Condo Bets on Bitcoin: Losses and Lawsuits May Follow
HOAleader.com - Tip of the Week - November 10, 2023
Reports say that the Thornton Place condo board voted to invest some of its reserve and operating funds in bitcoin.
In this week's tip, we assess whether that's wise.
"No, no, no," are the first words out of the mouth of Brad van Rooyen, founder and senior member of Tampa, Fla.-based
HomeRiver Group and its national specialist for community association management, which oversee more than 230 associations throughout Florida.
In fact, all the experts we consulted with agree with van Rooyen that, if their clients
approached them for advice on this type of investment, they'd be very concerned.
According to news outlets, one of the Saskatchewan, Canada, condo association's board members raised the idea of investing in bitcoin. The board then voted to
invest 5 percent of the overall reserve fund and 6 percent of the monthly operating fund. That translated into a $25,000 (in Canadian dollars) initial stake and a $700 (in Canadian dollars) monthly investment.
A statement released by the
condo association said the investment "will permit Thornton Place to gain a limited exposure to a high-performing asset class without jeopardizing any of the long-term goals of the corporation and its owners."
Our experts often talk about
how boards have a fiduciary duty to invest association funds carefully. This move raises two questions: Is this investment consistent with board members meeting their fiduciary duties? And does the fact that it's a relatively small investment make a difference in that analysis?