Theft happens. Both board members and property management companies have been found guilty of stealing condominium association funds. There are several ways to ensure the safety of your funds:
- Financial activity should be transparent between the management company and the board (and preferably all owners). Management should never have exclusive access to association funds.
- Board members should be reviewing financial activity on a regular basis and addressing any red flags immediately. Ultimately, it is the board that is responsible for the association's funds.
- Obtain proper "employee dishonesty" coverage and add your management company (if you have one) as an additional insured. Your basic policy might include a limited amount of coverage. Add additional coverage if your total funds (amounts held in all bank accounts ) exceed the covered amount. The premiums are generally quite low for this added coverage.
- Keep your bank account access up to date. When new board members are elected, the old board members should remove themselves as signers from the account and make sure that the new members are added.
Easy access and little oversight make condo association funds particularly vulnerable to theft. Taking these steps can minimize potential losses.