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Subject: Closing/moving - Out of State bank account
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Author Messages
TammyC3
(New Mexico)

Posts:70


10/14/2019 4:40 AM  
Hello AGAIN!!

Annual meeting held. We survived! Long time treasurer is GONE (much like 15% of our revenues)! But I digress.

During our annual meeting, suspicions were confirmed. The 'signers' on the association's out of state account have not been updated for a decade! People who have sold and moved away are still signers on the account.

**5 months ago the board motioned to move account from Arizona to New Mexico and *(out of state)treasurer was to send check made out to the association to open new account. This did not occur.

**Treasurer and past president advise they recently (after the BoD asked who the signers on the account were) tried to remove these past signers but they must provide documents .... that they don't have.

The Board will elect officers at the "first board meeting after the annual meeting". A new treasurer will be elected. Past treasurer states as soon as she knows who the new treasurer is, she will issue check but won't send it through the mail because it 'might get lost', and suggests BoD open an account and then an 'electronic' transfer can occur. Unsure what funds she wants us to use to open this 'new' account!! (interesting that the check cut 10/2/19 for the venue to hold this year's annual meeting was 'lost' in the mail and still has not been received).

Questions:

1) How do we navigate through this without dragging the drama into the bank? The current BoD would like a check cut to open new account and once complete, treasurer can close Arizona account and send balance .. or remit electronically. I'm looking for the legal/no drama way to accomplishing this. How to keep it 'simple'?

2) How do we safeguard the reserve amount? The previous treasurer allowed monies to accumulate as "savings" that are not defined or designated. When opening a new account, we must set up a 'reserve' account. It would relieve my anxiety if 'reserves' are separated from the general fund and not 'easily' available. Suggestions?

Although we've halted the losses under the past treasurer (improper billing of assessments to friends a.k.a the developer). We feel a great responsibility toward safeguarding monies from any abuse. We consider 3 signers & two signatures required, but (large national) bank cannot 'guarantee' that they won't clear a check only signed by one person?!!?

I'm 8 months new to this adventure and most time has been spent bringing the association into compliance. There is NO guidance in statute or docs that address this problem.

I sincerely appreciate all guidance and advice.


















MelissaP1
(Alabama)

Posts:9024


10/14/2019 5:55 AM  
Best people to ask is the bank and their process. They are the source. We changed signees every election. Had to sign a form at the bank and have the others removed. Can't remember what "proof" had to bring to show who is the board members. May had to have something with a corporate seal on it. Think it was the official meeting notes of the HOA reflecting the election. Had to show up personally with the previous signee to transfer.

Keep in mind that was the bank we used. Maybe you all can just start with a new slate and sign up at a whole new bank. Close out the old account should get everyone else off.

BTW: We had special checks with 2 signatures on them. A little costier than other checks. However, they had to have the Treasurer/Issuer signature and 2 board members to pass the mustard.

Former HOA President
SamE2
(New Jersey)

Posts:241


10/14/2019 6:48 AM  
How about if she mails the check to you by certified mail, UPS or FedEx. She can just make the check out to the HOA.
TammyC3
(New Mexico)

Posts:70


10/14/2019 7:08 AM  
I totally agree Sam!

We consider that a check for the full amount doesn't necessarily 'close' the account. Minutes are needed to open a 'new' account, but again, doesn't solve the 'close' account issue.
Hoping minutes that state 'close Arizona account #XXX' and submit bank certified check made out to association via certified, UPS or FedEx delivery will solve 'closing account' on her end. IF she complies.

thanks!
TammyC3
(New Mexico)

Posts:70


10/14/2019 7:15 AM  
Thank Melissa!

We are understanding the need for meeting minutes when opening at a new bank (AZ bank used does not have branch in NM).

Wondering if treasurer can go solo into AZ bank with meeting minutes directing to 'close' account and issue certified check to XXX Association for balance.

Could you explain "...had to have the Treasurer/Issuer signature and 2 board members to pass the mustard."
Would this mean that 2 sign the check but an 'approval' must be signed by 2 members and the treasurer/issuer?

Thanks Melissa
MelissaP1
(Alabama)

Posts:9024


10/14/2019 9:17 AM  
Our accountant had a special check ledger when writing checks. The checks had a place for their signature. There were two other places on the check for 2 board members to sign. So I as President would pick up the signed check by the accountant, sign it, and then get another authorized signee to sign. That way every check written showed 2 board signatures for checks and balances. So if anyone wanted to see checks they would see who signed.

The check ledger isn't cheap if I recall. Will tell you that banks may not always check for the multiple signatures prior to cashing. It's not really for the bank. It's for the checks and balances of the HOA. Think more people feel a bit better knowing that it's a 2 signature system when cashing checks. It doesn't always need to be President but a combo of board if President not available.

I found that telling people that ALL checks had 2 signature requirement put many minds at ease. Membership knew about the requirement for each check and it reflected in the meeting notes. Again a way of open transparency.

Former HOA President
LetA
(Nevada)

Posts:875


10/14/2019 9:53 AM  
I would think if you went to the bank with your meeting minutes and a printed off copy from your secretary of states office naming the board of directors should be sufficient to start a new account.

As for getting the funds from the out of state bank, once you have a new account established, I don't see why the OOSB can't overnight a certified check next day air with signature required or via electronic transfer.
GenoS
(Florida)

Posts:3570


10/14/2019 5:26 PM  
Congrats on your persistence, TammyC3. I think your board should not even entertain the out-of-state Treasurer's proposal, and just tell her the board prefers a certified check sent registered mail. I would want to get her away from control of the money ASAP.

Funds from the reserves should not be co-mingled with operating funds. They should be in separate accounts.
TammyC3
(New Mexico)

Posts:70


10/16/2019 5:17 AM  
Our Secretary recommended exactly the same thing. Open & transparent is the goal. Great minds .... !!
The two signature requirement puts MY mind at ease!
Thanks Melissa.
TammyC3
(New Mexico)

Posts:70


10/16/2019 5:42 AM  
You're on point. In a better world, the Treasurer would have sent the board approved check and a new account would have been opened months ago.

Currently the Treasurer (when advised of the new NMSB 150 penalties) says she will cut a check. But does this 'close' the account? Would the Treasurer have to supply meeting minutes to the bank stating the association is 'closing the Arizona account #XXX" and will "open a new account at Bank XXX"?
My worry is that the treasurer will cut the check and the balance falls to $0.00 and there will be a 'minimum balance' penalty or other issue, because the account isn't properly 'closed'.

We work through this today.

Your advice is so appreciated! Thank you.

Tammy
TammyC3
(New Mexico)

Posts:70


10/16/2019 6:25 AM  
Thank you GenoS.

We sport more than a few battle scars and we are worn & weary. "We're almost there." has been the past year's mantra. If we had only known!

Would it be too much to hope that our next topic will be "Operating Funds & Reserves"?

Hoping this issue is behind us by next week. We're almost there!

Thanks again,
TammyC3



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Forums > Homeowner Association > HOA Discussions > Closing/moving - Out of State bank account



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