DIGEST / In a nutshell
LEGISLATIVE COUNSEL'S DIGEST
AB 2912, Irwin. Association finances.
(1) Existing law, the Davis-Sterling Common Interest Development Act, limits the personal liability of a volunteer officer or director of an association of a common interest development in excess of the coverage of specified insurance if certain conditions are met.
This bill would require the association to maintain fidelity bond coverage, as specified.
(2) The act requires a managing agent of a common interest development who accepts or receives funds belonging to the association to, upon written request by the board, deposit those funds into an interest-bearing account in a bank, savings association, or credit union in this state, provided certain requirements are met.
This bill would prohibit transfers greater than $10,000 or 5% of an association’s total combined reserve and operating account deposits, whichever is lower, without prior written approval from the board.
(3) The act requires, unless the governing documents impose more stringent requirements, the association board to review various financial documents and statements on at least a quarterly basis.
This bill would require those reviews on a monthly basis. The bill would also require monthly reviews of the check register, monthly general ledger, and delinquent assessment receivable reports and would authorize these requirements to be met when every member of the board, or a subcommittee of the board including the treasurer and at least one other board member, reviews these documents and statements independent of a board meeting if the review is ratified at the board meeting subsequent to the review and that ratification is reflected in the minutes of that meeting.
If only this were required EVERYWHERE
