BOD charging 100$ an hour for a record request but overriding city ordinance states that there should be no cost

Started by JoeS26 • 64 replies • 5327 views

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JoeS26 (Illinois)
Posts: 34

Posted:

A small group of owners in a 400+ condominium building submitted a financial record request in accordance with our bylaws. The board responded to our financial request, stating that they would charge us 100$ per hour to track down records, that quite frankly, I don't believe they have.

We have a very unique situation. Our governing documents state that the board can pass document retrieval costs onto the owner, HOWEVER, a recent court ruling found that the City of Chicago's municipal ordinance takes precedence to the Illinois Condo Property Act (ICPA). In fact, our own association attorney has the following overview provided on its website:

"Examination of Association Financial Records in Chicago Condominiums"

"In early 2013, the Illinois Supreme Court addressed a unit owner’s request for the financial records of a Chicago high-rise condominium association
in Palm v. 2800 Lake Shore Drive Condominium Association. The unit owner demanded to examine financial records pursuant to Section 13-72-080 of the City of Chicago Municipal Code, which requires that all of a condominium association’s financial records be made available to a requesting owner. (At the time, the Chicago Ordinance required that financial records be provided within just 3 days; the Ordinance currently allows 10 business days.) The association refused and insisted that all requests for condominium records are governed by Section 19 of the ICPA, which, among other things, requires that the unit owner state a proper purpose for the requested records and gives the association 30 days to respond. After 13 years of litigation, the Illinois Supreme Court ruled that the Chicago Ordinance takes precedence over the ICPA, and that requests for the financial records of associations located in Chicago are governed by the Ordinance, and not by the ICPA.

This ruling is of importance to associations located in Chicago because of the many major differences between the Chicago Ordinance and ICPA
Section 19: the Ordinance does not require that the unit owner specify a proper purpose for requesting the records; the Ordinance currently allows
just 10 business days for production, instead of the 30 days allowed by the ICPA; the Ordinance does not allow for any records to be withheld, even
when the requested records include information that would be exempt from inspection under ICPA Section 19; while the ICPA allows examination of up
to 10 years of financial records, the Ordinance requires production of an unlimited number of years of financial records; the Ordinance does not allow the association to recover document retrieval costs; and, unlike the ICPA, the Ordinance allows the requesting unit owner to recover attorneys’ fee for an alleged violation of the Ordinance without a finding that the association’s board."

Importantly, the board has given us ONE business day to make a decision or be faced with 100s of hours of at 100$ per hour to be a shared cost amongst the requestors of the records request.

1) Is it possible to withdraw our request pending legal review (or discussion with the board)? We don't want to remove our record request, but with only one day to decide, we want to ensure the board knows we're not willing to pay the cost until this is resolved.

2) My thought is to respond and quote the attorney's website and ask how the board can explain passing on the fees to us when our association attorney's website states that the municipal code indicates that owners do not have to pay a document retrieval cost.

3) We were hoping not to have to engage the services of an attorney and save a little money but some of the owners signing the letter feel, myself included, that we are not willing to be assessed such an exuberant document retrieval fee that could be in the 10s of thousands.

Please let me know if further details are need and thank you for your help.

JonD1
Posts: 2,350

Posted:

Joe it seems from your previous posts you are on the road to conflict with your board.

POA issues, then requests for legal billing records and now you have suggested you believe mismanagement of funds exists and you and a SMALL
group are making more record demands.

I have to wonder including you just how many are in your group?

Are these group members willing to share the costs of any attorney to pursue this further?

If so carry on.

You wanted conflict seems you are well on your way to getting it.

Good luck.

JoeS26 (Illinois)
Posts: 34

Posted:

We want a building with a strong financial reserve, no more special assessments to cover basic amenities like a heating bill, and a board that works for all of us - not some of us.

I am not afraid of backing down to a board that has demonstrated it may be well intended but makes terrible decisions.

We have a war chest to take it to an attorney. I feel it's worthy to note that there should be no conflict associated with making a legally compliant record request to review finances. I'm an owner in the building and have every right to make this request without the fear that others will chalk it up to rebel rousing.

Thanks for the input, but I wonder if others have guidance around my questions. As I said, we have to respond my Tuesday.

Thanks

JoeS26 (Illinois)
Posts: 34

Posted:

Quote:

Posted By JonD1 on 01/17/2015 2:05 PM
Joe it seems from your previous posts you are on the road to conflict with your board.

POA issues, then requests for legal billing records and now you have suggested you believe mismanagement of funds exists and you and a SMALL
group are making more record demands.

