HOA Bank Statements

For the 1st time, we (the Board) ask the PM for copies of our Bank Statements. The PM responded saying he could not provide us with the copies, however, we were welcome to come to his office to 'view' the statements.

Background. The PM's company executives (3 of them) are the sole signatories on the bank account. No Board member has ever been a signatory on the account and has never seen any bank statements. We are a small community (40 units) and it appears PM total control over the bank account has worked well. A new Board member, when learning no one had ever seen a bank statement or even knew who had authority to sign checks, promptly ask the PM for copies of the a prior quarter's bank statements and cancelled checks.

Questions:
Can PM refuse to provide copies of our bank statements and cancelled checks to the Board?
Is it better to just go view the statements and checks and don't insist on copies?
In viewing the documents, would it be proper to 'take notes'?

Step 1. Go to PM office. Bring your own portable copier or scanner.

Step 2. Make copies of your docs - They belong to you, not them.

Step 3. Get rid of PM. The have no right to refuse to supply docs requested by the Board. Yes, a HO requesting docs might have to go to their office. But Board members are more than just HOs.

No. Not only is the PM employed by your association, they have a fiduciary duty to your association as they are handling your money.

Speaking of fiduciary duties, you and the other board members owe a duty to your membership and, based on what you wrote, you (collectively) have failed to perform. This is not high school student council. Each of you put your kids' college funds at risk when you failed to apply even the most basic control over association funds.



Are you serious? You should have the originals and not copies provided by the PM. Go to the bank and get copies from them. While at the bank, remove your PM from any and all involvement with your checking accounts. Start acting like directors.



See above.

Wow talk about the inmates running the asylum!

The accounts belong to the property. Are they not in the property's name?

How does the board verify the financial standing of the community? How do you verify assets? Expenditures?

In our case we would not request bank statements as if they were doing us a favor we would instruct the MC to provide them. As many as often and without any delay.

Now in our case, being its 2015 myself President, VP and Treasurer all have online access to each of our 4 banking institutions. There is no need for copies or statements everything can be seen online 24X7.

As far as check signing. In many cases double signatures in reality prevent nothing. In our case the MC issues checks, a copy of the invoice, check and original check are mailed to the Treasurer for her review and signature and then she mails them out. No checks are sent out directly by the MC without the Treasurer's ok.

And in our monthly packet we financial reports monthly, yearly, check ledgers for each check issued the previous month.

You might not need to replace the MC just explain they work for YOU are will do what they are told or the relationship will end.

I can't even imagine our MC explaining they could not provide what I requested. That would be an interesting conversation from that point on......

Fred,

Welcome to the forum. You have already received some great answers.

As others have said, and I believe you are aware, it's simply not prudent to allow the MC full control of the Associations funds. Even if it has worked well in the past and may work well in the future, ask the board this simple question: If they believe it's a good idea to have someone else have full control of their funds, then they should be willing to transfer their pay/retirement checks and all accounts to you and simply trust that you will pay the bills and take care of their money. I bet everyone will say that that is a terrible idea. Then explain that this is exactly what the Association is doing with the Association money.

Keep in mind: You do not need to be on the signature card of an account to make deposits.

Therefore, my recommendation (and as others have said) is the following:

For actual funds:

1) Review the contract with the MC.
There may be wording that require the MC to have control of the funds. However, if it's only optional, then exercise that option.

2) Open an account at a bank near the Association in the name of the Association (well two accounts, a checking (for operating funds) and a savings (for reserves)). The association will need an employer identification number (EIN) to do this. It's the same number you use for the Associations tax return.

3) Instruct the MC to close the Associations accounts and issue a check (or wire the funds to the new accounts) for the funds that are in those accounts controlled by the MC

4) Provide deposit slips to the MC and instruct them to deposit all future assessments into the Associations new account.

For Individual Accounts:

1) Review the terms of the contract with the MC to see if there are any restrictions or costs involved for the following.

2) Insist on obtaining printed ledgers for each lot over the past 3 years.

3) Place those ledgers into files that the Treasurer maintains.

4) Instruct the MC to provide a printed ledger for each lot at the end of the fiscal year from this point forward (this will help in the future if there are issues when/if you change MC).

5) Perform an internal review of the ledgers. (I've attached a spread sheet we use (came from our CPA)to do this). This can tell you if the Association has an issue in a ledger (which you will have to find) or are short funds.

Now for your specific questions:


Probably not. However, they may be able to charge you for those copies. This could become expensive.

Additionally, since no-one on the Board is a signatory to the accounts, technically the actual bank account is not the Associations. It belongs to the MC. Worst case, they may be placing funds from all the associations they manage into one physical account and are keeping internal records to show how much of the pot (so to speak) belongs to each association.


