Treasurer not paying dues

New to the forum!

We are a small 8-unit building. We self-manage. It turns out that our treasurer has not been paying his condo fees for over a year.

He sends a monthly email reminding everyone to pay their dues. He evens sends reminder to the whole building when someone is late.

But, upon looking at the financial statements recently, I discovered that he hasn't paid his own dues in over a year. Well over $3,000.

Is this fraud, larceny, embezzlement, etc...? It sure feels like he's been stealing, but there was never an overt act to cover this up. If he had cooked the books, I'd have his a** thrown in jail, but I feel like there should be some repercussions for this type of action.

Of course, he'll be thrown off the board and threatened with a lien unless he pays his back-dues. But, can we take further action? I know, I should contact a lawyer, but I'm just looking for preliminary advice.

Thanks!

Things like this really disappoint me and make me shake my head and wonder, "WHAT was he thinking?!"

I don't know the exact legal definition (embezzlement? fraud?) but it would be unethical at the very least, and potentially illegal.

Do you have a position on the board?

Is there a member of the board you can talk to about this?

If you could find this out just by looking at the financial records, why could or did no one else?

Very disappointing.

You would really have to consult an attorney.

The thing is, you may want to determine how much you want to spend on this.

If he pays the money and resigns, it may be in your HOA's best interest to write it off as a learning experience.

Anony,

Not paying one's assessments does not equate to theft, albeit it's the Treas. who is delinquent. If you think some embezzlement is involved then by all means have the books audited by a certified CPA. However, if this treasurer is embezzling I would think he/she would be able to cover up his/her delinquency.

Any one who is delinquent should be receiving delinquent notices and paying late fees and fines. A $3,000+ delinquency certainly should merit a lien, at least. Since you say you just started self-managing, I have to wonder how capable your manager was. When the manager was on contract didn't he/she or his mgmt co prepare the financial statements and send out the delinquent notices? Why wasn't this caught sooner as the size of the delinquency leads me to believe it's been going on for quite some time. Another reason why embezzlement does not seem to have taken place.

Your first order of business should be to thoroughly research your bylaws for a provision that would allow the board to remove the treasurer from the BOD. Many assn bylaws allow this w/o a vote of the membership if the director is delinquent for more than 30 days. On the other hand, if your bylaws are silent on this or do not allow it then the BOD can ask for his/her resignation. If that doesn't work then take action to have the treasurer recalled. IMO, any board member this far delinquent does not deserve to serve on the BOD -- even if it is a true financial hardship that has caused the delinquency.

Frankly I see no need to contact an attorney at this point, except perhaps to collect the delinquency. If an audit is performed and embezzlement is found then an attorney should be consulted to determine what legal action can be taken regarding the embezzlement. If the BOD does decide to have an audit performed make sure to inform the CPA that embezzlement is suspected -- explain the treasurer's delinquency.