HOA or Condo Association Employee Theft POSITION SCHEDULE ($50,000) Bond - Statewide in California
Table of Contents
Brief Summary
A position schedule bond puts $50,000 of employee theft protection behind each named job in your association, such as treasurer or bookkeeper. Before you buy, add up your reserves and three months of assessments. California sets that total as the minimum coverage an association must carry, so check that this schedule gets you there.
California Civil Code 5806 requires every common interest development association to carry fidelity bond coverage for its directors, officers and employees. Unless the governing documents require more, coverage must equal at least the association's reserves plus three months of total assessments. This position schedule bond covers each listed position up to $50,000, with the association as the protected party.
We can help with all California bonds!
How to Apply for an HOA or Condo Association Employee Theft POSITION SCHEDULE ($50,000) Bond:
- Calculate the association's reserves plus three months of total assessments to find the minimum coverage under Civil Code 5806.
- Check the CC&Rs and bylaws for any higher coverage amount.
- List the positions to be scheduled, such as treasurer, bookkeeper or community manager.
- Provide the association's legal name and basic financial information for underwriting.
- Complete the application, review the quote and pay the premium.
- Keep the executed bond with the association's insurance records and recheck coverage each budget year.
Detailed Information About the California HOA or Condo Association Employee Theft POSITION SCHEDULE ($50,000) Bond:
What the law requires
Before 2018, California did not make homeowners associations buy fidelity coverage. AB 2912 (Irwin, Chapter 396, Statutes of 2018) changed that. Civil Code 5806 now says that unless the governing documents require a greater amount, an association must maintain fidelity bond coverage for its directors, officers and employees in an amount equal to or more than the combined amount of its reserves and total assessments for three months.
That floor moves with your budget. An association holding $400,000 in reserves and collecting $60,000 a month in assessments needs at least $580,000 of coverage. Recheck the number whenever reserves grow or the budget changes.
How a position schedule works
A position schedule bond lists job titles rather than people. Whoever holds a listed position, such as treasurer, bookkeeper or community manager, is covered up to the stated amount for that position. On this bond each scheduled position carries $50,000. If an employee or officer in a covered role steals association money, the association files a claim with the surety and recovers its loss up to that limit.
Does $50,000 per position satisfy the statute?
That depends on your numbers. Smaller associations with modest reserves may find a schedule like this covers them. Larger associations will usually need higher limits or a blanket policy to reach the reserves plus three months figure. Your CC&Rs or bylaws may also set a higher amount, and that controls when it is greater. Have the board or your manager compare the coverage to the current budget before the bond is issued.
Who is the obligee
The association itself is the protected party. Nothing is filed with a state agency. The board keeps the bond with its insurance records and should be ready to show it to members, lenders and auditors.
Eligibility and Requirements for a California HOA or Condo Association Employee Theft POSITION SCHEDULE ($50,000) Bond:
- Coverage for directors, officers and employees, as Civil Code 5806 requires.
- Total coverage at least equal to reserves plus three months of assessments, or more if governing documents demand it.
- The association named as the obligee and protected party.
- Positions on the schedule matching the roles that actually handle association funds.
- Premium based on the coverage amount, the number of positions and the association's financial controls.
California HOA or Condo Association Employee Theft POSITION SCHEDULE ($50,000) Bond FAQs:
No. Since AB 2912 took effect, Civil Code 5806 requires associations to carry fidelity bond coverage for directors, officers and employees in at least the amount of reserves plus three months of total assessments, unless the governing documents require more.
The bond covers named job titles rather than named people. Whoever fills a scheduled position is covered up to that position's limit, which is $50,000 here. If a new treasurer is elected, coverage follows the role.
Only if it reaches your statutory minimum. Add your reserves to three months of assessments. If the result is higher than the coverage this schedule provides, you need higher limits or additional coverage.
The association keeps it. It protects the association's own funds, so there is no state filing. Members and lenders may ask to see proof of coverage.
