Financial

I want to know about HOA Financials is SC. I was under the understanding that South Carolina Title 27, Chapter 31 Horizontal Property Act, Section 27-31-180, is that all co-owners have the right to examine the financials at convenient hours on working days.
My question is, is there ever a circumstance when an owner or board member would or should be denied reviewing the financials?

Hi Sue - i can't think of a reason why the financials would (or should) be withheld from a homeowner who owns a valid deed to the property. Even if there is confidential/personal information contained within the financial records, the board should have full the authority to have access to such records.

I agree with the other posters that, in general, this information should never be denied (tho this should not include ability to identify individual members' information). This is supported by state law in our state and I suspect in most others.

There is one quirk to watch out for however. In our documents (and probably others), it says this "request for financials" needs to be honored only for those members "in good standing." It doesn't take much imagination to see that this can easily become an issue with a board improperly fending off 'probes' from unhappy members for whatever reason.

As others point out, the only circumstances would be personal identity info such as fine, delinquencies by delinquents' names or other identifying info, etc.

In SC, there probably is a procedure that you must follow, for instance, making your request in writing to the property mgr. or perhaps board secretary.

What records do you want to see, Sue?? What are your reasons?

Can I see the paperwork that shows the details on how much I owe? Nope. LOL. Nice policy.

Personally, I give everyone everything they request. All documents are scanned and put online as PDF. If someone requests something, I just give them the website and they can find it themselves. Easy for me, easy for them. If someone wants to go digging, they can.

Transparency is the best policy.

I think financials mean different things to different people.

To many it just means an overall financial report like this is what we took in and from where, this is what we spent it on, this is what we have left, this is what we did with what we had left. Typical financial report.

I believe in openness. I would expect a monthly (at least quarterly) financial report update (to date versus budget) and posted for all to see.

The problem I see is that many requesting to see all are really on a witch hunt. They are looking for things like how much does that maintenance man make? What are his benefits, etc. Is my neighbor current with his dues? Yes that new pond fountain cost us $xx but is not the owner of that fountain company the brother of our property manager's wife thus maybe something funny there? We had one owner declare our landscaping company was owned by our Declarants brother so it was a sweet heart deal. The owner was wrong on all accounts but it did not stop him from making the accusation.

I can go to my town hall and look up the salary and benefits of any of the employees. Its no secret. Its public information. I dont see why you think your HOA should keep this info a secret.

Reply To Message:
Posted By SteveM9 on 6/28/2014 4:28:59 AM
Subject: RE: Financial
Message: Personally, I give everyone everything they request. All documents are scanned and put online as PDF. If someone requests something, I just give them the website and they can find it themselves. Easy for me, easy for them. If someone wants to go digging, they can.

Transparency is the best policy.

Steve ... I totally agree ... Transparency is the best policy and when a board will not release all the financials it makes one very suspicious.

Sally, I believe you are confusing the two issues.

A HO may certainly see their own lot ledger but not your lot ledger. That's simply a privacy issue. All other financials, contracts, etc. they are allowed to see.

Board Members have a right to see all association documents so they can perform the duties of their position. However, again due to privacy information, an individual, simply because they are on the Board or an officer of the Association, should not be able to see your lot ledger unless it is needed for the performance of their duties. This is also a privacy issue. It's the same as someone working for the IRS. Simply because they can have access to your tax return doesn't mean that they should actually access your return unless it's part of their duties.

Again, when I posted the need to know, I was only specifying a Board members need to know when they are looking at individual records that are not their own.

Heck, our Board just went through approving escalating collection effort on one lot. The Board never knew which lot or the owners name. As Treasurer, I provided history of collections over the past two years (because it showed a pattern) and requested permission to send the issue to the attorney after giving the member another 30 days to bring their account current.

There was zero need for the rest of the Board to know which lot or the name of the member to make that decision. They did need to know the payment history (which was provided). I did have the lot file with me if there were questions that it was needed for, but the Board was not shown the file.

It's not a power grab or a refusal to be transparent. It's simply protecting a members privacy (yours, mine, the neighbors, etc.). As I said, other financial information (income/expense statements and budget summary) are available to any member on are website (as they are an attachment to the minutes). If they want to see deposits, bank statements, etc. they are free to ask and I will gladly show them (heck since they are digitized, I'll e-mail them to the member). However, I will not show them their neighbors ledger without a court order as that is a simple matter of privacy.

As a follow-up.

I did check the SC HORIZONTAL PROPERTY ACT.

