Florida Statutes 718.3026: Condo Contracts, 5% Bid Rule

Quick Answer

Section 718.3026 requires a Florida condominium association's contracts for services, and certain equipment or material contracts, to be in writing. If a contract would cost the association more than 5 percent of its total annual budget, including reserves, the association must obtain competitive bids, though it need not take the lowest.

The section exempts contracts with employees and for attorney, accountant, architect, community association manager, timeshare management, engineering and landscape architect services, plus emergencies and sole-source suppliers.

At a Glance

What the Law Says

Writing requirement

Subsection (1) says contracts "for the purchase, lease, or renting of materials or equipment to be used by the association," any such contract "not to be fully performed within 1 year," and "all contracts for the provision of services, shall be in writing."

Bidding threshold

If a contract "requires payment by the association on behalf of any condominium operated by the association in the aggregate that exceeds 5 percent of the total annual budget of the association, including reserves, the association shall obtain competitive bids for the materials, equipment, or services. Nothing contained herein shall be construed to require the association to accept the lowest bid."

Exceptions in subsection (2)

• Contracts with employees, and for attorney, accountant, architect, community association manager, timeshare management firm, engineering and landscape architect services.
• Nothing limits the ability to obtain needed products and services in an emergency.
• The section does not apply if the business entity is "the only source of supply within the county serving the association."
• A contractor providing maintenance or management services must still comply with section 718.3025 (the written-contract content rules).

What This Means in Practice

Boards

Do the arithmetic against the full annual budget, reserves included, and compare the contract's payments against that total. Our reading: because the test counts payment "in the aggregate," splitting a project across several purchase orders to stay under 5 percent is likely to draw scrutiny.

The statute does not say how many bids are required, what form they take, or who must evaluate them. A written bid file with scope, quotes and a short record of why a vendor was chosen is a practical way to show the process was followed. The lowest bid need not win.

Owners

Owners may be able to request the contracts and bid files as official records (our reading; confirm against section 718.111). The statute names no penalty, so remedies for a missing bid are likely to be argued under other provisions such as director duties and section 718.303. Open question for counsel.

Managers and professionals

A community association manager contract is exempt from bidding, but still must be in writing as a contract for services, and the manager licensing and contract rules in Chapter 468 apply.

Timeline

Related Florida Law

• Chapter 468 Part VIII on manager contracts.
• Section 718.3027 on conflicts of interest.
• Section 718.111 on records and finances.
• Chapter 718 overview.

Board Checklist

• Compute 5 percent of the total annual budget including reserves each year.
• Put every service contract in writing.
• Solicit multiple bids on the same scope for contracts over the threshold.
• Keep the bid file and the board's decision record.
• Document any emergency or sole-source exception at the time.
• Screen vendors for conflicts under section 718.3027 before award.

Frequently Asked Questions

When must a condo association take bids?

When a contract would require payments exceeding 5 percent of the total annual budget, including reserves.

Must the board choose the lowest bid?

No. The section states that it does not require the association to accept the lowest bid.

Is a management contract subject to bidding?

No. Community association manager contracts are listed as exempt.

Can a small condo opt out?

Associations with 10 or fewer units may opt out if two-thirds of the unit owners vote to do so.

Are emergency repairs exempt?

Nothing in the section limits obtaining needed products and services in an emergency.

Does this apply to HOAs?

No. It is in Chapter 718, which governs condominiums.

Where This Comes From

We read the full 2026 text and history line of section 718.3026 on the Florida Legislature's Online Sunshine site (section 718.3026). Quotations are from the statute text. We did not read section 718.3025 or the session laws.

Where We Stand

Our position: we support the bid requirement. Bids protect boards as much as owners: a documented comparison is the best answer to a later complaint about a vendor choice. The practical risk is paperwork, not price. A practical tip: set a standard bid packet with identical scope for all vendors and keep the comparison in the records. This is Association Property Managers' operating view as a management company, separate from the legal summary above, and it is not legal advice.

How APM Helps

Association Property Managers provides remote HOA and condo management for associations in Florida, starting at a flat $99/month per community with no per-door fees or long-term contracts. See remote management in Florida, browse every Florida state-law guide, or request a free proposal, delivered within three business days. Laws and licensing rules differ by state, and we confirm the requirements for Florida when we build your proposal.

Legal disclaimer: This article is general information, not legal advice. Laws change and associations differ. Confirm the current statute text and how it applies to your governing documents with a licensed Florida attorney before acting.