Legal Contract?

[bobby1free]

What is the name of your state? Maryland.
I live in a planned community with CCRs. In the bylaws, it states "3 Bids must be obtained for all individual planned expenditures of $1000 or more."

The contract with our management company will end in December 2006. The company offered to extend the contract at the same terms for two more years. The contract itself has no provisions for extending the contract. The Board of Directors approved the extension without getting any other bids. Their rationale was that extending the current contract does not constitute a new expenditure so bids were not required.

Is this "extension" legal or is the Board obligated to soliciate new bids?

[seniorjudge]

Originally Posted by bobby1free

What is the name of your state? Maryland.
I live in a planned community with CCRs. In the bylaws, it states "3 Bids must be obtained for all individual planned expenditures of $1000 or more."

The contract with our management company will end in December 2006. The company offered to extend the contract at the same terms for two more years. The contract itself has no provisions for extending the contract. The Board of Directors approved the extension without getting any other bids. Their rationale was that extending the current contract does not constitute a new expenditure so bids were not required.

Is this "extension" legal or is the Board obligated to soliciate new bids?

Doesn't sound legal to me since it is a new contract.

[HomeGuru]

Originally Posted by bobby1free

What is the name of your state? Maryland.
I live in a planned community with CCRs. In the bylaws, it states "3 Bids must be obtained for all individual planned expenditures of $1000 or more."

The contract with our management company will end in December 2006. The company offered to extend the contract at the same terms for two more years. The contract itself has no provisions for extending the contract. The Board of Directors approved the extension without getting any other bids. Their rationale was that extending the current contract does not constitute a new expenditure so bids were not required.

Is this "extension" legal or is the Board obligated to soliciate new bids?

**A: the clause that you quoted is from a bigger section of the CC&R's that have to do with common area R&M expenditures etc. Post the entire section along with the title.

[bobby1free]

WHETSTONE HOMES CORPORATION
BID POLICY
1. Bids must be obtained for all individual planned expenditures of $1000 or more.
2. Bids may be solicited for expenditures under $1000 if the Whetstone Board of Directors deems it
appropriate.
3. A minimum of three bids will be solicited. If three qualified bids are not received, additional bids
may be solicited or the reasons for presenting less than three bids must be explained.
4. The Whetstone Board of Directors will select the evaluated bid representing the best combination of
services and value from the group of qualified bidders.
5. The Whetstone Homes Corporation Board of Directors is under no obligation to select the lowest
bid.
6. Bids may be solicited to cover periods not to exceed three years in duration as long as they provide a
cancellation clause, with or without cause.
Adopted 4/10/2003
Reaffirmed 5/8/2004

Note that this was an amendment to the original CCRs that was passed in 4/10/03 and amended again in 5/8/2004.

[HomeGuru]

it is unclear since the intent of that clause was for R&M issues.