DEAR BENNY: I have just been elected president of my 200-unit condominium association and have heard that some property managers throughout the country have embezzled association funds. How can we protect ourselves and our money? –Fred

DEAR FRED: First, most property managers are honest and hard-working. Unfortunately, as in every walk of life, there are bad apples, and one such apple casts a negative spell against all such managers.

I would immediately talk with your association attorney, your property manager and your insurance agent. Each will be able to provide you with information that will assist your association in securing its funds.

Here are some suggestions I have developed over the years, especially since I have represented two associations whose property managers stole their money.

• Check out the property manager carefully. Perhaps you should even obtain credit reports on the firm (and the property manager who will be servicing your project); this will, of course, require the permission of the manager, but they should not object if they want your business.

• Keep control of your funds. Generally speaking, there are two pools of moneys in community associations: operating accounts and reserve accounts.

Regarding the operating account, set a dollar figure above which the property manager will need the co-signature of at least one board member on all checks going out of that account. This will, of course, create a burden on both the property manager and the board member who has to sign checks. But, in my opinion, if you want to serve on the board, you should be willing to assume those responsibilities, which will protect the funds belonging to you as well as the unit owners who elected you.

Clearly, there are routine checks that have to be paid on a monthly basis — such as water bills, insurance, and trash collection. If you set a dollar limit based on your monthly needs, the property manager can write checks up to that amount without a second signature. But any checks over that limit must be co-signed by at least one board member. Your bank will give you signature cards and these signature requirements should be spelled out in those documents. Then, the bank will have to honor your request.

Regarding the reserve accounts, they should be in the name of the association only, and only board members should be authorized to sign checks (or transfer funds) from those accounts. If you visit website you will understand how the community associations do not transfer moneys often from reserve accounts; it should not be a hardship on anyone to require that only board members be authorized to have access to those funds.

• Make sure the property management company has adequate insurance covering your association in the event of embezzlement, fraud or other activities that may cause your association a loss. The insurance industry will write “third-party-coverage” bond insurance, which will give you protection in the event of a loss. The amount of the policy will, of course, depend on the amount of the reserves you anticipate you will carry. Some associations have hundreds of thousands of dollars in reserve; clearly, third-party coverage in the amount of $50,000, for example, is woefully inadequate for those associations.

• Ask if the management company has a fidelity bond in place to cover any loss created by its employees. If they do, your association must be named as an additional insured.

• Make sure that you (and not the property manager) hire an accounting firm to give you a full audit or review each and every year. Your association should give a letter of engagement to the accountant, and the accountant should report back to you — and not the manager.

• Make sure that your funds (operating and reserves) are in separate bank accounts in the name of the association. It is absolutely wrong for a property manager to co-mingle funds with other associations, or even with their own bank accounts.

• Perhaps most importantly, insist that the property manager give you and your board members a monthly financial status report, which will include copies of the actual bank statements received by the management company. But, your president or treasurer should also receive a copy of the monthly (or quarterly) bank statement directly from the bank. In the past, those property managers who embezzled money were creating false bank statements on their computer. In one case, although the manager left the association with only $2,000, every month he created a bank statement showing more than $80,000.

I do not believe that property managers will object to the various suggestions I have made, and indeed may have more recommendations of their own.

Community association board members have the power to control as best they can the financial security of association funds, and steps should be implemented immediately while it is not too late.

DEAR BENNY: My husband and I were in Las Vegas and made a horrible mistake in sitting through a time-share presentation so that we could obtain half-price tickets to a show. The presentation was at an office on the Strip.

Unfortunately, I did not research the company before the presentation. The salesman gave only his first name and had no business card; that should have been a clue about the company.

Anyways, he started talking about the time shares at a Vegas hotel, which was running about $52,000 for a two-bedroom. Since we were not interested, the sales manager came out and said there was an issue with our tickets.

While waiting for the tickets, the sales manager starting talking to us about a resale/foreclosure unit at another Vegas hotel.

The cost for a two-bedroom was significantly less, even though it was considered biannual usage. The rest is history as to what happened that afternoon. Later that evening, we found the same two-bedroom unit for $7,000 cheaper and another on eBay for $1.

In addition, we researched the company and found hundreds of unhappy time-share owners. We also read that a class-action lawsuit was filed against the company in November 2011. We immediately sent a rescind letter, while we were still on vacation. We even called the salesman the next day and he told us that “they never cancel.” At that point, we knew we were scammed.

We just received a letter from the company in which they repeated that we are “not the owner/seller of the time-share interest but rather we are an authorized agent acting on behalf of the owner/seller with respect to the resale of the timeshare interest.” Therefore, we are unable to cancel the purchase agreement since the statutory right of rescission applies only to developer sales. Since the purchase is a resale by a nondeveloper owner, the buyer has no contractual or statutory means to cancel the agreement.

Our question to you is whether the company as an authorized agent on behalf of the owner/seller is obligated to tell the buyer that the sale is final and that you are unable to cancel the purchase agreement. While we were finalizing the paperwork, they made sure we initialed the floor plan for the unit. Never did they have us initial any document that we could not cancel the contract nor did they volunteer this information.

The majority of people who attend the time-share presentations are not familiar with real estate law and haven’t even purchased a resale/foreclosure. Does the buyer have any rights to cancel a contract? Is there even a cooling period? Are we stuck with the time share? Shouldn’t we receive some document that we are unable to cancel the purchase agreement? –Thomas

DEAR THOMAS: I have deleted the name of the time-share company that you dealt with, so as to avoid any back-and-forth responses with that company. But if you go to the Web and type in “time share scams” you will find a large number of websites.

I can’t provide legal advice, but suspect that the company carefully complied with existing laws. It has lawyers on retainer who will do their best to keep the company from doing something illegal. Some states provide rights of rescission; others do not. The sale may fall under the federal Interstate Land Sales Full Disclosure Act, which does give you the right to cancel after you sign a contract; but again, your attorney will have to provide you the specific answers to your specific transaction.

However, you got caught because you wanted something free — those Vegas tickets. Florida Attorney General Pam Bondi has posted a number of ways to protect oneself from time-share fraud, and a couple are as follows: (1) be wary of the hard sales pitch; and (2) be wary of too-good-to-be-true claims when it comes to resales.

My suggestion: Don’t make any payments. If you made the mistake of authorizing direct deductions from your banking account, stop that immediately. If you used a credit card to make a deposit, demand that your credit card company cancel the transaction. They will investigate and may be able to help you.

But the bottom line is: Please do not fall for those fast-talking salespersons who promise you the moon. I can assure you that you won’t even get a single star.