What is kiting?

Kiting happens when a condo owner pays the assessment on one unit using the proceeds from selling another, essentially shuffling funds between properties in a way that can mask an underlying cash shortfall. That’s different from actual check kiting, writing checks against funds that haven’t cleared yet to cover a shortfall before the float catches up, and the property-sale timing described here is not automatically fraud.

Why does kiting matter?

This pattern can obscure a genuine financial problem until it’s much harder to untangle. Boards that notice payments arriving in unusual patterns tied to property sales are usually right to look a little closer. The red flags worth watching are patterns, not single events: payments drawn against funds that haven’t cleared, repeated transfers between the same accounts, or payments that consistently land right after a closing, and the right response is flagging it to the association’s CPA, bank, or attorney rather than accusing an owner outright.

When You’ll Run Into This

This term mostly surfaces in financial reviews or audits where payment patterns raise questions worth investigating further.