The section referred to in the original post, 27-31-180, talks only about a general ledger (Income/expense record) and a members right to see the general ledger. A general ledger will show the amount of the deposit but not the individual breakdown of where the assessment came from. Those would be in the account receivables. Typically, the general ledger for most self managed associations is the checkbook register.

Here is the language from that section:

SECTION 27-31-180. Records of receipts and expenditures.

The administrator or the board of administration, or other form of administration specified in the bylaws, shall keep a book with a detailed account, in chronological order, of the receipts and expenditures affecting the property and its administration, and specifying the maintenance and repair expenses of the common elements and any other expenses incurred. Both the book and the vouchers accrediting the entries made thereupon shall be available for examination by all the co-owners at convenient hours on working days that shall be set and announced for general knowledge.

Since most Assocaitions are also incorporated as a non-profit, the SOUTH CAROLINA NONPROFIT CORPORATION ACT may also be applicable. Per SECTION 33-31-1602. Inspection of records by members:

(a) Subject to subsection (e) and Section 33-31-1603(c), a member is entitled to inspect and copy, at a reasonable time and location specified by the corporation, any of the records of the corporation described in Section 33-31-1601(e) if the member gives the corporation written notice or a written demand at least five business days before the date on which the member wishes to inspect and copy.

(b) Subject to subsection (e), a member is entitled to inspect and copy, at a reasonable time and reasonable location specified by the corporation, any of the following records of the corporation if the member meets the requirements of subsection (c) and gives the corporation written notice at least five business days before the date on which the member wishes to inspect and copy:

(1) excerpts from any records required to be maintained under Section 33-31-1601(a), to the extent not subject to inspection under Section 33-31-1602(a);

(2) accounting records of the corporation; and

(3) subject to Section 33-31-1605, the membership list.

(c) A member may inspect and copy the records identified in subsection (b) only if:

(1) the member's demand is made in good faith and for a proper purpose;

(2) the member describes with reasonable particularity the purpose and the records the member desires to inspect; and

(3) the records are directly connected with this purpose.

(d) This section does not affect:

(1) the right of a member to inspect records under Section 33-31-720 or, if the member is in litigation with the corporation, to the same extent as any other litigant; or

(2) the power of a court, independently of this chapter, to compel the production of corporate records for examination.

(e) The articles or bylaws of a religious corporation may limit or abolish the right of a member under this section to inspect and copy any corporate record.

Well, we have to comply with our laws.

Are you saying town/city government is breaking laws? Your making documents unavailable to inspection because your unfamiliar with laws. Its very common, but its wrong.

Your right, you "may" withhold records and not let anyone view them. My point is..... you dont need to.

For situations such as this I would simply have the public records show that they are behind in dues, say April, May, June not paid, but note a payment schedule has been set up with this person. I would simply shred the actual reason. Its not important. Only the decision to put this person on a payment schedule is worth keeping. I believe the members have a right to know if dues are not being paid for a particular unit/lot. If that person is running for office, board, etc or already has a position of office and has not paid their dues, this info should not be hidden. If your HOA has amenities that should be suspended upon non payment of dues, it will be the other members who will see this person breaking the rules and report it, not the officers.

I feel if you are having personal finances problems, you shouldn't be handling the HOA's as well. Regardless of the reason. And from watching what goes on here on this forum, if people of power have the ability to hide the fact they have not paid dues..... guess what..... they will not pay their dues. And no one will know. Its unfortunate, but it happens, everyday.

Of course. But dues is not one of them.



Keeping someones medical, bankruptcy, etc records they presented for a decision is a liability to keep private for decades and irrelevant to HOA records. The important document to keep is the actual decision.

Steve and TIm thanks for the lively dialog. Tim thaks for delving further into the SC laws. If I want to review the financials, what the board has spent on things (not about collecting dues), I don't bleive that I should be denied as a owner or a board member under any circumstance.

Even if your not in good standing you have a right to view the financials at the HOA's convenience. You just can NOT vote. Which means you can't vote for board members or vote for removal of board members.

Keep in mind when you view HOA financials it's not going to fit your mind's eye of what you think. If you attend meetings, you will see the background and context of some spending. I am sure someone just viewing our financials and seeing that I got reimbursed for bathroom supplies would throw a fit. The bathroom supplies were for the clubhouse and had to pay them out of my pocket, then ask for reimbursement. We did not have a HOA credit card. So many things along those lines were usually purchased out of pocket and reimbursed later after discussion.

So keep in context of what expenses your HOA may incur. It's not just water, utilities, insurance, and basics. It's sometimes flowers, light bulbs, and fru-fru. People want pretty things not just maintenance. Just keep things in perspective and not witch hunting.

Thanks Tim for your letter suggestion.