Co-ops and condos operate on significant budgets, usually in the hundreds of thousands of dollars,
sometimes well into the millions, and it falls to those who serve on these properties' boards to control all that money. One way they do it is by hiring professional management firms to handle the ebb and flow of their properties' financial assets. It behooves boards to educate themselves about effective systems and procedures that can ensure, to the greatest degree possible, that their property's financial assets are handled properly, and that the opportunity for untoward financial activity is minimized.
Who Signs the Checks?
In most cases properties hand over the responsibility for overseeing their financial assets to professional management. With this responsibility comes the authority to make purchases, write checks, reconcile bank accounts and sometimes even to make investment decisions. So boards are well-advised to ascertain how their properties' assets are protected within the operation of their management company.
Who signs a property's checks is very important. In some property management companies, like Manhattan-based Heron, Ltd., a company principal first reviews and then signs all approved checks. At MGRE, a management company based in Port Washington, dual signatures by officers of the company and the property are required unless the board has made different arrangements, such as the stipulation that management alone can sign all standard, non-discretionary checks (e.g. real estate taxes, utilities, etc.), and discretionary checks up to a pre-set limit established by the board, above which a board signatory also must review and sign the check.