Sec. 20-460. Fidelity bond required. Bond requirements. Payment of cost of bond. - Connecticut Statutes

      Sec. 20-460. Fidelity bond required. Bond requirements. Payment of cost of bond. (a) No person who provides association management services under the provisions of sections 20-450 to 20-462, inclusive, shall control, collect, have access to or disburse funds of an association unless, at all times during which the person controls, collects, has access to or disburses such funds, there is in effect, a fidelity bond complying with the provisions of this section.

      (b) The fidelity bond referred to in subsection (a) of this section shall: (1) Be written by an insurance company authorized to write such bonds in this state; (2) except as provided in subsection (c) of this section, cover the maximum funds that will be in the custody of the community association manager at any time while the bond is in force, and in no event be less than the sum of three months' assessments plus reserve funds; (3) name the association as obligee; (4) cover the community association manager and all partners, officers, employees of the manager and may cover other persons controlling, collecting, having access to or disbursing association funds as well; (5) be conditioned upon the persons covered by the bond truly and faithfully accounting for all funds received by them, under their care, custody or control, or to which they have access; (6) provide that the insurance company issuing the bond may not cancel, substantially modify or refuse to renew the bond without giving thirty days' prior written notice to the association and the department, except in the case of a nonpayment of premiums, in which case ten days' prior written notice shall be given; (7) contain such other provisions as the department may, by regulation, require.

      (c) The fidelity bond of a person who is employed full-time by and provides association management services to an association of a common interest community, or to a master association as defined in section 47-239 exercising the powers on behalf of one or more common interest communities or for the benefit of the unit owners of one or more common interest communities, which community or communities were established prior to July 3, 1991, and have more than two thousand four hundred residential units, shall be in an amount which is not less than one-half the amount specified in subdivision (2) of subsection (b) of this section.

      (d) The community association manager shall furnish a certificate of each bond required under this section, and every renewal or replacement thereof, on or before the date on which he commences providing association management services requiring a bond to any association or prior to the expiration of any prior bond furnished under this section.

      (e) Unless otherwise provided for in a written agreement between the community association manager and the association pursuant to subsection (f) of this section, the cost of the bond shall be paid for by the community association manager.

      (f) If, as of October 1, 1990, any community association manager is providing association management services, including the handling of funds, or has entered into an agreement to provide association management services including the handling of funds, and has no written agreement, concerning which party shall pay the cost of fidelity bonds, the cost of the bond shall be paid for in accordance with the declaration and bylaws of the association, and if the declaration and bylaws contain no such provision, the cost of the bond shall be paid one-half by the community association manager and one-half by the association unless the parties otherwise agree in writing.

      (g) A separate bond shall be furnished for each association for which a community association manager provides association management services including the handling of funds.

      (P.A. 90-306, S. 12, 15; P.A. 91-341, S. 11, 19.)

      History: P.A. 91-341 amended Subsec. (b)(1) and (6) to replace "surety" with "insurance company", amended Subsec. (b)(2) to add "except as provided in subsection (c) of this section", amended Subsec. (b)(6) and (7) to replace "association management commission" with "department" and inserted a new Subsec. (c) permitting a bond in a lesser amount when the person is employed full-time by and provides association management services to certain associations, relettering the remaining Subsecs. accordingly.