Home / Columnists / Kass / KASS: Building manager has bank accounts      

KASS: Building manager has bank accounts      

Q:   I am a trustee of a 10-unit condo association, which hired a new building manager. When the outgoing manager received the separation letter, he claimed that owners didn’t support the decision and that he wasn’t going to leave the job. He refused to turn over the keys, files and bank accounts. Although he was told the change was uncontested, he would not relent so a cease and desist was sent to enforce the change. He replied that he had an attorney to fight it. The attorney is his wife and co-owner of the real estate business. In the mean time, the outgoing building manager is the only one with oversight of our bank accounts. I went to the bank with copies of 1) the notarized statement filed with the registry of deeds to prove I am a trustee and 2) our declaration of trust, which states that trustees have fiduciary oversight. I explained our concern about the manager being fired and still having sole oversight of our accounts. The bank claimed it needed additional documents but couldn’t explain what they were. The old manager hasn’t shown us an actual bank statement in at least two years, which is concerning.

We’re in a tough situation. No owner recommended the old manager when we considered a replacement. The trustees unanimously voted to remove the outgoing manager and hire the new one, so there is no dissent amongst owners, as the old manager suggests. What can be done to get our files and keys, and access to our bank accounts?   We’re afraid that if we try to bring the cease and desist, the outgoing manager will use the legal system to cause additional expense and delays. In the interim, the fired building manager is the only one who has control over our finances. And, he has keys to our apartments. It goes without saying that going forward we will add trustees as co-signors to the bank accounts. Until then, we’re in need of help with these two issues. Sarah.

A:   For my readers, in Massachusetts, the Board of Directors are called Trustees. Sarah, get a good attorney. From the facts you presented, I suspect you will prevail. What does your management contract say? Many such contracts gives the board (trust) the absolute right to cancel for any reason on 30-60 days notice. If, as you say, the decision was unanimous, what are you afraid of? And keep in mind, as a trustee (director) you have a fiduciary duty to all the owners to protect the associations funds.

Yes, absolutely. Every association should have a policy that for expenses over a certain amount, say $2500, at least one board member should co-sign with management. And management should not be on the reserve account(s); two board members should be required if withdrawals need to come from reserves.

One more suggestion: get the local newspaper involved. The white light of truth is often effective.

Leave a Reply

Your email address will not be published. Required fields are marked *



%d bloggers like this: