This article discusses California law requiring third-party HOA managers to deposit HOA funds in either an HOA-controlled account or a trust account held by the manager in a California bank, savings association, or credit union. It also emphasizes the importance of reviewing the HOA's financial health before buying into a community and highlights the Annual Budget Report as a valuable resource for assessing the association's financial stability.
California law says a third-party HOA manager must deposit HOA funds in either an account controlled by the HOA or into a trust account maintained by the manager in a bank, savings association or credit union in California. Q: Our HOA has their bank accounts with an online bank. Our payments are mailed to a postbox address outside California. I contacted the bank, and they were unable to provide a physical branch address in California.
If you have confirmed that the manager’s bank has no presence in California, then the association deserves an explanation as to why the manager is violating this requirement. A: Checking on the financial condition of the HOA before buying is very important and a good idea. Once one becomes an owner, the Annual Budget Report is a great way to gauge the association’s financial health. High delinquencies and a low reserve fund balance are two factors among many that can indicate poor HOA financial health.
HOA California Law Financial Protections Bank Accounts Annual Budget Report
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