Subscribe to Blog

Your email:

Looking for answers?

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

Browse by Topic

Find HOA and Condo Association Loans, Insurance or Property Managers

Our HOA Solutions

Follow us on the web

Become a fan on Facebook

Follow us on Twitter or twitter.com/communityliving

Join our Linked-In Group

Add to Technorati Favorites

HOA Loan Articles

Most Popular Posts

About Our Blog

HOA Insurance Articles

Condo Association Management Blog

Current Articles | RSS Feed RSS Feed

Condo association insurance - questions about fidelity bonds

Posted on Thu, Jun 24, 2010 @ 06:43 AM
  | Share on Twitter Twitter | Share on Facebook Facebook | Submit to Digg digg it |  Add to delicious  delicious |  Submit to StumbleUpon StumbleUpon |  Share on LinkedIn LinkedIn |  Share On Technorati Technorati | Submit to Reddit reddit 

Our condo has 176 units and we have condo reserves of approximately $850K and operating funds of $200K. We have D&O insurance and a Fidelity Bond of $1M. Our managing insurance agent refuses to obtain a Fidelity Bond because they state that they don't handle "cash".

In reality, the property management company receives our monthly condo fee, deposits those checks into various accounts and they do on-line transfer of funds between accounts. They also issue checks on behalf of the condo which are signed by two HOA Board members. My question is - does the law require a management agent to have a fidelity bond equal to the amount of funds that the HOA has on deposit? And, is failure to provide a fidelity bond grounds for contract termination? Thanks everyone for your comments.


Tags: ,

Comments

In Massachusetts by statute association must have fiedlity inusrance in minimum amount of 3 plus assessments naming manager as additional obligor. A prudent association would like have insurance for 3 months PLUS reserves. Also note that if manager has fidelity insurance, it typically excludes dishonest acts of prinicpals of company. 
 
 
 
Stephen Marcus 
 
www.meeb.com
Posted @ Thursday, June 24, 2010 7:06 AM by Stephen Marcus
In my opinion, your direction is right on the money. We hear horror stories everyday regarding funds lost through misappropriation and outright theft.  
Consider a Fidelity Bond for the HOA naming the Property Mgt firm as well. 
In the application process you will discover weather or not P/Mgr can qualify as a named insured. If they aren't bondable should they handle your HOA's funds? Good luck.
Posted @ Thursday, June 24, 2010 8:00 AM by Jeff Leavitt
Post Comment
Name
 *
Email
 *
Website (optional)
Comment
 *

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