Subscribe to Blog

Your email:

Follow Us

Looking for answers?

condo association blogCan't find the answer you're looking for?  Ask your question here and we'll post it in our blog.

Browse by Topic

Condo Association Management Blog

Current Articles | RSS Feed RSS Feed

Can condo association president obligate future board to new vendors?

  
  
  
  
  
Is it legal for a Condominium President to sign contracts with vendors and employees obligated the future board and the association without a board of directors vote? Our past president signed an employment contract with management 3 weeks before his reign was up. This document has no witnesses and was back dated. Also, a (3) year contract was signed with Comcast. Both of these contract were signed without board approval. Can the current board sue the past president and file a claim under the Errors and Omissions Policy?
Tags: 

Comments

Contracts can be broken; also, I believe a management company contract can be broken by giving 2 to 3 weeks notice.
Posted @ Monday, March 07, 2011 7:15 AM by Anonymous
Have a look at your CCR's. I doubt the President has the authority and he would be acting ultra vires if he signed contracts without authority. Some States required contracts of a certain value to be put to the membership. Which State are you in?
Posted @ Monday, March 07, 2011 7:15 AM by TonyD
Interesting Q. Anxious to read knowledgeable answers. No guesses please.
Posted @ Monday, March 07, 2011 7:25 AM by Brenda FH Briggs
IMO, most bylaws give the Pres the authority to sign contracts. Unless your bylaws state the board must agree to the contract b/4 it is signed by the Pres then he has not done anything wrong according to the bylaws. 
 
IMO, board members who allow the Pres to act w/o their approval are very remiss in performing their duties. The Pres of an HOA board only has absolute power if the other board members grant it to him! When a board operates in this manner they are not operating in the best interests of the assn and it's members.
Posted @ Monday, March 07, 2011 7:42 AM by Mary
condominiun act states that the president is the spokesperson for the board of directors and acts at their direction 
 
the board can vote that any money over a certain amount needs to be approved by the board
Posted @ Monday, March 07, 2011 8:36 AM by anonymous
Thank you for your responses. We are in Florida. We are curious if we have grounds to sue the President under the Errors & Omissions Insurance Policy to recover the penalties that we would assume in voiding these contracts.
Posted @ Monday, March 07, 2011 10:04 AM by Ronald
landlord did not tell tenant she subleased parking spaces my car was towed can i deduct part of the rent
Posted @ Monday, March 07, 2011 10:33 AM by Theresa Bruce
i live in calif., the landlord did not tell she was subleaseing other parking spaces my car was towed can i deduct half from the 1000.00 rent half of towing cost 205.00
Posted @ Monday, March 07, 2011 10:35 AM by Tami Terrell
See Fl St 718.3026 (1) and 3 (d). Members can challenge any contract with a vendor under the provision of 3 (d). It seems to me that if the President did not have the authority to enter into a contract then it is void, it is up to the vendor to sue the President for damages. 
The first question 'did the President act ultra vires the Statute and By-laws'? 
Also see:- 
http://www.becker-poliakoff.com/pubs/articles/adams/adams_2005_02_17.pdf  
 
Posted @ Monday, March 07, 2011 10:55 AM by TonyD
Before throwing your money away on a lawyer, just tell the management compay they are on notice of dismissal-the contract should tell you how long you must give notice. Why do you care if Comcast has a contract? In Michigan the person who wants comcast pays, the association doesn't. Some have comcast, some have other servers.
Posted @ Monday, March 07, 2011 2:54 PM by Donna A.
Most contracts have in them a clause that MAY give either party the option to discontinue services upon a given notice, usually 30 days notice. As far as the presidents authority is concerned, in FL the Board President is the Executive Officer of the Board and has full power to enter into a contact as long as he's exercising reasonable fiduciary responsibility to the Association. When Tony says "did the President act ultra vires the Statute and By-laws", or did he exceed his authority, it depends on your By-Laws and if any limitations are in them which may limit a contract to a vote if it goes beyond a certain dollar amount. F.S. 718 does not do this. The President of the Board is the President of the legal business entity of your Condominium, a Not-for-Profit Florida Corporation, and can act as such. This is why is is very important to give careful consideration to who you vote into office. Your Board is elected by the Association Members, the President is vote into office by the Board as it's President.
Posted @ Tuesday, March 08, 2011 9:58 AM by cebo
Cebo is right the President is able to execute a contract i.e. sign it on behalf of the Association providing he is acting within his authority. In most cases he would act with the authority of the Board or pursuant to the authority vested in the President by the Bylaws. It would be rare indeed for a President to have unrestricted authority to enter into contracts. 
The original question referred to Comcast, in my experience their contracts do not have a mid-term cancellation clause. Fl Statute 720 requires the Board to obtain alternative quotations if a contract represents more than 10% of an Association's annual budget. This raises the interesting question. Is the value of a contract with no cancellation clause the value over the term of the contract or just one year?
Posted @ Tuesday, March 08, 2011 11:45 AM by TonyD
Post Comment
Name
 *
Email
 *
Website (optional)
Comment
 *

Allowed tags: <a> link, <b> bold, <i> italics