Mississippi Code 1972 (2023) › Title 79 - CORPORATIONS, ASSOCIATIONS, AND PARTNERSHIPS (§§ 79-1-1 — 79-37-604) › Chapter 11 - NONPROFIT, NONSHARE CORPORATIONS AND RELIGIOUS SOCIETIES (§§ 79-11-1 — 79-11-NEW) › CHARITABLE GIFT ANNUITIES (§§ 79-11-651 — 79-11-NEW) › Section 79-11-751 - Deposit of homeowners association funds by managing agent into trust fund; deposit of homeowners association funds into checking or interest-bearing accounts under certain circumstances; recording of receipt and disposition of funds; commingling of managing agent's money with association funds prohibited; definitions

(1)
A managing agent who accepts or receives funds belonging to a homeowners association shall deposit those funds that are not placed into an escrow account with a bank or savings association or into an account under the control of the association, into a trust fund account maintained by the managing agent in a bank or savings association. All funds deposited by the managing agent in the trust fund account shall be kept in a financial institution and insured by the Federal Deposit Insurance Corporation, and shall be maintained there until disbursed in accordance with written instructions from the association entitled to the funds.
(2)
At the written request of the board of the homeowners association, the funds the managing agent accepts or receives on behalf of the association may be deposited into a checking or interest-bearing account in a bank or savings association provided all of the following requirements are met:
(a)
The account is in the name of the managing agent as trustee for the association or in the name of the association.
(b)
All of the funds in the account are covered by insurance provided by the Federal Deposit Insurance Corporation.
(c)
The funds in the account are kept separate, distinct, and apart from the funds belonging to the managing agent or to any other person for whom the managing agent holds funds in trust.
(d)
The managing agent discloses to the board of the homeowners association the nature of the account, how interest will be calculated and paid, whether service charges will be paid to the depository and by whom, and any notice requirements or penalties for withdrawal of funds from the account.
(e)
No interest earned on funds in the account shall inure directly or indirectly to the benefit of the managing agent or the managing agent's employees.
(f)
Transfers of greater than Ten Thousand Dollars ($10,000.00) of an association's total combined reserve and operating account deposits shall not be authorized from the account without prior approval from the board of the homeowners association.
(3)
The managing agent shall maintain a separate record of the receipt and disposition of all funds described in this section, including any interest earned on the funds.
(4)
Before every regular meeting of the homeowners association and any other time upon request of the association, the managing agent shall provide to the association all of the information described in Section
79-11-753
.
(5)
The managing agent shall not commingle the funds of the association with the managing agent's own money or with the money of others that the managing agent receives or accepts. If the managing agent has commingled funds on July 1, 2021, the managing agent shall, no later than September 1, 2021, separate the commingled funds into separate accounts.
(6)
The prevailing party in an action to enforce this section shall be entitled to recover reasonable legal fees and court costs.
(7)
As used in Sections
79-11-751
through
79-11-759
, "association" means a homeowners association duly organized as a nonprofit corporation organized under the Mississippi Nonprofit Corporation Act, Section
79-11-101
et seq., and which is exempt from taxation under the federal Income Tax Code.
(8)
As used in Sections
79-11-751
through
79-11-759
, "managing agent" is any person who, for compensation or in expectation of compensation, exercises control over the assets of a homeowners association. A "managing agent" does not include a regulated financial institution operating within the normal course of its regulated business practice.
Amended by Laws, 2022, ch. 361, HB 933,§ 1, eff. 7/1/2022.
Added by Laws, 2021, ch. 406, HB 953,§ 1, eff. 7/1/2021.