, so the screening requirements attaching to licensed child care do not reach it. No state agency will impose screening on your camp vendor; if the association wants it, the contract must require it.
The benchmark to write in is a level 2 screening under Chapter 435. Section 435.04(1)(a) describes fingerprint-based state criminal history checks through the Department of Law Enforcement, national checks through the FBI, and sexual predator and offender registry checks in every state of residence for the preceding five years. Section 435.04(2) lists the disqualifying offenses.
Raise one wrinkle with counsel early: access to fingerprint-based checks generally runs through a qualified entity process, so whether the association can obtain a true level 2 in its own name should be settled before drafting. Meanwhile, require the vendor to certify in writing that everyone with contact with minors has passed a level 2 or equivalent screening within five years.
Screening is necessary and not sufficient, because most people who harm children have no record when screened. The operational controls are what prevent harm:
- A two-adult rule, with no one-on-one unobserved contact between an adult and a child.
- Open sightlines and open doors; no activity out of sight of a common space.
- Sign-in and sign-out identifying the authorized adult.
- A written reporting protocol. Section 39.201 requires any person who knows or has reasonable cause to suspect child abuse or neglect to report it to the central abuse hotline.
- No vendor staff transporting or privately communicating with a child outside the program.
- All of it written into the contract as vendor obligations rather than kept in a policy binder.
Revenue shares, exclusivity and use of your facilities
A flat license fee is the easiest arrangement to administer. A percentage of gross is only as reliable as the reporting behind it, so require a monthly statement, define gross receipts so it excludes nothing you would consider revenue, take the right to inspect the vendor's books, and provide for an annual true-up.
Answer two tax questions before signing. Section 212.02(1) defines taxable "admissions" to include all dues and fees paid to private and membership clubs providing recreational or physical fitness facilities, naming golf, tennis, swimming, boating, exercise and fitness facilities. And income from non-member activity can affect the association's federal tax position, which for many associations rests on Internal Revenue Code section 528 and the rules behind Form 1120-H.
A vendor asking to be the only trainer, pro or caterer on the property is asking for something of real value. Price it, put an end date on it, and read the documents first: if owners may bring their own trainer, an exclusivity grant changes owners' use rights in a way the board may not have power to make. Our guide to amenity guest policies covers that analysis.
Term, termination and renewal
Keep the initial term short: one year with an option to renew is almost always right. on 30 days' written notice, in the association's favor, is the most valuable clause in an amenity vendor agreement, because it resolves the problems the board could not foresee without requiring proof of a breach. Expect the vendor to want it mutual; that is far better than none. Add termination for cause for a lapse in insurance, certification or licensure, a failed screening, or conduct that endangers residents.
Require affirmative written renewal by board action rather than automatic renewal. There is a statutory reason to want the 30-day cancellation right too: section 720.3055(2)(a)2. provides that a contract awarded under the competitive bid procedures may be renewed without rebidding if it lets the board cancel on 30 days' notice. The same paragraph permits a bid-let manager contract to run up to three years.
One further provision belongs in front of the board before it signs a long amenity contract. Section 720.309(2)(a) provides that a contract entered into by the board may be canceled by a majority of the voting interests present at the next regular or special meeting. The section is headed as dealing with agreements entered into by the association, and subsection (1) addresses contracts made before turnover, so the scope is genuinely debatable. Our guide to contract renewal and termination covers the mechanics.
Competitive bidding under section 720.3055
Section 720.3055(1) requires that all contracts for the provision of services, and any contract not fully performed within one year for the purchase, lease or rental of materials or equipment, be in writing. If a contract requires payment by the association exceeding 10 percent of the total annual budget, including reserves, the association must obtain competitive bids. It need not accept the lowest bid.
- The denominator includes reserves. A $58,000 pool contract in a community with a $480,000 operating budget and $140,000 in reserves is measured against $620,000. Do that arithmetic before the board votes.
- The trigger is payment by the association. Where the vendor pays and the association pays nothing, the bid requirement is not triggered by its terms, though the writing requirement still reaches all service contracts.
- The exemption list is short. Section 720.3055(2)(a)1. exempts contracts with employees and contracts for attorney, accountant, architect, community association manager, engineering and landscape architect services. Instructors, pool companies, caterers and camps are not on it.
The other carve-outs are narrow: section 720.3055(2)(b) for an emergency, section 720.3055(2)(c) where the entity is the only source of supply within the county, and section 720.3055(2)(a)2. for contracts executed before October 1, 2004 and their renewals. That paragraph also lets an association whose documents provide for competitive bidding follow those provisions if they are not less stringent.
Two habits make this painless. Bid the same scope, using a one-page scope of services and responses in one format. And document the process in the minutes. Our vendor contract review checklist covers the rest.
Frequently Asked Questions About Amenity Vendor Agreements
Do we have to competitively bid a fitness instructor contract?
