Lots have been said and asked about the wisdom of working with delinquent owners in community associations, and allowing them to catch up using payment plans. Some see it as a kind and wise decision and advocate that it is the correct approach. Others seem to feel that it is unfair, and if a member of the association cannot pay on time they should be out. Still others are convinced that most people who engage in payment plans wind up “falling off the wagon” and don’t finish up making the association whole. My take on the subject simply is to consider the alternative.
Archive for August, 2013
Although our expertise is in community association collections our Senior Management Team are experts in money management, and after all when we recover association funds there are things you should know. So here are some commonly asked questions and answers that we get from boards of directors regarding reserves:
1) What types of bank accounts are operating funds and reserve funds held in, respectively?
Answer: Association funds should be held in financially stable, federally or state chartered banks and/or savings and loans that provide government guarantee on deposits. As importantly, they should NOT be comingled and transferring money from the reserve account to the association’s operating account should not be a simply task to be accomplished by just one board member. Therefore, the financial institution the association utilizes should have appropriate control procedures available to the association to make sure at minimum two active board members are involved with any transfers out OR between their bank accounts.