Effective January 1st, 2008, property managers who serve Illinois community associations are subject to regulation. The regulation appears to be quite limited: Managers must have a knowledge of the Illinois statute on condominiums and a "working knowledge" of community association management. If they handle homeowner money, they must have a fidelity bond, and not co-mingle funds. Community association officers and directors and employees who handle money must also be covered by the bond.
Theft of homeowner funds is not, unfortunately, very rare. There have been some major thefts by managers across the country, this year; a Madison property manager went to prison recently. A Milwaukee lawyer stole from an association and went to prison about 25 years ago. These things happen: If the guy looked like a thief, you wouldn't let him near your money in the first place.
The two primary ways to defend yourself:
- Carry a bond like the one described in the Illinois statute;
- Ask your accountant to recommend controls and then institute them.