Q. We are looking into investing our reserve funds. Are there any laws for HOA in regards to this issue? Our documents state that our funds should be deposited in a bank or banks designated by the directors.

K.A., Miami

Your first duty is to protect the members’ money, the principal. Your duty is not to get the best interest or return by placing the principal at risk. When you say that your documents say to use a bank or banks, then the directors must make sure that the bank or banks are secure and provide necessary insurance (FDIC). When it refers to banks, it refers to the amount that you place in a bank. The FDIC only insures to a certain amount. You need to verify with your CPA or accountant that you do not exceed the insured amount. It may mean that you will need to use two or more banks if you need to deposit large sums. Regarding certificates of deposit (CD), while longer terms usually pay more, you need to plan for future expenses. In most situations a 10-year CD would not be advisable. But you can have several six-month and one-year CDs that come due every few months by renewing them every other month or so. Q. How prudent or necessary is it for a HOA to require a license or certification from a man the board hires to maintain the landscape? There is currently a squabble about whether we are vulnerable financially if he breaks any environmental laws.

N.K., Orlando

You have more than just environmental laws to be concerned about. While it is not against the law to hire an unlicensed or uninsured worker, civil, federal and state laws may affect the association. As a board member, you have a fiduciary duty to protect the association’s assets. Any contractor or vendor who works on common areas should be licensed, insured and qualified to accomplish the needs of the association. In addition, you will need to meet IRS tax codes and any state tax codes. A small contractor may not have worker’s compensation insurance but an exemption instead. This is a major problem in that an exemption protects the contractor but not the association in the case of an accident. I recommend that any contractor have his insurance agent name the association as an additional insured. If there is an accident and the contractor is not properly insured, the association can be held financially responsible for the loss. You may be required to report any payments or compensation. If there is a failure to do that, the IRS might fine the association. Before you hire any contractor, individual or vendor, talk to your accountant and attorney.

Q. A conflict of interest appears to have developed in our condominium. The board engaged a CAM manager who also has a real estate broker’s license to handle properties in our condominium. Is it a break of fiduciary duty for a manager to work also as a real estate broker in the same condominium?

J.W., Winter Haven

It is not illegal for a manager to have two licenses and perform both jobs. However, I do think that it is not the best situation for a CAM to manage the association and perform real estate duties at the same time. My belief is based on job duties that can conflict with each other. As a manager I held both a CAM license and a real estate broker’s license for one association. Before I activated my real estate license in the association, I made sure that the board and members approved of me doing both jobs. Even then I had members complain when I was out of the office showing property.