Criminal background checks?

Our property manager works for a management company, so they do those background checks. We don't do it for treasurers (I served for five years for my community), and have a variety of safeguards, like requiring two signatures when checks are over a certain amount.

I understand the intent, but it may be more important to establish various controls regarding the money that would apply to all hoard members (treasurers aren't the only ones who steal). Especially if you're self managed.

You may also want to get surety bonds for the association in case the property manager or the company develops sticky fingers and make sure you have directors and officers insurance. That means reviewing the bank accounts every month, getting periodic audits and so on. Talk to your association's master insurance company, the bank and association attorney about identifying and reducing risk

What Sheila said.

It's more important to put controls in place to prevent anyone from raiding the bank accounts - even people without a history of theft can be tempted in the right circumstances. We often hear about the big cases with a company raiding multiple HOAs (I think there's a big kerfuffle in Florida right now), but we may not hear about the "penny ante" cases where a single person pilfers a relatively small amount from their association. I suspect the latter group is more common and that they wouldn't necessarily show up on a background check.

So doing background checks may give you a false sense of security.

If you don't use a property management company, where there are often multiple sets of eyes on your records, it can be tempting to trust good ol' Joe down the street since you see the guy all the time. Trust but verify. All the board members should review the monthly financials, not just the treasurer. And ask questions if something doesn't make sense. Your treasurer may resign without warning and someone else may need to step in - better that the person knows what's going on.

Check your CC&Rs to see what they say about insurance. We are required to carry fidelity/employee dishonesty insurance, and the amount is dependent on how many dollars are under the HOA's control (reserves plus operating accounts plus annual assessments).

Also check your bylaws. We're required to have an annual audit of our books, and even if it's not required it's a good idea.

With regards to Board members, your CC&Rs and by-laws likely do not give the option to remove someone from the Board due to a finding on a background check, so it's rather pointless to run them on Board members.

FALSE..
FALSE..FALSE..FALSE..FALSE..FALSE..

Show me Max where a HOA counts as needing social security numbers? HOA are not utilities or credit companies. They do not need social security numbers of any member. I would never ever provide them one.

Does not mean it is legal because they do it. CC&R's are exclusive to the HOA it is not a real world standard.

So do you Max... Landlords can have SS#'s but HOA's have no need. The landlord is to submit that they did the checks. It's NOT the HOA's job to do them. They have no relationship to the Renters.

HOA's are NOT a debtor that requires a Social Security # to be provided. If you give them yours that is all on you. As for me, there is no way on God's green earth my HOA will ever see my SS# or those of my tenants.

Can I have your social security number? I am in a HOA so that qualifies me to have it. Does not mean have to be in yours.

It makes no sense to hand over your social security number to your neighbors now does it?

What Max? You won't give me your Social Security number? Why??? Wait what if I was a board member on your HOA board would you give someone like me your number? This is REALITY. No way.

We don't do background checks on our homeowners, but every renter has to be cleared by a background check program and part of the application includes asking for their social security number. We purchased a condo in a large community near us and they did do a background check on us as buyers (used the same program we use here) and we had to provide our social security numbers. The application and results are on file with the condo association. Our tenant also had to be background checked.

I don't think the answer is clear. In most HOAs/COAs the association has nothing to do with the tenants and should not be using association funds to support landlords' money-making activities. Any smart landlord will run background checks, it's part of the cost of doing business.

But there are communities where the association does get involved in rental activities and has a vested interest in the outcome. It would make sense for the association to pay at least part of the cost of the background check, maybe even all of it, since the checks are one of the association's normal business activities.

In our association the tenant pays for the background check. I paid for the background check when we bought the condo. I realize this is different than getting background checks on board members, which I would definitely not be in favor of spending association money on.

Does your declaration bar those with criminal records from living in the community?

I agree. From my reading HUD contends that a blanket prohibition on anyone with a felony record is unlawful under the Fair Housing Act. AFAIC I think there are good and bad reasons for this interpretation of the FHA. Either way, HUD is ready to take on any HOA/COA that has such a blanket prohibition. Regardless of the merits of HUD's position, I believe facing down HUD in such a lawsuit would be expensive.

I believe HUD has also advised that any HOA/COA prohibitions that spell out specific, limited felonies that disqualify ownership may very well be lawful.

I wondered that too.

Who decides what crimes prevent a person from moving into the community?

The CC&Rs do, possibly overridden by state or federal laws.

My community's Declaration has a restriction barring Tier 2 and Tier 3 sexual offenders from living in the community. They can own homes, they just can't live here.

In our case this is overkill, since there is a daycare center adjacent to our property and three grade schools within a 1-1/2 mile radius of us. So state law would keep these offenders out regardless of what our CC&Rs say.

Based on what I've read, sexual offenders are a special case because of the high recidivism rate and the nature of the harm they do. They're different from those who commit white collar crimes, for example, and who "pay their debt to society" and go on with their lives. Information about the whereabouts of convicted sexual offenders is often available through local law enforcement and the like, so the presence of an offender in a community can depress sales and property values.

It's possible that laws can change around the treatment of ex-felons, but given the existence of so many state laws named in honor of a child who was killed by a sexual predator, I suspect that CC&Rs restrictions keeping these folks out won't be struck down any time soon.

I overlooked the original post was about background checks on board members. The discussion morphed into homeowners so that is why I chimed in.

California can disqualify a candidate if the nominee would pose a threat to obtaining or maintaining insurance for the association.

§5105 (c)(4)

(4) An association may disqualify a nominee if that person discloses, or if the association is aware or becomes aware of, a past criminal conviction that would, if the person was elected, either prevent the association from purchasing the insurance required by Section 5806 or terminate the association’s existing insurance coverage required by Section 5806 as to that person should the person be elected.

An association shoukd do their due dilligence.