Only if the association's payment under it exceeds 10 percent of the total annual budget including reserves. Section 720.3055(2)(a)1. exempts employees, attorneys, accountants, architects, community association managers, engineers and landscape architects. Instructors are not on that list, so the only question is the dollar threshold. If the instructor bills residents directly and the association pays nothing, the bid requirement is not triggered, but the contract still must be in writing.
Our tennis pro says he is an independent contractor. Is that enough?
No. The label in the contract does not control. Florida's workers' compensation test in section 440.02(18)(d)1. requires that at least four of six criteria be met for non-construction work, and the IRS and the Fair Labor Standards Act apply different tests again. Look at who sets the schedule, who supplies the equipment, who sets the rate, and whether the person works for others.
Is a certificate of insurance enough protection?
No. A certificate shows a policy existed when it was issued; it is not coverage and it confers no rights. Additional insured status comes from an endorsement to the vendor's policy. Ask for the endorsement and note the form number, require that the coverage be primary and non-contributory, require a waiver of subrogation, and track the expiration date.
Does Florida require background screening for our summer camp staff?
Not automatically. Section 402.302(2)(c) excludes summer day camps from the definition of a child care facility, so the screening requirements that apply to licensed child care do not apply. If the association wants screening, the contract must require it. Use the level 2 standard in section 435.04 as the benchmark and verify the results rather than accepting an assurance.
Does section 725.06 limit the indemnity we can ask for?
Not in an amenity services contract. Section 725.06 applies to agreements for or in connection with the construction, alteration, repair or demolition of a building, structure, appurtenance or appliance. A contract for instruction, pool management, food service or a camp is not a construction contract, so the statute's monetary-limitation requirement does not reach it.
Can the members cancel a contract the board signed?
Possibly. Section 720.309(2)(a) provides that a contract entered into by the board may be canceled by a majority of the voting interests present at the next regular or special meeting. The section is headed as addressing agreements entered into by the association and subsection (1) deals with pre-turnover contracts, so the scope is debatable. Raise it with counsel before committing the association to a long term.
Do we need a food service license for a clubhouse grill?
Probably the operator does. Section 509.013(5) defines a public food service establishment and section 509.013(5)(b) lists the exclusions, which include an eating place maintained by a church or a religious, nonprofit fraternal or nonprofit civic organization for its members. Whether a homeowners' association fits that description is not clear, and the question should be answered before the grill opens.
Contact Hamilton Mikes
Hamilton Mikes drafts and negotiates amenity program agreements for homeowners' associations, master associations and club communities in Lee, Collier and Charlotte Counties, and reviews insurance, indemnity and screening provisions before the board signs. Call 239-594-7227 or visit our Contract Management page.
Statutes and authorities referenced
- § 720.3055, Fla. Stat. (contracts for products and services; writing requirement; competitive bids; exceptions)
- § 720.3055(1), Fla. Stat. (writing requirement; 10 percent of total annual budget including reserves)
- § 720.3055(2)(a)1., Fla. Stat. (exempt contracts: employees, attorney, accountant, architect, community association manager, engineering, landscape architect)
- § 720.3055(2)(a)2., Fla. Stat. (pre-October 1, 2004 contracts; renewal without rebidding with 30-day cancellation; three-year manager contracts; franchise agreements; stricter document provisions)
- § 720.3055(2)(b), (2)(c), (2)(d), Fla. Stat. (emergency; sole source in the county; cross-reference to § 720.309)
- § 720.309, Fla. Stat. (agreements entered into by the association; cancellation by the voting interests at (2)(a))
- § 440.02(18), Fla. Stat. (definition of employee; independent contractor criteria at (18)(d)1.)
- § 440.02(20)(b)2., Fla. Stat. (four or more employees in private employment; one or more in construction)
- § 402.302(2)(b), (2)(c), Fla. Stat. (summer camps and summer day camps excluded from the definition of child care facility)
- § 435.04, Fla. Stat. (level 2 screening standards; fingerprinting, FDLE and FBI checks, registry searches at (1)(a); disqualifying offenses at (2))
- § 39.201, Fla. Stat. (mandatory reporting of child abuse, abandonment or neglect)
- § 514.011(2), Fla. Stat., and Ch. 514, Fla. Stat. (public swimming pools; Department of Health regulation)
- § 509.013(5), Fla. Stat. (definition of public food service establishment; exclusions at (5)(b)); Ch. 509, Fla. Stat.
- Ch. 561, Ch. 565, Fla. Stat. (alcoholic beverage licensing)
- Ch. 480, Fla. Stat. (massage practice; establishment licensure)
- Ch. 468, Part VIII, Fla. Stat. (community association manager licensing)
- § 725.06, Fla. Stat. (indemnification in construction contracts)
- § 212.02(1), Fla. Stat. (definition of admissions; dues and fees paid to private and membership clubs)
- 26 U.S.C. § 528 (homeowners association taxation; Form 1120-H)
- 29 U.S.C. § 201 et seq. (Fair Labor Standards Act)