It certainly would be easier. It would also allow you to ask questions and build relationships with those who may see your desire to review as an insult to their trustworthiness.

so this may be the best option.


In my opinion, it would be proper to make copies (pictures with cell phone, a laptop and portable scanner, etc.)

Hope this helps,

Tim

Sorry to hear that another management company has kept the board ignorant of what they are supposed to do while they use other peoples money for some type of gain, usually in the area of "benefits' because they have a lot of money moving through that one bank.

Here's what you do today...You have to get your board to hold an emergency meeting to discuss this problem, your docs will state who is required to be on the bank account, in ours it's the president. THe secretary then writes a letter from the board, with all signatures, and takes that to the bank and to get them on it. ASAP

Secondly, search your CCR's to see if you are in violation of this particular Article, and if you are, then your MC has not bothered to actually read either, and that should be a breach of contract to get them out. Happens all the time, they prey on board members who do not know the ropes, let alone a lot of them who don't bother to read them themselves. Lying cheatin, bastardians, at least 98% of them.

With only 40 units, do you have a lot of amenities to take care of? You may be perfect for self management, which is what we do, and we hired an assistant instead of management company. Works beautifully! Good luck.

We place every board member as a signatory on the account.
This ensures any board member can sign a check (which the Treasurer has custody of) and, if they desired, check bank statements, etc. by going to the bank (if they don't have access to the accounts online).


Good point.


Should be, can be and could be only equals a maybe.

The terms of the MC contract must also be read (and understood).


Bastardian:

A unit of measure per the Urban Dictionary

Name of a Rugby Club per youtube

Perhaps it's just a pet name one spouse may give another


Again, excellent advice.

We have 130 lots and are self managed.
We utilize a bookkeeper (as an independent contractor) to assist with tracking payments and making deposits.
Far less expensive then hiring a MC or PM

I am curious. To all those that said they have online access to their bank accounts and statements. Do you forward the statements to the PM or give them online access also.

In California and many people misunderstand this, Associations must review (not necessarily approve) their financials on a quarterly basis. What is included in Civil Code is that they must review the BANK STATEMENTS from the financial institutions of their operating and reserve accounts. You would be surprised how many management companies and associations don't follow this.

Who reconciles the reserve account?

I like the sound of that a lot.


I think we do it similarly. As a hypothetical question, doesn't an owner have the right to know which of his fellow owners are not paying? Is there some sort of credit reporting law that allows an association to withhold that information?

That issue has been discussed often on this site.
The consensus has been that there is no consensus.

Many see the benefit of releasing names (causing peer pressure or to avoid embarrassment to have members keep current).

Many see it as an issue of privacy.

States vary. Some States have specified that you may not see accounts of any lot than your own.
Some States are silent on the issue.

Do a search on this site for "publish names" and you'll have 5 pages of posts about it.

Do a search on the internet for HOA publish names of delinquent accounts and you will get over 10 pages of links.

As I said, the consensus on this forum is that their is no consensus and it's up to each Board to make such a decision after reviewing applicable State laws.

Personally, I am all for listing all including names, addresses, phone numbers, Email addresses, anything we know as in public shaming but as Tim said, many object to such. In some states it might be illegal to do so but most object for some sort of privacy reasons. I say a deadbeat is a deadbeat.

When I was treasurer, I prepared an annual report of those over 1 year late and our present course of action such as lien, foreclosure, payment schedule arranged, and in some cases no response. It did not list names nor addresses, nor lot numbers, etc. though we on the BOD knew who all were.

If having financial problems then at least respond and work something out. Show me respect and I will return respect. Do not ignore me or dream up some esoteric reason.

I've attached a copy of the Treasurer's report I provide at every Board meeting and at the annual meeting.

The comments section at Board meetings are only for things that occurred from the last meeting.
The comments section at the Annual meeting will summarize any actions completed or pending.

I believe that this satisfies most who are wondering how many accounts may be delinquent.

Anyone who desires may feel free to modify it to fit their needs.

Tim

It is PUBLIC information once a lien or foreclosure is filed. Part of the process makes it so that it has to be put into print. Which most of the time is in the Legals section of your local newspaper. Which is where I found the majority of my information on who may be facing foreclosure in our HOA. It's not published daily as many newspapers no longer are.

That is why on an earlier post, I found it a waste of time to hire a lawyer to find out if one has a lien or foreclosure. It's as simple as looking in a newspaper....

Is that also where you all gather stones and throw at them when the drive in?

In the last 9 years we have only ever had one owner in our 32 unit condo development ask for copies of our bank statements. We receive a hard copy statement from the bank each month, but our statements are also online on the online portion of our bank account. So we just went to the website, printed out the 12 monthly statements for that year, and gave them to the owner - who we never heard from again on that issue.