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.
