HOA or Condo Association Employee Theft POSITION SCHEDULE ($250,000) Bond - Statewide in California

Brief Summary

Boards often pick a limit by habit. California law sets a floor instead: reserves plus three months of assessments. If that number is $250,000 or less, this position schedule bond at $250,000 meets the statute for the positions it names and gives the board a documented answer when members or lenders ask about theft coverage.

California Civil Code 5806 requires every common interest development association to carry crime insurance, employee dishonesty coverage, fidelity bond coverage or the equivalent for its directors, officers and employees. The minimum is the combined amount of the association's reserves and total assessments for three months, unless the governing documents require more. This bond provides $250,000 of employee theft protection on a position schedule, covering whoever holds each listed position.

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How to Apply for a HOA or Condo Association Employee Theft POSITION SCHEDULE ($250,000) Bond:

• Calculate the Civil Code 5806 minimum: current reserves plus total assessments for three months.
• Check the CC&Rs and bylaws for any higher required amount.
• List each position to be scheduled, including every role that signs checks or moves funds.
• Provide the association's legal name, number of units, most recent budget and reserve balance.
• Identify the management company, if any, so its dishonest acts can be covered or endorsed.
• Complete the application, review the premium and have the board approve the bond.

Detailed Information About the California HOA or Condo Association Employee Theft POSITION SCHEDULE ($250,000) Bond:

Check the $250,000 against the statutory floor

Civil Code 5806 does not set a flat number. It requires coverage equal to or more than the association's reserves plus total assessments for three months. Add the current reserve balance to three months of assessment income. If the total is $250,000 or less, a $250,000 limit satisfies the statute. If the governing documents call for a higher amount, the governing documents control.

What the statute requires the coverage to include

• Directors, officers and employees of the association
• Protection in an equal amount against computer fraud and funds transfer fraud
• Dishonest acts by the managing agent or management company and its employees, if the association uses one

Section 5806 also states that self insurance does not meet the requirement. An association cannot satisfy it by setting money aside.

How a position schedule works

A position schedule bond lists offices or job titles, such as treasurer, president or community manager, rather than named individuals. Whoever holds a scheduled position is covered while in it. When the board turns over after an election, coverage follows the seat and no one has to be added by name. Positions that are not on the schedule are not covered, so the schedule should match every role that handles or can move association money.

What the bond pays

If a person in a scheduled position steals from the association, the association can recover its loss up to the $250,000 limit. The protection runs to the association and its members.

How premium is set

The surety prices the bond from the limit, the number of scheduled positions, the size of the association's reserves and assessment income, and its financial controls, such as dual signatures, independent review of bank statements and whether a management company handles funds.

Before you bind

Confirm the coverage wording meets every element of Civil Code 5806 and any higher amount in your governing documents, and confirm with your management company whether its employees are endorsed onto the bond.

Eligibility and Requirements for a California HOA or Condo Association Employee Theft POSITION SCHEDULE ($250,000) Bond:

• Coverage for directors, officers and employees under Civil Code 5806.
• A limit at least equal to reserves plus three months of assessments.
• Equal protection against computer fraud and funds transfer fraud.
• Coverage for dishonest acts by any managing agent or management company and its employees.
• No reliance on self insurance to meet the requirement.

California HOA or Condo Association Employee Theft POSITION SCHEDULE ($250,000) Bond FAQs:

Official and Additional Resources for the California HOA or Condo Association Employee Theft POSITION SCHEDULE ($250,000) Bond: