A review of the recently approved automated mini-market contract shows that Brickell Key One (BK1) will not receive commission on sales, while still carrying certain operational costs and responsibilities. The contract was approved unanimously by the Board members present at the September 26th meeting .
Approval Process and Due Diligence
At the September 26th Board meeting, President Olena Biletska introduced the proposal for an automated mini-market to be placed in a first-floor storage room. Several aspects of the approval process warrant clarification:
- Contract Review: President Biletska stated during the meeting that the contract had been reviewed by the Association’s attorney.
- Board Familiarity With the Contract: When Board Member David Goldbaum was asked to make the motion to approve the agreement, he acknowledged he had not personally read the contract and relied on others who had.
- Revenue Details: When Board Member Jose Massuh was asked what commission percentage BK1 would earn, he was unable to provide the number at the meeting. Management staff noted that board members are not required to recall such details from memory.
Despite these unanswered questions, the motion passed unanimously (Board Member Andrea Sanso was absent).
Contract Terms
1. Revenue Structure: A review of the signed agreement indicates:
- Commission Field Left Blank: The contract does not specify a commission percentage, resulting in a 0% revenue share for BK1.
- Missing Financial Definitions: The contract does not state whether any future payments—if added—would be based on gross or net sales. There is a big difference between these methods. It also does not include payment timing terms (e.g., net 30 or net 60).
- No Audit Provision: The Association does not have the contractual right to review or audit the vendor’s sales data, which may limit financial transparency.
2. Operating Costs and Responsibilities: The agreement includes several costs and obligations for BK1:
- Electricity: The Association must cover all electrical costs for the market’s refrigeration units, lighting, security equipment, and automated checkout system. Without a dedicated meter, the exact cost cannot be tracked.
- Installation Costs: BK1 is responsible for any required modifications, including installing a glass door and an exterior security camera.
- Entity Name: The contract lists the counterparty as “Brickell Key,” which is not the Association’s full legal name, “Brickell Key One Condominium Association, Inc.”
- Cancellation Terms: We have to live with this for at least a year
3. Liability for Theft Reports: The contract includes a clause requiring:
- 72-Hour Response Window: If the vendor reports missing items and requests information from management, BK1 must respond within 72 hours.
- Cost Responsibility: If the Association does not respond within that timeframe, it may be responsible for the cost of the reported missing items. Given ongoing concerns about timely communication with the management office, this clause may present operational challenges.
Please look at the two vendor’s documents to see the choice that the board made.
Conclusion
The current contract provides limited financial benefit to the Association while assigning several costs and administrative responsibilities to BK1. These issues raise questions about the contract’s terms, the approval process, and whether all key information was fully reviewed prior to the vote.
The Board may wish to clarify the rationale for approving the agreement and outline any next steps, including whether renegotiation or contract modification is being considered in order to protect the Association’s financial and operational interests.