Bill Summary for H 793 (2013-2014)

Summary date: 

Apr 15 2013

Bill Information:

View NCGA Bill Details2013-2014 Session
House Bill 793 (Public) Filed Wednesday, April 10, 2013
A BILL TO BE ENTITLED AN ACT PROVIDING THAT CERTAIN CONDOMINIUM AND PLANNED COMMUNITY ASSOCIATIONS SHALL OBTAIN AND MAINTAIN A FIDELITY BOND INSURING THE ASSOCIATIONS FROM LOSSES RESULTING FROM THEFT OR DISHONESTY COMMITTED BY MEMBERS OF THE EXECUTIVE BOARD OR PERSONS EMPLOYED BY THE ASSOCIATIONS, PROVIDING THAT ANY MANAGEMENT AGENT OR COMPANY HIRED BY AN ASSOCIATION SHALL AT ALL TIMES BE COVERED BY A FIDELITY BOND, AND PROVIDING FINANCIAL AUDIT REQUIREMENTS FOR ASSOCIATIONS.
Intro. by Saine, R. Moore.

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Bill summary

Amends GS Chapter 47C (North Carolina Condominium Act) and GS Chapter 47F (North Carolina Planned Community Act), providing that associations or unit owners' associations that have annual assessments for common expenses of $100,000 or more must obtain and maintain a fidelity bond that insures the association against losses resulting from theft or dishonesty by the officers, members, or employees of the association. Coverage will be in the amount of at least $1 million and the bond will be obtained on behalf of the association by the executive board.

Provides that management agents or companies hired by an association or unit owners' association must be covered at all times by a fidelity bond. Sets out the process to determine who is a management agent or company for the purposes of this section. Provides that a management agent or company is any person who, for compensation or the expectation of compensation, performs two or more of six specified activities, including preparing budgets, financial statements, or other financial reports for an association or unit owners' association or collecting, disbursing, or otherwise exercising dominion or control over money or other property belonging to an association or unit owners' association. Coverage provided must be at a minimum of $1 million and the bond is required to comply with specified conditions, including but not limited to, being written by an insurance company authorized to write fidelity bonds in North Carolina, covering the association's or unit owners' association manager and all or a portion of the employees, and protecting all or a portion of the association funds in custody of the manager or employees.

Provides that an annual independent financial audit will be required if the association or unit owners' association has annual assessments for common expenses of $250,000 or more. The audit, if required, must be completed no later than one year after the end of the association's fiscal year and will be made available to unit or lot owners within 30 days after its completion.

Makes conforming changes to the applicability section of GS Chapters 47C and 47F.

Effective July 1, 2013.

 

 

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