FINANCIAL SERVICES AGREEMENT - HOA Financial …

1 C:\DOCUMENTS AND SETTINGS\EHERNANDEZ\LOCAL SETTINGS\TEMPORARY INTERNET FILES\ \2 PMHCUH6\ FINANCIAL AGREEMENT - REVISED 1 FINANCIAL SERVICES AGREEMENT THIS AGREEMENT ( AGREEMENT ) is entered into on this day of 20 between (Association) and , a California Corporation (Agent). Association hereby appoints Agent, and Agent hereby accepts appointment, on the terms and conditions set forth in this AGREEMENT . 1. ROLE OF AGENT Agent shall assist the Board of Directors by providing FINANCIAL SERVICES to the Association and those persons who are members of the Association as an independent contractor.

2 The membership of the Association consists of units or lots. All SERVICES shall be performed by Agent based upon standards prevailing in the industry. 2. RESPONSIBILITIES OF THE AGENT A. Accounting SERVICES will include the following: 1. Assisting the Board of Directors in the preparation of an Annual Budget for the approval of the Directors at least 60 days prior to the end of the fiscal accounting year. 2. Preparation and distribution of a Balance Sheet, Statement of Cash Receipts and Disbursements, Check Register, Delinquency Report and Bank Reconciliation to all Directors each month.

3 3. Payment of all bills authorized to be paid by the Board of Directors. 4. Mailing monthly invoices for assessments including any late charges or special assessments. 5. Distributing to all members the Annual FINANCIAL Reports. 6. Preparing and mailing delinquency notices, in accordance with the Association s collection policy. 7. Recording liens in accordance with the Association s collection policy and working with legal counsel when necessary to assist in collections. Agent does not guarantee the collection of accounts receivable, but agrees to use its best efforts to do so.

4 Agent is authorized to sign as agent all liens authorized by the Association. 8. Providing the Association s accountant with the data necessary to prepare tax returns, audits or reviews. Agent is authorized to sign as agent all tax returns to be filed by Association. C:\DOCUMENTS AND SETTINGS\EHERNANDEZ\LOCAL SETTINGS\TEMPORARY INTERNET FILES\ \2 PMHCUH6\ FINANCIAL AGREEMENT - REVISED 2 9. Funding reserve accounts each month as determined by the Annual Budget unless funds are not available. Agent shall have no authority to authorize withdrawals from the Association s reserve accounts and Association s Board of Directors shall make all investment decisions regarding reserve funds.

5 10. Preparing and filing Federal Forms #1099 as required by law. Agent shall utilize generally accepted accounting practices including the double entry method of accounting. After the Effective Date of this AGREEMENT , Agent shall consolidate the most current balance sheet and income/expense statement provided to Agent for the current fiscal year with FINANCIAL reports to be generated by Agent. Association agrees to provide Agent with copies of all guarantees and/or warranties pertinent to the construction and/or maintenance of the Property and Agent agrees to review them.

6 B. Meetings: 1. Preparing and mailing notices, nomination forms, ballots and agendas when requested by the Board of Directors. 2. Attending the annual meeting of homeowners on dates that are mutually acceptable. Attendance at meetings exceeding _____ hours each, shall require additional compensation. See additional charges. C. Records and Correspondence: 1. Maintaining all FINANCIAL records of the Association and its individual members. Unless otherwise instructed in writing by the Board of Directors, Agent shall destroy any records more than four (4) years old (other than warranties), except that all records shall be maintained for the first twelve (12) years after recordation of the original CC&Rs.

7 2. Recording changes of ownership upon receipt of advices from members and escrow companies when submitted with supporting documentation. Agent shall not be required to search the public records to determine changes in ownership. 3. Responding to inquires from escrow holders and/or mortgage lenders regarding the status of accounts and providing them with proof of insurance, copies of all Association documents, including, but not limited to, budgets, operating reports, reserve studies, minutes, and any required certifications forms.

8 4. Maintaining complete files of all correspondence and handling all correspondence for the Board of Directors pertaining to business matters and collections, not including violations of the CC&R s/Operating Rules. D. General Responsibilities: 1. Mailing policy statements to all members annually, describing the Association s policies and practices concerning late fees, liens, collections, foreclosures and fines. C:\DOCUMENTS AND SETTINGS\EHERNANDEZ\LOCAL SETTINGS\TEMPORARY INTERNET FILES\ \2 PMHCUH6\ FINANCIAL AGREEMENT - REVISED 3 2. When authorized and directed by the Board of Directors in writing, Agent will request coverage from the insurance agent or broker as determined by the Board.

9 3. Assisting the Association in making insurance claims when requested by the Board of Directors. 4. Unless otherwise directed by the Board of Directors, Agent shall enforce the Association s Late Charge, Lien and Collection Policy in accordance with California law. Agent shall not be responsible for acts, omissions or occurrences which took place prior to the Effective Date of this AGREEMENT . 3. AGENCY RELATIONSHIP Association hereby gives Agent the authority to perform all acts necessary to carry out Agent s responsibilities. All acts performed by Agent shall be done as Agent of the Association and any and all obligations, costs or expenses incurred by Agent in performance of its obligations under this AGREEMENT shall be borne by Association and not by Agent.

10 All payments made by Agent hereunder shall be made out of accounts held in the name of Association. Agent is not expected to use its own funds in payment of any expenses pertaining to the Property. Legal advice, the filing of tax returns, litigation management and construction management / supervision are not included in the SERVICES provided by Agent under this AGREEMENT . Association agrees that city license or registration fees shall be paid current by Association, if any. The Board of Directors of the Association shall make the final selection of all contractors who shall be required to carry workers compensation insurance and comprehensive liability insurance of at least $500,000.