HOAleader.com - Tip of the Week - March 17, 2017
Published: Fri, 03/17/17
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Bid Shopping at Your HOA: Why It Might Not Be Wise
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In this week’s tip, we weigh a reader’s question about whether it’s OK to play vendors off against each other during the bidding process. Our reader wonders if it’s illegal at worst or unethical at best—or maybe even just fine.
Let’s start with the easy answer. This isn’t against the law.
“It’s legal unless the bidding process specifically says these are sealed bids and also states to vendors, ‘Give us your best offer, and we’ll take the best offer,’” states Robert E. Ducharme, founder of Ducharme Law in Stratham, N.H., who specializes in representing community associations. “If the parameters of the bid specs had said that, then the board can’t go back and pick the other bidder.”
Nor is the association a government entity, which may have to follow certain bidding procedures. “This isn’t a municipality or state, which often have to go through procurement or sealed bids,” notes Stephen Marcus, a partner at Marcus, Errico, Emmer, Brooks in Braintree, which represents about 4,000 associations, mostly condos, in Massachusetts, New Hampshire, and Rhode Island. “If your state does have to do through that, it doesn’t mean an association in that state has to.
“Some might argue this practice spoils the purpose of the law if you share bids with other bidders,” adds Marcus. “But I doubt that public bidding was required for this association.”
A practice like this is actually pretty common. “I don’t see that as a problem at all,” says David C. Swedelson, the principal at Swedelson & Gottlieb, a law firm that represents associations in the Los Angeles area. “I see associations do this all the time.
“They say to a contractor, ‘We like your bid, but your price is higher than others. If you bring it down, you can have the job,’” explains Swedelson. “Because it’s not just the price that’s important when bidding. The board may like one contractor better than another. And haven’t you ever gone into somewhere, like a car dealership, and said, ‘I can get a better deal somewhere else?’”
Legal though it may be, this tactic can be counterproductive. Find out why in our new article: https://www.hoaleader.com/members/2519.cfm
Best regards,
Matt Humphrey
President
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Recent articles posted at HOAleader.com:
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The Ethics of HOA Boards Playing Bidders Off Against Each Other
An HOAleader.com reader writes, "I'm new to my HOA board of directors and have a concern about how the work is awarded. It appears to be common practice to receive three bids, which is great and standard.
Click here to read full article:
https://www.hoaleader.com/members/Ethics-HOA-Boards-Playing-Bidders-Off-Against-Each-Other.cfm
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Click here to read full article:
https://www.hoaleader.com/members/Racism-Hits-HOAleader-What-It-Hits-Your-HOA-Too.cfm
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5 Tips for Neutralizing a Racist HOA Owner or Board Member
We're not coming up with this topic out of thin air or to be provocative. A reader downloaded several HOAleader.com articles and products. Then out of the blue, he emailed us a rant that began with the following premise: "Blacks have an undeveloped 'Reptilian Brain' that deals primarily on a fear and aggressive level, as evident by their documented statistical criminal nature." What followed was a lengthy treatise filled with blatant racism.
Click here to read full article:
https://www.hoaleader.com/members/5-Tips-for-Neutralizing-Racist-HOA-Owner-or-Board-Member.cfm
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What HOA and Condo Boards Need to Know About Regulating Rentals [Special Report]
Rental restrictions are unlike most other policies HOA boards create because they necessarily curb owners' real property rights. The law jealously protects property owners' rights, which means any HOA board that seeks to restrict rentals in their community needs to act wisely and deliberately.
This report provides you with the information you need achieve that goal.
Click here to read full article:
https://www.hoaleader.com/public/What-HOA-Condo-Boards-Need-Know-About-Regulating-Rentals.cfm
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