Page 11 - New England Condominium July 2019

NEWENGLANDCONDO.COM NEW ENGLAND CONDOMINIUM -JULY 2019 11 ■ Depth of Knowledge & Experience ■ Expert Advice ■ Creative Approaches & Solutions ■ Flexible Billing Arrangements Thomas Bhisitkul (781) 817-4611 tbhisitkul@lawmtm.com Christopher S. Malloy (781) 817-4604 cmalloy@lawmtm.com Douglas A. Troyer (781) 817-4605 dtroyer@lawmtm.com Thomas O. Moriarty (781) 817-4603 tmoriarty@lawmtm.com (781) 817-4900 30 B RAINTREE H ILL O FFICE P ARK , S UITE 205 B RAINTREE , MA 02184 (617) 934-4550 265 F RANKLIN S TREET , S UITE 1801 B OSTON , MA 02110 www.lawmtm.com MTM is a full-service Condominium & Real Estate Law Firm Experience, Integrity, & Drive Set Us Apart Uncommon Expertise for your Community of Common Interests lenders for owners in a condominium. “Financial mismanagement is another whatever the maximum funds in their edgeable coverage advisors are essential. issue,” Mackoul continues. “Typically, it’s custody is,” adds Mackoul. “Naturally, the board who makes the decision how the management firm would need more only one that almost ever gets the asso- the association funds are handled – not than this limit, since they likely manage ciation substantial returns on money lost the management firm, which takes di- rection directly from the board. If there multiple claims if is an instance where a management firm one individual were mishandled association money, the board stealing from mul- could in fact sue the management. The tiple associations. management firm would then have to re- port it to their errors & omissions (E&O) limit is $1 million, carrier, which, depending on what is be- ing alleged, would defend the manage- ment firm and provide a settlement or pay require more.” judgment if such was determined.” The insurance limits recommended vary by association. “The ideal minimum come of financial amount is at least one-fourth of the as- sociation’s annual assessments,” suggests board or manage- Howes, “plus the average balance of the ment level is an as- reserve account – provided that the re- serve account is under the custody and the funds to keep up with even routine gets prosecuted,” adds Howes. “You can’t control of the managing agent.” “For a fidelity bond for a community and owners/shareholders who’ve done that money is long gone. There should be association, three months of maintenance nothing wrong can find themselves at checks and balances for all accounting. I fees is a minimum guideline, but realis- tically they should maintain a limit of having insurance and competent, knowl- multiple buildings and thus could see is insurance,” says Jeffrey Diamond, an als advise boards to check in with their The standard E&O but a larger associa- tion could certainly High and Dry The worst out- misdealing at the sociation finding itself broke and without holding the bag – even if the ‘bad guy’ maintenance. Property values can drop, get blood from a stone, and many times a significant monetary loss. This is why always tell clients to get two signatures on “Of all possible remedies here, the agers, as well as to always receive – and attorney with Mar- cus Rosenberg & that all of the coverage and remedies Diamond in New mentioned above are in place. It would York City. “Collect- ing from the perp – to request that insurance requirements themselves is less are spelled out explicitly in management likely, even if they contracts. There’s very little downside in do end up going to taking every precaution when it comes to jail, which is why preventing or recovering from theft or fi- insurance is so im- portant.” “When there is no insurance in- volved, an asso- ciation is often left checks over $1,500, and to never give up full control of the bank account to man- review – monthly banking statements.” Insurance and accounting profession- insurance carrier annually to make sure also be smart – even if not required by law nancial malfeasance. n Mike Odenthal is a staff writer/reporter for New England Condominium. “If there is an in- stance where a man- agement firm mishan- dled association money, the board could in fact sue the management.” — Mary-Joy Howes