California has some of the largest homeowner associations in the country. That being said members of the HOA deal with millions of dollars on a monthly basis.
Unfortunately fraud and theft have become extremely rampant in the past few years (20 BILLION PER YEAR) leading to the loss of hundreds of thousands and even millions for some California HOA’s.
Board members have been caught manipulating checkbooks and destroying records. Let’s go over a few ways your association can avoid this type of theft.
Check Signatures – Every check that goes out to a contractor or anyone else for that matter should always be signed by two board members. Some fidelity bond and crime insurance carriers won’t even cover you from a loss unless checks are signed in this manner.
Blank Checks – Association board members should never sign a check that has not been completely filled out. I’ve personally had clients that were victims to fraudulent checks due to this simple mistake.
Internal Association Systems – EVERY association no matter how small should have systems in place that ensure security and honesty. Many HOA’s have one person that takes care of the accounting, balances the checkbook, writes checks, and looks at invoices. If one person handles all financial matters there is no to ensure that every dollar is its correct place.
Make sure you’re properly protected – Every homeowners association in California needs a fidelity or crime policy. We can only do so much to prevent theft, even with refined systems in place theft can still take place.
Get in touch with one of our California HOA Insurance brokers today. We can go over your current policy to ensure you have proper coverage and re-quote your insurance policy with multiple carriers.