Getting Treasurer bonded?

Started by MegP1 • 14 replies • 9405 views

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MegP1 (California)
Posts: 8

Posted:

I am so grateful to have found this site.

Our governing docs state the Treasurer should be bonded. When I called our insurance company, they said we have a blanket Fidelity bond. Doesn't getting a Treasurer bonded require a more in-depth process (background check, etc.) or is the blanket bond enough to meet the requirements of the By Laws?

JohnK3 (Pennsylvania)
Posts: 967

Posted:

Meg,

Our docs require a fidelity bond for the entire BOD. $179/yr, $30K coverage, $250 deductible. All we did was submit an app with the 3 names of the BOD. No add'l info was requested.

MaryA1 (Arizona)
Posts: 7,043

Posted:

Meg,

If your Ins agent says the blanket fidelity bond covers you (blanket meaning everyone!), then that's all you need. A bond, is a bond, is a bond. . . .

RogerB (Colorado)
Posts: 5,067

Posted:

Meg, you did not mention the amount covered by the fidelity insurance. I would cover the total amount in all accounts.

JohnK3 (Pennsylvania)
Posts: 967

Posted:

Roger,

Our docs use a variation: 150% of annual dues.

MegP1 (California)
Posts: 8

Posted:

Thanks for all the feedback so far!

The bond is for $50K. They just need us to fax in the board info. I just wanted to make sure we weren't skipping a more rigorous step.

MaryA1 (Arizona)
Posts: 7,043

Posted:

Meg,

IMO, even for a small assn, $50K sounds too low.

Roger can give you a better estimate of what it should be.

RogerB (Colorado)
Posts: 5,067

Posted:

Mary,
The insurance we are aware of usually comes with coverage in increments of $50,000 since it is not expense. I think $50K for an association with no more than $50K anticipated funds in all accounts is sufficient.

MegP1 (California)
Posts: 8

Posted:

THANK YOU!

RobertS22 (Alabama)
Posts: 5

Posted:

What exactly is a bond for in this case? There's no mention of this in our Covenants and neither the management nor the Developer has mentioned this, should I ask, or keep quiet? We're a new HoA all trying to figure this stuff out. The management does help every now and then, but I'm holding them to task- that's what they get paid for.

MaryA1 (Arizona)
Posts: 7,043

Posted:

A fidelity bond protects the assn for theft of funds.

GlenL (Ohio)
Posts: 5,491

Posted:

Robert, not only do our CC&R's (Covenants, Conditions & Restrictions) require the Board members that handle money to be covered by a fidelity bond, they require the MC to post a bond at their own expense.

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 months’ assessments on all living units in the project, plus the Association’s 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) days’ written notice to the Association before the same may be canceled or substantially modified for any reason.

Studies show that 5 out of 4 people have problems with fractions

JohnK3 (Pennsylvania)
Posts: 967

Posted:

Mary is correct as to the function. Well, won't stop a theft, but will reimburse for one if it occurs. As to the Why? Our CCRs require one at the 150% amount previously noted. Should you have one if not required? That's a judgment call based on your individual circumstances. If we weren't required to have one, I doubt we'd voluntarily get one. But as it isn't a strain on our budget, and as amending the CCRs is difficult, we took the easiest path.

FrancescaM (Washington)
Posts: 264

Posted:

Quote:

Posted By MaryA1 on 06/08/2009 9:08 AM
Meg,

If your Ins agent says the blanket fidelity bond covers you (blanket meaning everyone!), then that's all you need. A bond, is a bond, is a bond. . . .

Same here.. our entire board has this done..

MaryA1 (Arizona)
Posts: 7,043

Posted:

Even if it wasn't a requirement, if I were the Treasurer I would insist on it. It's also for the protection of anyone handling assn funds. If someone were to claim embezzlement or mismanagement of funds, the fidelity bond would be a protection when the claim was proven wrong.

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