Could Philadelphia benefit from the same new Condo/HOA Laws implemented in California ?
This week, we’ll be highlighting the newly passed California Assembly Bill 2912, scheduled to take effect from the 1st of Jan 2019. It is targeted at combating embezzlement and fraud in HOA Community Associations. You might want to consider adopting its provisions even if there’s no provision for it under our Philadelphia or our state laws.
The existing laws in California were not necessarily lax with regards to prevention of financial impropriety at HOAs and condos, but this new law tightens some loose ends. Here are some of its biggest changes:
* HOA Boards are now required to produce a written consent before the association is allowed to transfer any sum of money more than $10,000 or 5% of the combined operating accounts and reserve deposits, whichever is smaller, via electronic means.
*board subcommittee’s including the treasurer or individual board members are now mandated to review the financial information of their association every month rather than quarterly. The association’s monthly general ledger, delinquent assessment receivable reports and their check books were specifically included in the review (while the original law comprised of budget comparison report, balance sheet, bank statements, income and expense statement including a reconciliation of the reserve and operative accounts).
*the association is required to maintain some form of fidelity bond- insurance covering losses occasioned by dishonest or fraudulent acts – spanning across three months’ worth of assessment including reserves and the coverage of dishonest acts and computer frauds by the HOA manager.
Should your Philadelphia association implement those changes even if they don’t have to?