Community Association Law

Protecting Your HOA Against Embezzlement and Fraud

Many of you may be aware of the recent news stories of embezzlement and fraud involving HOA property managers and Board members. Unfortunately, these actions have affected both new and long-time clients of this firm, and we are proud to assist these HOAs in getting back on their feet. It is important to note that the vast majority of property managers are highly respectable, ethical and diligent in their management of homeowners associations, and Bagwell Holt Smith P.A. always commends the Board members who volunteer their time and energy to bettering their neighborhoods.

Out of an abundance of caution, it is important for HOAs to take basic steps to guard against fraud and financial crimes. Community Association Management, an acclaimed property management company with offices throughout North and South Carolina, recently put out a guide to help address protecting an HOA from fraud and financial crimes.

Community Association Management recommends the following basic steps an HOA can take to help protect their assets:

  • Select a Reputable HOA Management Company
  • Require Timely Financial Reports
  • Review Financial Reports
  • Ensure Proper Management of Bank Accounts
  • Conduct Independent Audits
  • Confirm Proper Insurance is in Place

While these basic tactics are not a guarantee against financial crime, they will at least significantly reduce the risk of theft. For a more thorough discussion of the above steps and additional details on protecting your HOA, we recommend that you download “Protecting your HOA from Fraud and Financial Crimes” by Community Association Management at the following link:

You can also feel free to reach out to Michael Ganley, managing attorney of the Community Association Law department at Bagwell Holt Smith P.A. if you are concerned that your HOA or the HOAs you manage may not have the proper embezzlement, fraud and financial crime protections in place.

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