From the Community Association Attorneys at SwedelsonGottlieb
It is no secret that community associations are often targets for embezzlement. But they are not alone. Newspaper articles tell us that it happens to various types of businesses and organizations, even attorneys and lawyer/bar organizations. Fraud and embezzlement seems more likely to occur when no one is watching those that control the checkbooks. And unfortunately, many many condominium, stock cooperative and planned development boards of directors become too trusting and they don’t keep an eye on what their manager or treasurer are doing.
To ensure that community associations are better protected, the California legislature passed AB 2912, acknowledging that associations are susceptible to fraud and embezzlement, and that more is needed to completely achieve the goal of protecting community association funds. Pay close attention as there are new requirements for both managers and boards amending two sections of Civil Code and adding three new ones. AB 2912 made the following changes to the law: