Homeowners Association Policies Should Include a “Procurement Policy”

Homeowners’ associations, acting through their board of directors, are responsible for operating and maintaining their development. To that end, large amounts of money are expended each year for the procurement of supplies, equipment, construction, and services. To ensure that the association’s funds are spent ethically and responsibly, associations should have procurement policies (also referred to as purchasing policies) in place to guide their directors, officers, managers, and other personnel (collectively referred to as “Procurer”) through the process of purchasing products and services. Such policies typically cover items such as the following:

• Procurer Conduct
• Solicitation and Competition
• Selection
• Documentation
• Contract Administration
• Violations

Procurement policies enable associations to maintain consistency from year to year as board members, officers, managers, and other Procurers change, and facilitate the association making prudent decisions concerning expenditures. A procurement policy sets standards and defines procedures that must be consistently followed to ensure effective and compliant procurement practices. For example, the policy will require: