Pass thru account v Insurance Trustee

Started by JanineR • 5 replies • 426 views

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JanineR (Tennessee)
Posts: 259

Posted:

We were hit by a major disaster last year.
We do not get reporting on the insurance claim. Neither money coming in or out. It is millions.
The treasurer and the PM say they don’t report on it because “It is not the HOA’s money it is a pass thru account”.

Our Master Deed reads that the Insurance Trustee is on behalf of the unit owners.
So how can this also be a pass-thru account that requires no reporting?

TimB4 (Tennessee)
Posts: 21,059

Posted:

I expect that the info isn't in the report because the Association doesn't want it to appear as income.

The Association is simply holding the money until it is passed on to others.

Here is more info on pass-through accounts:

What are pass-through accounts?

Pass-through accounts

What is a Pass Through Entity?

JanineR (Tennessee)
Posts: 259

Posted:

It seems that all definitions of pass-through accounts are for another entity.
So we should find out who this other entity is?

On the other hand our documents say insurance goes to an account on behalf of the Association.

MichaelS56 (Minnesota)
Posts: 858

Posted:

When our Association had storm damage in 2005, our insurance company paid out one lump sum. That money was placed in the bank and the Association made a few thousand on interest. The Board wanted the owners to know everything money wise, and who, what and when the damage was gong to get getting repaired. The Board took the position that even though much of the money went quickly to vendors it was all documented for interested owners to review.

JanineR (Tennessee)
Posts: 259

Posted:

In our community, there doesn't seem to be any checks and balances between what is being paid by insurance, and what work is being performed. And the difference is not going back to the Association.

Here is an example:

*Insurance company is paying out $17k per hvac that was damaged in a natural disaster.

*Treasurer is blindly signing over all money from insurance to the GC.

*GC contacts home owners directly and offers them $2k in cash. "Your hvac unit was old anyway, etc. ". Unit owners accept the $2k and reach out to their own insurance company not knowing that the GC is being paid $17k from our master hoa insurance.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Janine

I do belief there should be an Accounting of the Insurance money. How much taken in and how much/where spent, be a a Pass Through Account or not. Do you know how much the insurance settlement was for?

How many of your 140 units qualify for an insurance claim on their HVAC?

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