For as long as we can remember, residential condominiums were required to maintain a fidelity bond or insurance in an amount at least equal to the total funds in the control of the board and/or their management agent. That requirement has always applied only to residential condominiums…until now!
House Bill 7119, recently signed by the Governor, extends this requirement to homeowners associations effective July 1, 2013. The new statute is as follows:
- 720.3033(5) The association shall maintain insurance or a fidelity bond for all persons who control or disburse funds of the association. The insurance policy or fidelity bond must cover the maximum funds that will be in the custody of the association or its management agent at any one time. As used in this subsection, the term “persons who control or disburse funds of the association” includes, but is not limited to, persons authorized to sign checks on behalf of the association, and the president, secretary, and treasurer of the association. The association shall bear the cost of any insurance or bond. If annually approved by a majority of the voting interests present at a properly called meeting of the association, an association may waive the requirement of obtaining an insurance policy or fidelity bond for all persons who control or disburse funds of the association.
A few observations are in order here:
- Nothing has changed relating to residential condominiums.
- Non-residential condominiums are still not subject to the bond requirement.
- Cooperative associations are not subject to the bond requirement.
- Timeshare associations are not subject to the bond requirement.
- Homeowners associations can opt out of the requirement as stipulated in the statute.
Gravity–what’s it costing you?
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