MC not turning over bank accounts

Started by SandraB2 • 5 replies • 1033 views

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SandraB2 (South Carolina)
Posts: 24

Posted:

After letting the MC go on 2/4 they gave us 2 checks which we have used to open new accounts. We had 3 open accounts as of dec. 31. These accounts were in the hoa's name but the new board was never put on at the bank the MC has had total control since the turn over meeting dec. 8. I figure they are still sitting on about 20,000 of HOA funds. Jan regimes and some of Feb. were collected they paid NO BILLS all of Jan. and some unpaid bills from Dec. They still state they want to be paid 1 year penalty. Do they have any legal standing to hold the funds on those accounts. Would they not have to sue to recover for the penalty?

SandraB2 (South Carolina)
Posts: 24

Posted:

I guess I should have been a little more careful on my wording. Not looking for legal advice we do have an attorney working on this for us. We have sent a letter requesting the accounts be closed and all funds turned over ASAP accounting for all deposites and withdrawals from dec. 31(last bank statements) to date just looking for some thought on the matter

MicheleD (Kentucky)
Posts: 4,491

Posted:

Here is the magic two-word answer to almost any question anyone can ever come up with:

It depends.

What does your contract say?

Some contracts require a minimum notice period (like a month or whatever).

Some have no cancellation clause and state penalties (which could conceivably be what they are claiming) for cancellation.

So. Really.

It depends.

SandraB2 (South Carolina)
Posts: 24

Posted:

Our docs state any contract with MC must contain 30 out with or without cause no penalty. This contract was produced after the new BOD gave them their 30 day notice. Its 2 yr 60 day notice with 1 yr penalty. they did take 60 days to turn over. On top of what our docs say we have found them in breech of this contract for so many reasons I cant start to list. We will go to court to fight the penalty if needed. We will probally sue MC and developer as soon as we get the HOA through this transition.It just seems to me that they cant just take funds that are in the name of the HOA. Isnt that stealing? We started this fight over 2yrs ago. Hope its over soon. Good thing is we got our Hoa from them. Bad thing is this MC is like most in SC so we will self manage. SC does not have laws to protect HOA's from MC's. Maybe if HOA's in SC banned together and switch to self management they might get some laws in place to protect the home ownwers and the HOA? Well just a thought

MaryA1 (Arizona)
Posts: 7,043

Posted:

Sandra,

I hope the board has learned their lesson! Never, under any circumstances allow the HOA's bank accounts to be put into the name of the mgmt co. And always have a board member as a signatory on all bank accounts. Frankly, it's also a good idea to have a board member, preferably the Treasurer, sign all checks -- not the PM.

SandraB2 (South Carolina)
Posts: 24

Posted:

Oh yes indeed Mary! We had no choice before our wonderful developer alowed this. MC will not be on at the bank Pres. and Treasurer will sign all checks. Just hope we can recover the missing funds.

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