Condo Association Management Blog

What recourse are you looking for? Has there been any suspected malfeasance? How has your manager responded? 
 
 
 
The question should be, where is the money now?  
 
 
 
If it hasn't been spent, just transfer the funds into a new account. Rates are so low, that any interest earned is probably negligable. Since you know the monthly amount and how long you had been reserving, it's a pretty simple calculation to establish a new bank account.  
 
 
 
If the money has been spent on operating your association, then perhaps you have been under budgeting your operation expenses. 
 
 
 
While the manager perhaps should have opened a separate account (in a separate financial institution), unless your state requires a separate physical account, as long as the money is accounted for in an identifyable account on your general ledger, there may not really be an issue.  
 
 
 
Why hadn't the treasurer or other board member asked about the reserve account's balance up until now? The manager should be reporting the reserve status at each meeting or at least included with the association's monthly reports. 
 
 
 
If your're not happy with your manager, I sure that there are plenty out there that can assist you.

The affairs of the condominium are primarily the responsibility of the board of directors (apparently each owner is also a board member or officer). The Reserve Account should only be under control of the owners - with the manager making a deposit to the account upon receipt of assessments, or at least once a quarter. The recommendation of Community Associations Institute and the insurance industry, and what most mortgage companies look for, is that the management company does not have the signature on the Reserve Account.  
Unless the board authorized expenditures utilizing the additional income, it should still be in the checking account. With interest rates low, the condo has not lost any significant income. It is also possible that the condo has incurred expenses that exceeded the Operating Income for the budget year and that the intended contribution to Reserves has been spent - again in effect the effect of a board (owners) not reviewing the financial reports.  
Therefore the best action is just to have the manager write a check made out to the condo and the owners meet at the bank to open a savings account. Thereafter the manager at the instruction of the board will regularly transfer income into the Reserves. 
 
Subsequently, the board should write a letter to the owner of the management company, include the minutes of the meeting showing the resolution to fund Reserves; thereby giving notice of a breech of contract. This is the first step in establishing cause to break the contract and seek new management. If the financial condition of the board was due to excessive expenditures, then the board should state that the manager failed to advise the owners of the need to adjust the Operating Budget. However all financial information needs to be reviewed to establish true cause for this budget issue.  
 

You had best consider changing our management company. Is the company you bow employ licensed and insured in California??? Review the terms of your contract with them to determone when it expires and for termination notice requirementws. Any management company that ignores the need for adequate reserve funds shoukld be terminated.

So, where was the BOD during the last 2 years? If the mgr did not set up a separate reserve account why didn't the board ask why? And, actually a board member would have to set up the account, not the mgr. since the account would be in the name of the assn.

Sorry,I hit "post" too soon. 
 
 
 
Since you want to assess blame, IMO, it goes to the BOD not the mgr. You ask what recourse you have -- normally I would say elect a new board but since you only have 4 members that isn't a possibility. So, let this be a lesson for the board members. The BOD is resp. for the mgmt of the assn even if they contract the services of a prop. mgr. The mgr. takes orders from the board, not the other way around. 
 
With regard to funding the reserves, take immediate steps to open up a separate account and deposit $112 x 24 ($2,688) into the account. The money should still be in the operating account if it was budgeted for reserves. 
 
The board members should be reviewing the financial statements each month. Our mgmt co. provides 3 financial statements each month -- one for the operating account, one for the reserve account and a consolidated statement which includes both accounts.

It sounds as if you need to rattle the Board's cages. Most Boards have insurance against fraud. I hope yours does as I would really want to know where the money has gone. They should have an accounting sheet/budget available for all residents at all times. 
 
 
 
 
 

Can a very recently deceased homeowoner's vote be counted at a homeowners meeting? Her proxy exists and the state is Tennessee.

Marie, 
 
 
 
IMO her voteor proxy would count if the election was held before her death. You can't vote from the grave nor give a proxy. Until title is transferred on her unit, IMO, her personal rep (executor) would be able to cast a vote

had a situation like this recently in one of our Los Angeles property's, feel free to e-mail me at info@cmreg.com and I can explain to you the situation.