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By CondoAssociation.com • September 25, 2018

Bad HOA accounting leads to unwarranted fine

I have been informed that the new President of our condo association in Wasilla Alaska will fine me unless I send the Property Manager a paper check to pay my HOA fees. The Property Manager is her niece, a conflict of interest in my opinion. The alleged reasoning is the PM cannot correlate a direct deposit into the Associations account to the correct home owner. I have made all my HOA payments for eight years by direct deposit. The bank see's no problem with direct deposit, it is a common practice, there is record, people on the account can view transactions.

I prefer to pay all my bills in this manner. I have had my personal information compromised using paper checks. My deposit is in the Associations account before the first of the month. I sent the PM copies of this that came from the Associations bank to my bank. There is a record of my deposit for clarification if needed, nothing more needs to be done. This could be part of the problem, if it requires processing it keeps the Association more dependent on a PM, and that is the Presidents niece. Getting dues paid and into the WH account is the objective, directly into the account is in the best interest of WH and the owner.

If it is not possible to determine deposits made into WH account shortly after a deposit by simply looking on line I believe it. Not the case at my bank as I understand it but the Associations account is not at my bank. Whoever picked this bank didnt do their home work very well or it was intentional so direct payments would not be an option. An indicator either the Board was not leading or not paying attention. However, I do not believe the Associations bank cannot provide transaction information to identify deposits and withdrawals at some point under any circumstance. I don't believe that any bank could not understand that and provide information. How can people balance their books, keep track of deposits, withdrawals etc? Who is going to do business with a bank like that if one exists.

A couple of years ago WH switched banks. I was provided the account number and I asked the PM if my first payment was received. I sent it but did not know for sure if it made it into the appropriate account on time and was accounted for. I inquired about it and after a short time I was informed by the PM that it did in fact get into WH new account at the new Bank. Somehow that information was obtained quickly but now its a problem.

Everyone knows that payments going directly into any account is better than checks sitting around somewhere and messing with the extra work using a paper check, it is 2018. Driving to our complex in WH collecting paper checks from a drop box is a courtesy. It takes a little more time for them to process, one more reason for direct payments. Payments are not considered late until the tenth of the month by the Association so checks may be in the drop box until nearly the middle of the month. Mine has already been in the Associations account for two weeks drawing interest. Paying a penalty for that is unreasonable, as well as stating that deposits are not viewable after over two weeks.

As it stands the method used taking the extra steps to get owner HOA payments indirectly into WH account puts WH in a position to depend on a PM to process them. Intentional perhaps, job security and justification for it ? It could be interpreted that way with the President and PM related. I learned that the PM is the Presidents niece, which I and other people feel is a conflict of interest. Now that I have become involved I have a better understanding of what is going on. It is best for WH to be as independent as possible. I know the board didnt decide on their own accord to discontinue direct deposit. There is no reason for a vote on how people pay their bills unless the board thinks the PM can't do the book keeping.

I am certainly no expert on the Bylaws or CCR's governing the Association. Apparently there is quite a bit of latitude but even loosely written there are limitations. To alleviate the possible perception of a conflict of interest the easiest rectification would be for the President to step down from the Board, in my opinion. Hopefully the Board will take measures to improve accounting methods.

I am looking for some clarification from someone that knows about these issues, ethics, regulations, guidelines and laws.

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Please note that blog comments and postings are not legal advice, rather only the opinions of our readers.
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