Document Destruction Policy

Lawrence,

Good question. Florida laws require also seven years for insurance policies, financial and accounting records and perhaps some others. We are almost 30 years old and kept most of them in boxes. Some became handy a couple of years ago when another state law became effective and said: ‘IF the developer this than you must do this. ‘ Who in the world knew what the developer did 30 years ago? So we had to dive into the boxes because we just did not want to follow that provision. Also, there were some old minutes and voting records we had to dig up because after many years because someone came forward and claimed this and that amendment is not 'legal' because there was never a vote taken. And, there were those legal opinions which board argued had to followed although they were erroneous or the board did not read them correctly. These are just a couple of examples I can think of right now.

Melissa,

You sound like the other members of our board who also want to keep everything.

Every major corporation has a document destruction policy because they understand how much old documents expose them to liability. (Internal emails from Bill Gates about crushing Netscape cost Microsoft dearly at their antitrust trial, and Microsoft has since increased the frequency of document destruction.) Often in litigation, the most troubling documents can be those that were created long ago and no longer have context to explain them, or that reflect activities before the company instituted better controls.

Any time a document is retained, there is a risk that the information in it could be used against the business in litigation. All this applies to an HOA as much as a large corporation. It is important not to keep all the records, and only to preserve what is necessary and important.

Our attorney told us when asked about document retention, "The best advice I can give is to tell you that you should not have an ad hoc policy and you should not keep everything."

A retention policy also helps to hold down litigation costs. In litigation, if one party makes a discovery request for certain documents, the other party has a duty to conduct a diligent search for documents in its custody that may be responsive to the request. The more documents there are, the more time consuming and costly the search and production.

There are also state and federal laws that require certain documents to be destroyed after a specified period of time, including records of collection activities for delinquent accounts.

And as I pointed out in the original post, the CAI publishes a schedule of recommended document destruction.

My question is not whether to keep everything. That idea is universally rejected by attorneys, non-profit advocates, and the CAI who all recommend periodic document destruction. My question is whether anyone on HOATalk have some anecdotes that support a formal document retention policy.

Lawrence,

This might be one of them.

Per VA Nonstock Corporation Act, § 13.1-932 the corporation shall keep as permanent records minutes of all meetings of its members and board of directors. It does go on to say that minutes from meetings of the members (annual/special meeting) only has to be kept for three years. However, the only time frame for minutes of Board meetings that is mentioned is "permanent".

Tim

Lawrence,

I certainly agree that an Association doesn't need to keep every scrap of paper. Common sense and standard acceptable practices should be used.

Personally, I do think that all minutes with attachments and architectural approvals/denials should be kept forever (either in paper or electronic form (we use pdf files).

Some background on why I think some things need to be kept forever is:

Prior to being elected to the Board, the previous board thought it was a good idea to only keep three years worth of everything and discarded everything prior to a certain date. Unfortunately, no one bothered to really look at what was in those files to determine what should be kept or not - they just used that arbitrary date. After spending two years trying to recreate as many of the files we could, based on references in the minutes the Association lost building plans, audits, resolutions, documentation of approved special assessments, elections and amendments to governing documents.

On a side note - this year the Board discovered that the governing documents being published to the membership for over 10 years were not the same version filed with the County and State. Due to the missing records, we have zero way of proving any of the differences were approved by the membership or not. I'm announcing this discovery at the annual meeting and hope the membership doesn't go after the messenger. Had the minutes of the meetings been kept - our Board would at least have some answers to provide the membership rather then just a hypothesis as to why it might have happened.

Tim

Sounds like you just want to destroy evidence more than records...Destroying some of the information you mentioned out of fear of exposure is NOT the reason to destroy records. They are the reason to KEEP them. A judge found out the HOA destroyed records, especially ones regarding the case at hand, there will be blood....Besides the suing party may well have already kept copies on their end. How is the HOA going to defend themselves in response?

I was a quality manager for several years and know much about "document destroying" policies etc...What documents you want to toss will get you in a heap of trouble. Documents with personal information like social security numbers or account information should be destoyed. It should also be destroyed by the MC's policies if you have one. Find out what their policy is on their record destruction. It may be a good model for the HOA's as well.

Several years after I quit being president and sold my house in our HOA, I was called into the courtroom. While I was president I had foreclosed on a home. The issue with the homeowner went back for years. I was lucky enough before I left to have put all that information in a folder in case something happened. Well, it did happen. Those records were introduced to the court as records of the HOA. I also had to testify to a conversation I may or may not have had with the parties. If I didn't have those records or the court, it wouldn't have been pretty. It wasn't a lawsuit against the HOA but between the renter and the owner of the foreclosed property. The owner had done some shady things and was trying to put some of it on the HOA... Communications with the HOA was an important aspect of the case even though the communication wasn't always "professional" on some people's part.

Be careful because what your asking to destroy...It will come back to you...and not in a good way...Tim found this out too I am sure...