I have to wonder including you just how many are in your group?

Are these group members willing to share the costs of any attorney to pursue this further?

If so carry on.

You wanted conflict seems you are well on your way to getting it.

Good luck.

The POA was one issue out a list of problems (I do not have an 'axe to grind') and the legal fees had to do with the larger concern that the BOD is spending our money in frivolous ways.

NpS (Pennsylvania)
Posts: 4,216

Posted:

Quote:

Posted By JoeS26 on 01/17/2015 1:24 PM
1) Is it possible to withdraw our request pending legal review (or discussion with the board)? We don't want to remove our record request, but with only one day to decide, we want to ensure the board knows we're not willing to pay the cost until this is resolved.

*** Ask them to put your request on hold instead.

2) My thought is to respond and quote the attorney's website and ask how the board can explain passing on the fees to us when our association attorney's website states that the municipal code indicates that owners do not have to pay a document retrieval cost.

*** I doubt that will accomplish anything.

3) We were hoping not to have to engage the services of an attorney and save a little money but some of the owners signing the letter feel, myself included, that we are not willing to be assessed such an exuberant document retrieval fee that could be in the 10s of thousands.

*** In the case you cited, attorneys from the City's solicitors office intervened in the case. You might want to reach out to them to learn what the current status of the law is. But they may not respond to you.

As to going forward without a lawyer, foolish in my opinion.

Sikubali jukumu. Read all posts at your own risk.

NpS (Pennsylvania)
Posts: 4,216

Posted:

Quote:

Posted By JoeS26 on 01/17/2015 2:22 PM
We want a building with a strong financial reserve, no more special assessments to cover basic amenities like a heating bill, and a board that works for all of us - not some of us.

What does your reserve study say about the strength of your reserves?

Last year was an unusual winter. Not surprising that heating costs exceeded budget. Could have been the reason for a special assessment.

Board working for some but not all is a nebulous complaint that could be made by anyone who is disgruntled - it does not add legitimacy to your message.

Sikubali jukumu. Read all posts at your own risk.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Joe

You took them on and now that they are playing hardball with you, you come here looking for advice. You said you have a legal war chest, so open it up. Hire an attorney.

Stop playing outhouse lawyer.

Fight a lawyer pi$$ing at you with your lawyer pi$$ing back as in fight fire with fire. Actually they do not pi$$ fire. They pi$$ your money.

JoeS26 (Illinois)
Posts: 34

Posted:

Thank you for the suggestions.

Here our drafted response:

"We are in receipt of your letter dated January 16, 2015 in response of our written request for inspection of the Associations’ Books and Records of Account in accordance with the provisions of the Illinois Condominium Property Act (765 ILCS 605/19) and the City of Chicago Municipal Code (Section 13-72-080).

We are in stark disagreement with your reading of the applicable law. At no point will we be paying to subsidize the Board’s failure to maintain records as required by the associations by laws (number??). We will be commutate further after our legal representation is in place.

We are also disappointed in the lack of time to respond to your letter. We were given until Wednesday, January 21, 2015, at 5:00 pm to provide a written recantation the charges would automatically accumulate. Monday, January 19, 2015, is a legal holiday and therefore we had only 2 legal business days to respond. The Management Offices for EPCA were closed that day as well.

We are receding our request dated January 2, 2015. But with the proviso, once we have obtained legal advice we will in further communication."

MelissaP1 (Alabama)
Posts: 13,836

Posted:

As far as I see it, the HOA can charge for the additional costs of researching and providing the additional records. It is NOT free to do this. They will have to hire someone to do the research and make copies. If everyone in your group wants copies, then multiply the copying cost. A page can cost about 10 Cents a page. So your costs can rack up fast.

Plus a HOA is ONLY funded by it's members for it's members. Your putting an extra expense on ALL the members to provide for your demands. Which I am still not sure you get the concept of how a HOA even is to spend it's money. Which it is a NON-profit. Meaning it is to spend as much out as in. So your HOA is NOT going to have a budget you have in your mind. I am sure I can look at your own personal budget and disagree on how you handle money.

The HOA could even sue you for these expenses if you do not pay them. Simply because the court would look at these expense as "Damages". The HOA is suffering a monetary loss it would not have to have if you were not demanding beyond reasonable records. Which in your previous posts you already had some given to you.

This isn't going to end up pretty in the end... Just keep in mind my always advice: Sue your HOA, your suing yourself and your neighbors... It's best to work WITHIN the system than against it. Complaining about your HOA and it's board but NOT attending a meeting nor participating in it, is still considered "APATHY" on your part. So don't think it is a "THEY" issue. It's YOU and your neighbors issue.

