Condo board — and owners — failed their duties by not uncovering alleged embezzlement
Donie Vanitzian, JD
Question: Our development has hundreds of condos and an unusually large budget. Our homeowner association was served with a search warrant to review our records and computer data. A forensic audit found evidence of embezzlement by an employee and others. All owners just received notice that a big special assessment has been imposed on each unit and our monthly assessment is being raised by a substantial amount. Was the board negligent? Should insurance cover loss of association funds? Are special assessments and increased monthly dues the only way to handle this situation? What if owners can’t afford to pay?
Answer: Assets that this board manages are owned by titleholders and because of that, are included in the board’s management of the common interest development.
Negligence is the failure to use such care as…
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