JC3
Posts: 290
Posts: 290
Posted:
Who buys the bond for your management company? Does the association buy it or include the MC on the Association insurance policy?
Or does the MC buy it on themselves?
Or does the MC buy it on themselves?
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Who buys the bond?
Started by JC3 ⢠4 replies ⢠1174 views
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GlenL (Ohio)
Posts: 5,491
Posts: 5,491
Posted:
That depends on what your documents or contract require, in our case: Section 2.10. Fidelity Bonds. The Board shall obtain fidelity bond coverage with respect to any person who either handles or is responsible for funds held or administered by the Association, in an amount no less than the maximum funds that will be in the custody of the Association or its management agent at any, time while the bond is in force. Provided, however, the fidelity bond coverage must at least equal the sum of three monthsâ assessments on all living units in the project, plus the Associationâs reserve funds. A management agent handling funds for the Association shall also be covered by its own fidelity bond, at the sole cost of said agent, naming the Association as an additional obligee. All bonds shall provide for ten (10) daysâwritten notice to the Association before the same may be canceled or substantially modified for any reason.
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JC3
Posts: 290
Posts: 290
Posted:
ours say:"Cause the managing agent of the Association (not including Directors or officers) having fiscal responsibilities to be bonded:
So, that doesn't say the ass. pays for it of the mc pays for it. Which do you folks do?
Also, if any officers DO sign the checks and mail them, should they be bonded by the association, though they are not required to be? Seems a reasonable thing to do.
So, that doesn't say the ass. pays for it of the mc pays for it. Which do you folks do?
Also, if any officers DO sign the checks and mail them, should they be bonded by the association, though they are not required to be? Seems a reasonable thing to do.
PaulM (Pennsylvania)
Posts: 1,347
Posts: 1,347
Posted:
JC3: Why would the management company require a bond from the association?
PaulM (Pennsylvania)
Posts: 1,347
Posts: 1,347
Posted:
JC3: Therein again lies a reason for NOT giving the management company or its employees the authority to manage the assn. checkbook or manage its money.
When your documents state that the managing agent has 'fiscal responsibilities', it is referring to filing appropriate forms on behalf of the association and executing financial reports/budgets. Different from having 'hands on' with the association's money.
Yes, the Assn. is normally required to have 'fidelity bonds' for anyone who handles or is responsible for funds for the assn, usually the Board and/or perhaps a Finance Committee. Your insurance company will advise you how to handle. The Board's "limitation of liability" should be specified in the Declaration portion of your documents.
When your documents state that the managing agent has 'fiscal responsibilities', it is referring to filing appropriate forms on behalf of the association and executing financial reports/budgets. Different from having 'hands on' with the association's money.
Yes, the Assn. is normally required to have 'fidelity bonds' for anyone who handles or is responsible for funds for the assn, usually the Board and/or perhaps a Finance Committee. Your insurance company will advise you how to handle. The Board's "limitation of liability" should be specified in the Declaration portion of your documents.
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