Preserving and Protecting Homeowner Money from Fraud and Embezzlement
Whereas California’s 55,000 homeowner association boards collect an estimated $200 million in assessments annually from homeowners, and association boards now control about $13 billion in cash now on deposit in banks, credit unions, savings and loans, and other financial institutions, and
Whereas association boards are unregulated by any state or federal agency, and cases of fraud and embezzlement of homeowner monies from financial institutions by association agents are escalating at an alarming rate, and
Whereas it is the intent of the Legislature to protect the owners in a common interest development from fraudulent activity by those entrusted with the management of the association’s finances.
Therefore Be It Resolved, that the Riverside County Democratic Party affirms the principle that homeowner money be deposited only in federally-insured trust accounts, in California financial institutions only, and established in the name of the beneficial owners of the accounts, i.e. homeowners, and not in the name of the agent or other third party; that funds not be invested in speculative or uninsured instruments; that the agent have written board authorization, dated and recorded in association minutes, to establish accounts or make transfers from them; that the agent not commingle funds from different associations or with the agent’s own accounts; that all bank statements be available for inspection and copying within three business days of the request; that the agent retain fidelity coverage, and
Be It Further Resolved that a copy of this resolution be sent to Governor Gavin Newsom, Pro-Tem Toni G. Atkins, and Speaker Anthony Rendon, Department of Financial Protection and Innovation Commissioner Manuel P. Alvarez.
Author: Agi Kessler, AD 56
Passed by Riverside County Democratic Party 3/29/2021