“Alexander Hamilton started the United States Treasury with nothing, and that was the closest our country was to being the same.” – Will Rogers
From time to time a problem arises in community associations which has arisen lately in an association which I am fortunate to represent, and a member of the board thought it might make a column worthwhile. He was right, so here we are. Plus, I don’t want to lose either a reader or a customer.
Every condo must have at least two bank accounts. One is for the operating account. This account is used to pay the usual bills such as insurance, maintenance, management, landscaping, snow removal and your attorney. The other is a reserve account set aside to build funds for long-term capital expenditures. Properly funded will avoid both special assessments and punishing younger homeowners for the financial sins of long-term homeowners who have not been adequately saved and cleared.
(Some associations have multiple backup accounts, allocating each account separately to a separate project. This can not only become an administrative nightmare, but it can happen if a project lacks the money needed to carry it out, but you are loaded with money. in another? reserve account because that project was below budget?)
(The only real reason to have separate accounts is to split the money into higher interest accounts, such as certificate of deposit accounts, by paying one each quarter, so you can always have the money ready for a project or emergency, but you can earn higher interest rates). , though not much, than in your savings account.)
Regardless of the account number or type, there must always be at least two signers in the account. Generally these two should be the president and the treasurer. If you have a management company, the manager can be the third party, so the management company can have access to bank statements, write checks and report to the board on the financial situation of the association.
It seems so simple, perhaps so simple that what is often overlooked is making sure that at least two (2) officers or other board members are signatories to the account.
But from time to time, including a recent instance with the association that led to this column, the sole accountant is the property manager. What happens if the property manager resigns, is fired, sells the business, or dies? That can be a real problem.
(And note that the legislature in 2016 only understood language added to the Autonomous Communities Act that states that an officer does not have to resign from that position until one year after the agent sells his unit. So, if I am in your account, I can sell my unit, move to the islands or somewhere far, far away, and still have access to your accounts, especially the well-stocked reserve account.)
It can take a long time to convince a bank that you actually have a right to be in the account if you are not in the account as a subscriber. If this happens, call the bank immediately and request to meet with an account manager. Bring the condominium documents, the list of officials, the minutes of the meetings of appointment of board members and officers, and any letter you have in which you dispense with the asset management company of its functions for your association, and request that let him know.
If that doesn’t work, though it should, contact your attorney and ask your attorney to send a stern letter to the management company sooner rather than later, noting the danger that your actions will not meet with the bank and allow you to put an association official. in the account can cause, how not to pay bills, everything that can be part of a lawsuit against the company, an easily avoidable.
Make sure there are at least two (2) members of your association in the account each year, usually the treasurer and the president, and make sure after your annual meeting, if the officers change, make an appointment to update the signatories. Simple but important, and often overlooked.
On a lighter note, it’s spring. You live in a community association. Try and create one. Have some food and think about making an association barbecue. The voice runs and the grid starts. Let people who just see or hear about you at a board meeting or in minutes put a face with a name and let them know that you are human, that you have a decent sense of humor, and that you are a good cook and neighbor. Take the money out of the budget. Not much, but the returns can be phenomenal.
In any case, enjoy every minute. Sit on your deck and / or open a door and listen to the sounds of spring after a long, cold, quiet winter. Enjoy the colors you see and the warmth you feel. Winter will be here again very soon.
Finally, rest in peace Gene Fisk. One of the friendliest and kindest people I’ve met in almost 25 years practicing condominium law. There should be more like him. The world is a smaller place because it doesn’t exist.
Attorney Robert E. Ducharme is a former professor whose civil practice is limited to condominium law, primarily in Rockingham and Strafford counties. You can contact firstname.lastname@example.org and Ducharme Law, PLLC at www.newhampshirecondolaw.com. His column appears every fortnight.