Restrictive Endorsements

What are restrictive endorsements in an association context?

A restrictive endorsement limits how a check can be deposited or used, such as “For deposit only to HOA account.” This practice helps protect funds by ensuring they’re deposited into the correct account and not diverted elsewhere. It’s a simple safeguard that’s especially important when volunteers are managing finances.

Why are restrictive endorsements important?

They prevent fraud and ensure checks are deposited correctly.

How can you use “restrictive endorsements” in a sentence?

The treasurer stamped ‘For Deposit Only’ on all incoming checks as a restrictive endorsement to prevent theft or misuse.