HOA vs PM Bank Accounts

Started by NancyA4 • 6 replies • 1549 views

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NancyA4 (Florida)
Posts: 17

Posted:

Being new to all this, I have a question. Our checking and savings accounts are all in our Property Manager's name. We are investigating changing our PM, and have found that we will need all new accounts. Being an accountant, I would have thought that the accounts would be in our HOA name, with the PM being given access rights. Apparently this is not the case. Is this a routine practice in the PM industry?

PaulM18 (Virginia)
Posts: 46

Posted:

Our PM had our checking accounts in thier name and wouldn't let us write checks.... We had to submit requests to them to issue checks.

So we told them to close the accounts we'd manage our own funds.

HeleneN (Connecticut)
Posts: 84

Posted:

Our accounts are all in the name of the Assoc. c/o of the Management Co. Checks are generated by the management company but for internal controls we require the signatures of 2 of the directors on all checks. The property manager does have signing authority(something I'm against). Two directors receive copies of the monthly statements to check the activity. Our Assoc. tax # is used on all accounts. If we were to change management companies we would file a new signature card without closing out the accounts though we might open up a new operating account and close the old one.

Keep in mind, the property manager works for you!

BruceF1 (Connecticut)
Posts: 2,535

Posted:

I believe all HOA bank accounts should be in the association's name so that money received is deposited into those accounts and money paid out from those accounts. It's certainly preferable for tax purposes and is easier to explain if the HOA is ever audited. I don't know what kind of hanky-panky the PM is pulling, but I would change the account arrangement immediately. Also, your present arrangement, as you have already learned, makes it harder to switch PMs (maybe that's why the PM did it; they're not stupid).

Our bank accounts are in the association's name. The PM company has the checkbook and prepares the checks, but the PM does not have signature authority. Signature authority resides with our treasurer and president who reviews the checks prepared by the PM before signing them.

It's the HOA's money. Put it in the HOA's account.

TimB4 (Tennessee)
Posts: 21,059

Posted:

I agree with Bruce.

RogerB (Colorado)
Posts: 5,067

Posted:

Nancy, Our policy as a MC is to have all accounts in the name of the HOA with our Managaging Agent having rights only for deposits, viewing (for monthly reconcilliation), and transfer between accounts when necessary. We recommend this policy to all HOAs and to never allowing the Managing Agent or MC to be a signer on any HOA account.

BruceF1 (Connecticut)
Posts: 2,535

Posted:

Quote:

Posted By RogerB on 07/21/2012 8:00 AM
Nancy, Our policy as a MC is to have all accounts in the name of the HOA with our Managaging Agent having rights only for deposits, viewing (for monthly reconcilliation), and transfer between accounts when necessary. We recommend this policy to all HOAs and to never allowing the Managing Agent or MC to be a signer on any HOA account.

That's how our MC works with our HOA.

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