Is the management company of a condo development in CA required to have fidelity bond coverage?

Fannie Mae rules introduced in late 2009 indicate that associations with 20 or more unit are required by regulation to have fidelity bond coverage as part of the association's insurance program.

All Management companies should have a fidelity bond. If your condo development is NOT self managed, and has contracted with a management company, there should be a fidelity bond in place. Most Governing documents will have a requirement for bonding and insurance of those responsible for handling the community's funds. In fact most states have a statutory requirement that the minimum amount of the fidelity bond be equal to the maximum amount of money that could be stolen. That would be the maximum amount of money on deposit in all the bank accounts of all associations the management company is managing. ~ Bert Carpenter, The LoansA2z team of NOVA Home Loans ~ NMLS 40586 ~ www.LoansA2z.com

Per Fannie Mae, yes.. Fidelity bond coverage is insurance designed to protect against theft or embezzlement by employees, directors, management personnel, or others who might have access to association funds. So the HOA has to have it but more importantly, so does the management company.. WilliamAcres.com