Check your checks
HOA & Condo Blog
By Eric Glazer, Esq.
18 May 2015
Many of you may have seen the news again this week concerning
allegations that another licensed community association manager
misappropriated over $220,000.00 from a condominium association in
It certainly seems to be a growing problem. Over the last few months I
have personally been involved in three significant cases of theft of
association funds. In all of the cases, the one common denominator is
that the person with check signing authority was involved in the theft.
In one of the cases, there was no management company managing the
association. So, the President didn’t have much supervision and helped
himself. In another, there was a community association manager working
for the association who simply failed to catch the President steal six
figures, and in the third one it’s the manager herself who is accused
of the wrongdoing by fleecing the association’s funds by writing checks
to a company she owned.
So what are we learning from all this?
So what are we learning from all this? Apparently, it may not be enough
to rely on the community association manager when ensuring that the
accounting is accurate and all funds are accounted for. Someone on the
Board or perhaps a committee needs to check up on the manager. Next,
it’s far easier for a Board member to get away with wrong doing if
there is no management company and no interest by anyone else on the
Board or in the community in checking up on the Board member in control
of the check book. In one of the cases mentioned above, it was my
client, a unit owner who was not even on the Board, who uncovered the
theft. The other Board members never caught it. I should disclose
however that my client actually is a rocket scientist. No joke.
When there’s access to a large amount of money, and little risk of
getting caught, because nobody cares about checking the numbers,
perhaps the temptation to dip into the till runs high. There’s older
examples of Board members who were described as “devoted” and “kind”
and “sweet” stealing association funds and losing them in slot machines
at the casino. Everyone let their guard down, turned their back and had
too much trust in one person. It’s all about having proper checks and
top contents chapter previous