Top 10 Lessons Learned From Multivest

Many of you belong to associations that dealt with MultiVest Management, Inc., and are currently involved in litigation regarding your bank accounts. While one of the alleged perpetrators is currently serving a prison sentence for the wrongs committed, many associations have lost thousands of dollars that have not yet been recovered. The following are the Top 10 Lessons Learned from MultiVest:

1) Make sure that board members are the signatories on your bank accounts. If a property manager has signing rights, make sure a board member is also required to sign all checks.

2) Ensure that the board members physically go to the bank and sign signature cards. We discovered in pending litigation that board members signed signature cards, but they were never given to the bank by the property manager.

3) Make sure that board members only (at least 2) are signatories on reserve or savings accounts.

4) Make sure the association’s bank accounts are not eligible for online banking.

5) Make sure that both the property manager and the board’s treasurer receive account statements directly from the bank.

6) Verify interest rates and fees directly with your bank. Inflated interest rates prevented many associations from switching banks and realizing a problem sooner.

7) Make sure that the association has adequate insurance to protect it from fraud, embezzlement, or other activities that may cause money loss.

8) Make sure that your property manager has adequate insurance to protect the association from fraud, embezzlement, or other activities that may cause money loss. This amount should be at least equal to the monetary amount in your association’s accounts.

9) Request a monthly financial report from your property manager. Have the treasurer match this report with the bank statements.

10) Hire a CPA to do annual audits.

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