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5 March, 2014 at 3:30 am in Computer

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We know it happens. There are over 300,000 shared ownership communities (condos, http://www.tittleandpyne.com co ops and HOAs) in the United States. Just based on sheer statistics, there have to be crimes committed in some of those businesses every single day. Embezzlement in a condo is no different than in any other business bad or misguided people sometimes do bad or misguided things. The Palm Beach Post today reported that a former president of one division of a huge South Florida condominium development, Century Village has been charged with embezzling over $30,000 from her association. Now, there are people who will look at this story and claim it provides proof that all condos and HOAs are corrupt, that board members are inevitably thieves and scoundrels and that the system should be dismantled. But to me, that's no different than arguing that we should outlaw banks, or real estate companies, or heck, even retail stores. For gosh sake, Florida replica tag heuer carrera just elected a governor who oversaw one of the largest corporate health care frauds in history. Why are those people, and those companies, held to lower standards than everyone else? Is it because they are so big that they are infallible? Is it because the frauds and thefts committed are less local, less personal? My take is that crimes happen in all businesses, regardless of size or type, and it's the responsibility of the other business owners to take basic but necessary steps to ferret out corruption before it gets out of hand. I think the case above is an excellent example of how to prevent fraud in your own community. The article explains that the fraud was uncovered when another retiree in the community volunteered to be on the board of directors, and asked to see the year end finances. replica breitling uk When told that they were "unavailable," she did some digging and discovered that the president had not been paying her association bills. When this was brought to the attention of the rest of the board they immediately removed the president and asked her to turn over the books of the association. A quick investigation revealed that two condo accounts had been closed due to overdrafts, and an audit revealed the embezzlement. So what we have here is a concerned volunteer resident who did the right thing she asked questions, and when those questions went unanswered she insisted on action. Who knows how long this officer might have been able to defraud her community before it was discovered without the active involvement of this resident? The ex president doesn't sound like an evil, conniving person, but rather a normal person with a gambling addiction who, like many criminals, made a foolish, desperate choice. What can we learn from this story? First, if you live in an SOC you have to make it your personal responsibility to take a few minutes each year and look over the budget and finances when they are sent to you, and request a copy if they have not. It is your right as an owner to review the books and records of your association. Second, if you serve on a board of directors remember that you have a legal obligation to oversee the operation of the association. No one person should ever have complete control of any condominium or HOA association, no matter how small. It's just incredibly dangerous to trust any single person with tens of thousands of dollars, no matter how dependable they may seem. Consider specifying that your checking accounts require the signature of two board members that way, no single person (absent forgery) can defraud the association. I also think that cases like these illustrate that management companies, far from being evil empires, can provide a very significant benefit to all associations by serving as an extra layer of oversight and an automatic check and balance against fraud. Can management company employees commit fraud? Certainly. But when the books of an association are handled by an independent corporation, rather than a single individual or board, it enables those people to watch each other for fraud, and management companies are far more accountable to the board and residents than a single officer might be. It's just like the system of checks and balances in our government one group watches the other, and if they both watch carefully, they should be able to uncover fraud and theft before it gets out of hand. No system is ever going to prevent theft outright. If thieves can rob banks and museums, they can certainly steal money from a condo association. But with constant oversight by multiple parties and even the barest involvement by residents, the risk of significant embezzlement can be reduced dramatically. Both owners and board members need to take their duties seriously, and understand that part of living in a shared ownership community is sharing responsibility of condominium management, as well. If you're looking for a totally hands off approach to your investment, consider that a home without a membership association might be your better choice.

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