$5.8M Miami HOA fraud: ask about your association's bond

Six people, including a property manager, are accused of siphoning roughly $5.8 million from five Miami-Dade condo and homeowner associations over about five years, according to the Daily Mail. Investigators describe a web of vendors, management companies, and invoices for work that was never done. The allegations have not been tested in court.

Money stolen from an association is not something your own condo policy pays for. The coverage that responds is the association's fidelity bond, sometimes written as crime coverage, which pays when a person who controls association funds takes them. Florida generally requires associations to carry it. The catch is the limit, which often gets set once and never revisited, so it can end up a fraction of what actually moves through the operating and reserve accounts. Ask your board two questions at the next meeting: what the fidelity bond limit is, and how it compares to the balances someone could reach.

An independent agent can read your association's crime and fidelity limits against your own HO-6 and show you where the gaps sit.