Show me the law!

There seems to be about a million active threads on this site about whether one HOA member should be able to find out how much another member has paid to the HOA.

Can anyone cite a statute or case law that prohibits one member from knowing how much another member has paid?

Larry,

Prohibits, no.

Gives the Board the option of withholding that information - yes.

Here are two examples - VA and AZ:

Virginia Property Owners Association Act § 55-510 which states (in part) [emphasis added]:

C. Books and records kept by or on behalf of an association may be withheld from inspection and copying to the extent that they concern:

8. Documentation, correspondence or management or board reports compiled for or on behalf of the association or the board by its agents or committees for consideration by the board in executive session; or

9. Individual unit owner or member files, other than those of the requesting lot owner, including any individual lot owner's or member's files kept by or on behalf of the association.

AZ 33-1805 which states (in part) [emphasis added]:

B. Books and records kept by or on behalf of the association and the board may be withheld from disclosure to the extent that the portion withheld relates to any of the following:

1. Privileged communication between an attorney for the association and the association.

2. Pending litigation.

3. Meeting minutes or other records of a session of a board meeting that is not required to be open to all members pursuant to section 33-1804.

4. Personal, health or financial records of an individual member of the association, an individual employee of the association or an individual employee of a contractor for the association, including records of the association directly related to the personal, health or financial information about an individual member of the association, an individual employee of the association or an individual employee of a contractor for the association.

Bruce,

Thanks for the reply. The Connecticut statute is the first I have seen to be so explicit.

I am not sure that the Federal statutes would have much application between members, at least in AZ where by law members are in a contractual relationship.

Hi Larry,

I would like to point out that the AZ statute I cited specified the board may withhold "financial records" and "financial information" (financial information was not previously highlighted in my posting).

My understanding is that what you define as a financial record would be financial information (aka supporting documentation) for the financial record. Financial records is actually a broad term that encompasses many things.

However, that is my interpretation of those terms and, as this thread demonstrates, this interpretation differs from yours. The AZ statute doesn't define what a financial record or what financial information is. Therefore, one must either rely on other sources for a definition or seek a legal opinion from different attorneys or the court.

I'm not sure what you would define as an authoritative source for this definition. Therefore I will just offer what I have located.

C29 C.F.R. § 19.1 - Definitions Financial record means an original of, a copy of, or information known to have been derived from, any record held by a financial institution pertaining to a customer's relationship with the financial institution (substitute financial institution for HOA).

IRS publication 552 - Record Keeping for individuals doesn't exactly define the specific term but does identify the different type of records of a financial nature.

IRS Publication 583 - Starting a business and keeping records identifies that a good record keeping system includes journals which are used to record each business transaction shown on your supporting documents. Based on this information it would be logical to expect that the recording of business transactions is a financial record.

USLegal.com defines Financial records as records of income and expenditure that are kept for tax purposes. It includes paycheck stubs, statements of interest or dividends earned, and records of gifts, tips, bonuses, canceled checks, cash register receipts, credit card statements, and rent receipts. Financial records will contain details of all the financial transactions conducted.

the International Records Management Trust defines financial records as "Records resulting from the conduct of business and activities relating to financial management" (scroll down to page 12).

This is the best I can locate in the time I took. If these definitions don't help you to define the terms, then you will probably need to seek a legal opinion.

Hope it helps,

Tim

Florida 720 - I have extracted the information with regard to members financial records

(4) OFFICIAL RECORDS.—The association shall maintain each of the following items, when applicable, which constitute the official records of the association:

(j) The financial and accounting records of the association, kept according to good accounting practices. All financial and accounting records must be maintained for a period of at least 7 years. The financial and accounting records must include:
1. Accurate, itemized, and detailed records of all receipts and expenditures.
2. A current account and a periodic statement of the account for each member, designating the name and current address of each member who is obligated to pay assessments, the due date and amount of each assessment or other charge against the member, the date and amount of each payment on the account, and the balance due.

(5) INSPECTION AND COPYING OF RECORDS.—The official records shall be maintained within the state and must be open to inspection and available for photocopying by members or their authorized agents at reasonable times and places within 10 business days after receipt of a written request for access. This subsection may be complied with by having a copy of the official records available for inspection or copying in the community. If the association has a photocopy machine available where the records are maintained, it must provide parcel owners with copies on request during the inspection if the entire request is limited to no more than 25 pages.
(a) The failure of an association to provide access to the records within 10 business days after receipt of a written request submitted by certified mail, return receipt requested, creates a rebuttable presumption that the association willfully failed to comply with this subsection.
(b) A member who is denied access to official records is entitled to the actual damages or minimum damages for the association’s willful failure to comply with this subsection. The minimum damages are to be $50 per calendar day up to 10 days, the calculation to begin on the 11th business day after receipt of the written request.

An often overlooked section of statutes is the "definitions" section often found at the beginning of many statutes. If a section of a statute refers to "financial records", for example, instead of trying to interpret what is meant by the term yourself, check to see if there is a "definitions" section in the statute and if the term is defined there.

The Vermont Statute also contains the words:

(c) Records retained by an association may be withheld from inspection and copying to the extent that they concern:

(8) individual unit files other than those of the requesting owner.

Those words come from the UCIOA, so the other states that use the UCIOA as a basis for their statutes, would probably also have those same words.

Let me try an analogy.

Suppose I owe you ten dollars. I pay up by handing you a ten-dollar bill that I pull from my wallet.

How much more money I have in my wallet and where it came from is my personal financial information and you have no legal right to know that.

But when your spouse asks, "Did Larry ever pay that ten bucks he owes?" in some states your answer is "Yes, dear" and in other states your answer is "None of your business."

Perhaps it should be this one (learned in my military days)

If a horse is on the ground and you hit it trying to get it up on its feet and someone says your beating a dead horse - the two of you might have a difference of opinion and may need to agree to disagree.

However, if the entire neighborhood says your beating a dead horse, their might be something to it and perhaps you should examine the horse.

See: http://en.wikipedia.org/wiki/Flogging_a_dead_horse

I find dead horses make good glue!!! Once you beat it enough you get stuck to it! LOL!

Each state has different laws but the one law of the land that trumps all else are Federal and violating it can wreck havoc. There is the Fair Housing Law, Collection Laws, Confidentiality Laws; we could go on with the numerous laws. Your last analogy of husband and wife….well I would never get between those situations.

Educating yourself on AZ law concerning HOA’s and familiarizing yourself with Federal law is always a good beginning, and hey (no pun intended) animal cruelty is not allowed. lol