Let’s be honest—no one wants to think about fraud or embezzlement happening in their community association. But as we’ve seen all too often, theft can and does happen, even in the most well-meaning communities. At Mulcahy Law Firm, P.C., we want your association to stay safe, informed, and in control. That’s why we’re sharing some simple but essential steps boards [...]
Recently, we’ve heard from many condominium boards and managers about a noticeable uptick in requests from lenders regarding the Condominium Project Questionnaire Addendum. If your association has received one of these “demands”, you’re not alone—and you’re right to approach it with caution. What Is the Condominium Project Questionnaire Addendum? Lenders send these questionnaires to condominium associations to gather information about [...]
Associations should be working on their 2025 budgets! There are several things for Associations to consider when starting the budgeting process, especially if there have been significant changes in the community or if the community has undergone financial hardship. A community association budget is a summary based on the anticipated income and expenses for each fiscal year, broken down into [...]
Mortgage foreclosures (which, in Arizona, are known as trustee’s sales) were a hot button topic during the pandemic, primarily due to the moratorium on mortgage foreclosures. With the foreclosure moratorium having expired on 06/30/2022, it’s a good time for community associations to revisit this important topic. A trustee’s sale occurs when a trustor (i.e., borrower) falls behind on payments due [...]
Most community association documents require an associations' board of directors to adopt a budget for each fiscal year and early to late fall is typically the time of year devoted to that process. Because the management company is familiar with all aspects of the association, they usually prepare the budget for the board's approval. However, an association's finance committee should [...]
Approximately 65 million Americans (or 1 in every 5) live in homeowner associations, including condominiums and planned communities in the United States.[1] The number of homeowner association communities in the United States has risen from approximately 10,000 communities in 1970 to 342,000 communities in 2016.[2] In a recent study, Arizona ranked tenth in the country in number of community associations, [...]
By: Beth Mulcahy, Esq. Here are our Quick Tips for the Annual Budgeting Process that will make sure your board is assessing the current and future needs of the association. In a planned community, the budget must be approved by the board, but there is no requirement that the budget be approved by the membership prior to the start of [...]
It has happened; there are funds missing from the checking account. Figures do not line up and you cannot get in touch with anyone. The board always sees a financial statement at each board meeting, so what went wrong? Any organization that believes it is immune from the fraudulent use of funds is destined to become a victim. Mulcahy Law [...]
By Beth Mulcahy, Esq. When a homeowner files a bankruptcy (and lists an association as a creditor in the bankruptcy), there is an automatic stay in place, which prohibits the association from proceeding forward with collection against the owner or face strict and costly penalties. The association may proceed forward after the bankruptcy is dismissed, a lift of stay is [...]
Our law firm suggests that boards have the following accounting and financial controls in place to prevent embezzlement and fraud in their association: 1. Keep association records up to date; 2. Assign control of all reserve funds to the entire board; 3. Monthly financial reports should be prepared and made available for board review (include in the monthly report, a [...]
