bond requirements

Started by RalphR1 • 4 replies • 1928 views

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RalphR1 (Colorado)
Posts: 52

Posted:

One of our "most" outspoken and aggitating resident members says that his research found that the members of the Board of Directors and/or the Treasurer of our 55+ HOA must be bonded. He sites "Condominium Law". We are not a condominium however I can't talk to him because of pending law suits he has against the community, past board members, employees, etc. I have not ever heard of the requirement for the officers and/or Board members need to be bonded for the protection of the residents.
Thank you....Ralph

MelissaP1 (Alabama)
Posts: 13,836

Posted:

That doesn't make sense to need to be bonded. The HOA provide Liabilty insurance to HOA officer to protect their personal assets in a HOA lawsuit. That's about all a board member gets or needs. It's all basically volunteer unless arranged otherwise.

This person can't see the forrest for the trees...Suing your HOA is suing yourself and your neighbors. Which means also the basis and information about these suits should be available for any member to know about. However, there may be some discretion as the board is the one communicating with the lawyer. Once the case is rendered a verdict then it can become PUBLIC information unless the judge seals it. Just some FYI...

Former HOA President

RogerB (Colorado)
Posts: 5,067

Posted:

Ralph, perhaps his thinking if that since Board members are the signers on financial accounts that they should be bonded. I prefer to recommend Theft insurance be acquired for the HOA's we manage.

JonD1
Posts: 2,350

Posted:

Ralph:

We have Fidelity coverage in the amount equal to or just exceeding the totol assets of the association. This to protect us in the case members of the Board steal all of our money.

This is also one of the requirements for some lenders to approve the property for financing.

This is covered under our Master policy and is separate from D&O coverage.

BradP (Kansas)
Posts: 2,640

Posted:

Ralph

I didn't see that in the condiminium act but did see it as it relates to new york corporations. My opinion is that it wasn't intended for volunteer officers of condimiums but technically he is correct. Anyone handling over $1,000 of the corporations money has to be bonded. I would discuss with your attorney possible remedies.

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