Question:
The neighborhood where I reside has 52 lots and charges $150.00 per year. The dues are intended to cover the cost of the street lights and a small patch of grass with flowers around the entrance.
Recently the board has started spending money on food and drinks each time the board meets. The annual meeting is being held in a restaurant, each person in attendance orders off the menu anything on the menu as well as take home. All paid for by the HOA .
Several other expenditures are only for the board members and benefit no one else. At the last annual meeting the board announced the payment of a stypent for each of the board members. (much too much to mention)
My question is, can we freeze the bank account if so how?
– Brian
Answer:
Hi Brian,
Typically, HOA bank accounts are controlled by the association’s board of directors. They may be frozen in certain circumstances when there is a court order. However, it may be wise to first raise your concerns about excessive spending or fund mismanagement with the board by contacting them directly or bringing it up at a board meeting. Board members have a fiduciary duty to the community so they must act in the community’s best interest. Generally, HOA funds are also only used for things that are within the annual budget. HOAs typically increase fees or levy special assessments only when there is a need.
The governing documents may also indicate how to handle fund mismanagement within the HOA. You may also opt to remove the problem board member(s) according to the procedure outlined in the governing documents. For further guidance, kindly consult a lawyer.
Disclaimer: We are not lawyers. The information provided on this website does not constitute legal advice.
