Trust Account – Safekeeping the Funds of Home Owner Associations
The home owner association (HOA) of a housing estate regularly pays condominium fees into a bank account set up by the estate manager for the purpose. One of the eligible account types is the trust account. The distinguishing feature of a trust account, also called escrow account, is that the account manager does not actually own the money in the account. This has a specific significance for home owner associations: The home owner association itself is the account holder, and is clearly identifiable as owner of the cash in the account. At the same time, the manager of this selfsame HOA has access privilege for the purpose of covering the HOA's running costs. A trust account is thus a good way of safekeeping the funds of home owner associations. If an estate manager becomes bankrupt or passes away, there is no way for the manager's receiver or heirs to draw on the account. Aside from estate agents, trust accounts are also frequently set up by attorneys and notaries on behalf of their clients.
An alternative to the trust account would be a third-party custody account. Under this type of account-keeping, a certain person manages the money of other persons in their name. The account holder is the only person authorised to draw on the account. Please note: Unlike with the trust account, a third-party custody account is subject to the risk that money could be misappropriated or become part of the manager's estate upon his demise.
Whether Prior to an Acquisition...
Even ahead of an acquisition, the Accentro Real Estate Encyclopaedia offers interesting facts and decision guidance: We will coach you through the first steps on your path to homeownership. For instance, it provides information on the process flow of a condominium purchase. It will also tell you what sort of documents you need in order to buy property, and where to obtain them.
... or after – Our Real Estate Encyclopaedia Provides the Answers You Need
Once you have bought a property, you may wonder who is going to manage your condo and how. After all, caretaking your property is one of your main obligations as a condominium owner. In addition to numerous tips and suggestions, you will find answers here to many questions involving the property management subject, such as: What does “individual freehold ownership” mean? What exactly do “condominium regulations” govern? And what does the term “condominium fee” imply? In addition, we elaborate subtle differences between terms such as “real estate management” and “corporate real estate management.”
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