HOAleader.com - Tip of the Week - May 10, 2019
Published: Fri, 05/10/19
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Experts: Debit Cards Are Too Loosey-Goosey for Condo/HOA Finances
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We caution a reader on having too-flexible financial processes in this week’s tip.
It’s in response to an HOAleader.com reader’s question: “We’re a small condominium in Florida. In the past, we’ve used a condo debit card to allow residents to purchase small maintenance items or to purchase food for gatherings. We’ve been told that debit cards can’t be used by condominiums in Florida.
“Is this true, and are there any suggestions other than a petty cash fund? We’ve discussed getting a credit card but have hesitated to do so because of the application process. Curious as to how other condos in Florida handle this.”
Our reader is right that in Florida, condo associations can no longer permit use of an association debit card, and our experts say that’s a good thing.
“No, you can’t use a debit card,” says Christopher J. Shields, a partner at Pavese Law Firm in Ft. Myers, Fla., who has represented associations for decades. “Under Florida law, that’s now prohibited for associations’ officers, directors, or agents to use a debit card, and it can be prosecuted under criminal statutes as credit card fraud. That applies to condos. The law is silent on whether HOAs and co-ops can still use debit cards, so the presumption is that you can still use them there.”
Shields has no problem with that change in the law. “Using a debit card is extremely dangerous,” he says. “Whether you’re buying a birthday cake or a chair, the people have already purchased the item, and the money is sucked right out of the association’s coffers—there are no checks and balances. Or in other cases, it’s billed directly to the association.
“If it’s not a valid purchase, too often board members say things like, ‘That person made a mistake here, so we’ll excuse it,’” adds Shields. “If it’s a board member who made the purchase, the rest of the board members shouldn’t be placed in a situation where one board member constantly seeks reimbursement because they need to work as a cooperative body.”
The law changed on this front as of July 1, 2017, adds Steven R. Braten, a shareholder and head of the firm’s community association practice at Rosenbaum PLLC in West Palm Beach, Fla.; he has nearly 25 years’ experience representing community associations.
Braten and other experts had a more basic question about the reader’s question: “Why are residents making small purchases for the association?” he asks. “The reader refers to residents as opposed to board members. That caused me a lot of angst.”
Find out why in How Not to Reimburse Owners and Board Members for Condo/HOA Expenses, our new article:
https://www.hoaleader.com/members/3910.cfm
Best regards,
Matt Humphrey
President
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Recent articles posted at HOAleader.com:
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How Not to Reimburse Owners and Board Members for Condo/HOA Expenses
An HOAleader.com reader writes: "We're a small condominium in Florida. In the past, we've used a condo debit card to allow residents to purchase small maintenance items or to purchase food for gatherings. We've been told that debit cards can't be used by condominiums in Florida.
Click here to read full article:
https://www.hoaleader.com/members/How-Not-Reimburse-Owners-Board-Members-for-CondoHOA-Expenses.cfm
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Holy Cow! Our Reader Is Right: This Can't Go On At This HOA
An HOAleader.com reader asks, "I'm a part of a 100-plus unit association in Texas. We've incurred more than $17,000 in credit card fees from owners paying online. Can we charge a convenience fee for this service to offset the expense? I'm wondering if the board could call it a 'use assessment.' What do you do to collect in a timely manner and offset this expense? I don't think that this can go on."
Click here to read full article:
https://www.hoaleader.com/members/Holy-Cow-Our-Reader-Right-This-Cant-Go-On-At-This-HOA.cfm
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Can Your Condo/HOA Charge This Fee When Owners Sell?
An HOAleader.com reader who also happens to be a Nevada real estate agent asks: "I sell a lot in the community I live. About 6 months ago, I was doing a closing and noticed a $100 charge beyond the transfer fee of $250, the demand of $150, and the HOA package of $180. They call it a final inspection fee to be sure there is no violation.
Click here to read full article:
https://www.hoaleader.com/members/Can-Your-CondoHOA-Charge-This-Fee-When-Owners-Sell.cfm
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How Closely Should You Track the Wellness of Your Condo/HOA Residents?
In this week's tip, we answer a question from someone who's written to HOAleader.com to complain about a community association manager and ask the proper protocol.
Click here to read full article:
https://www.hoaleader.com/public/How-Closely-Should-You-Track-Wellness-Your-CondoHOA-Residents.cfm
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Best Practices When Your Condo/HOA is Asked to Conduct a Wellness Check on an Owner
After an encounter with a manager, a person has written to HOAleader.com with a question for our expert lawyers and managers: "I recently had reason to believe my friend had passed away in her townhouse, and when I contacted the HOA manager, he refused to call the police. Not his problem, I was told. Personally, when a friend disappears for a month and someone's mailbox is so full of mail, it's stacked up by the door and the door itself is unlocked and a dread smell is emanating from within, I think it's time to call the police."
Click here to read full article:
https://www.hoaleader.com/members/Best-Practices-When-Your-CondoHOA-Asked-Conduct-Wellness-Check-on-Owner.cfm
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