Suppose you’re a new apartment association board member. Part of your duties is to oversee some of the accounting recordkeeping. But as you’re looking over the accounts, you notice mention of payments to a repair company. You call the number – not in service. You check the address – no known case of that company ever having operations there. Yet as early as a month ago, there was a payment to that company for services rendered.
Call it cooking the books, fudging the numbers, whatever you like. Your association board is looking at a potential case of fraud. One or more of your board members may be skimming funds and manipulating the accounts in order to do so.
Read more…
Donald is a board member who owns a snow removal and landscaping business. Jan is a board member as well as the owner of an insurance agency. Every year for the past ten years the board has voted unanimously to hire Donald’s company for their landscaping and snow removal. They buy their apartment association insurance policy from Jan. And both instances could be violating the terms of the association bylaws or worse, state laws.
That’s because associations are often required if not expected to keep an arm’s-length distance between their personal businesses and that of the association. If the bylaws state that the association will entertain bids for the various services, it is in their best interests to prohibit board members from submitting bids themselves. It smacks of nepotism and can set your board up for an unsightly lawsuit, one that could be waged against the association board as a whole, as well as individual members. If you’re not insured for directors and officers risks, a lawsuit could drain both association coffers and your own bank account. Read more…
Suppose your resident is behind in his payments to your condo association. Now suppose he has someone renting his unit. Should you as a condo association approach the renter and attempt to collect the owner’s rent instead of waiting for the delinquent resident to pay up? Can you?
Likely not. Your agreement is not with the person renting the apartment or condo. Your written agreement was signed by the resident in question. The renter has no idea usually that the resident isn’t paying his bills, nor does the renter have control over the resident’s actions. Also, renters pay maintenance fees as part of their rent payment to the owner. It’s the owner’s responsibility to forward those payments to the association, not the renter’s. Neither the association’s agreement with the owner nor the agreement between the renter and owner is set up to force a renter to pay an owner’s expenses, nor should they. Read more…
Tough economic times often force tough economic decisions for apartment and homeowner associations. Board members, eager to trim expenses, will often look to insurance policies for ways to decrease coverage and lower premiums.
Too often associations have claims denied because the coverage they once had was dropped due to budget concerns. Also, many association boards failed to understand critical elements of their policies, leaving them with unnecessary or unknown gaps in coverage. The most common areas that cause trouble for associations include: Read more…
When does your association make an exception to the restricted building or property access regulations? When the government is doing the asking.
Once again, the government is ramping up efforts to tally the country’s population. With the 2010 census about to get underway, the US Census Bureau is asking apartment and condo associations to help them reach as many residents as possible. Since participation in the census is a federal requirement, associations need to determine how census workers will gain access, especially in secured facilities. Read more…
Recent Comments