Former HOA President

JonD1
Posts: 2,350

Posted:

Quote:

Posted By JoeS26 on 01/17/2015 3:17 PM
Thank you for the suggestions.

Here our drafted response:

"We are in receipt of your letter dated January 16, 2015 in response of our written request for inspection of the Associations’ Books and Records of Account in accordance with the provisions of the Illinois Condominium Property Act (765 ILCS 605/19) and the City of Chicago Municipal Code (Section 13-72-080).

We are in stark disagreement with your reading of the applicable law. At no point will we be paying to subsidize the Board’s failure to maintain records as required by the associations by laws (number??). We will be commutate further after our legal representation is in place.

We are also disappointed in the lack of time to respond to your letter. We were given until Wednesday, January 21, 2015, at 5:00 pm to provide a written recantation the charges would automatically accumulate. Monday, January 19, 2015, is a legal holiday and therefore we had only 2 legal business days to respond. The Management Offices for EPCA were closed that day as well.

We are receding our request dated January 2, 2015. But with the proviso, once we have obtained legal advice we will in further communication."

Sounds to me like Joe is digging his own hole deeper. Threaten them with a lawyer you have yet to find and soon they will shut down communication to that between lawyers only.

The OP failed to answer just how many are in his small group out of 400.
Troubling to me.

And I would like to know the amount put aside in the war chest to fund legal action? At $250-$300 per hour money goes real fast.

JoeS26 (Illinois)
Posts: 34

Posted:

6 of us.

Yes, agree about involving a lawyer at this point.

JoeS26 (Illinois)
Posts: 34

Posted:

We asked to inspect the documents in the main office so that no copies need be made.

The Chicago ordinance clearly states that document retrieval costs cannot be passed on to the owner. If the board maintained the records, it should be any easy request to fulfill.

JoeS26 (Illinois)
Posts: 34

Posted:

KerryL1 (California)
Posts: 14,550

Posted:

Speaking for myself only, the reason I haven't replied is that many replied to your previous post with basically your same questions. Your specific questions, imo, here are for an attorney.

But I wouldn't mind seeing the exact citation in the Chicago code that says the Association cannot charge owners anything to compile records for said owners.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

In what universe are documents "easy" to retrieve without labor or expense? I had to go through a box of records of 20 years to find a lawncare contract 3 years old. I did it on my own time and even reorganized them for future inquiries... Took me a week.

So what is in your mind does not equal reality...

Former HOA President

AmandaR2 (South Carolina)
Posts: 566

Posted:

My opinion,
Double-check on that ordinance, like NPS mentioned. Seems like it should apply to your request. I would send them a brief "to the point letter", quoting the ordinance and mentioning the fact that their own attorney's website quotes this ordinance. Stick to the facts, keep emotion out. Less is more. Simply ask them for an explanation of their statement that your would be charged for this, when this seems to be in contradiction of the applicable the law. Wait for their response, take it from there. (Law's can be complicated, see if they can explain why they feel they have the legal right to charge you.)

I'm not familiar with any of your previous posts. I'm not sure of what your intentions are so I'm not going judge. Only you know what's truly going on there. So I wish you luck. If there are bad business practices or incompetence that needs to be addressed, I hope it can be handled in a civil manner. If their incompetence is not malicious or has been in bad faith, I'd advise you to consider extending the olive branch to them. It's never too late to begin working together to improve things. Believe me it's better than all out war! Don't forget to look at the big picture, sometimes it's hard to.

AmandaR2 (South Carolina)
Posts: 566

Posted:

Quote:

Posted By AmandaR2 on 01/17/2015 4:33 PM
My opinion,
Double-check on that ordinance, like NPS mentioned. Seems like it should apply to your request. I would send them a brief "to the point letter", quoting the ordinance and mentioning the fact that their own attorney's website quotes this ordinance. Stick to the facts, keep emotion out. Less is more. Simply ask them for an explanation of their statement that your would be charged for this, when this seems to be in contradiction of the applicable the law. Wait for their response, take it from there. (Law's can be complicated, see if they can explain why they feel they have the legal right to charge you.)

I'm not familiar with any of your previous posts. I'm not sure of what your intentions are so I'm not going judge. Only you know what's truly going on there. So I wish you luck. If there are bad business practices or incompetence that needs to be addressed, I hope it can be handled in a civil manner. If their incompetence is not malicious or has been in bad faith, I'd advise you to consider extending the olive branch to them. It's never too late to begin working together to improve things. Believe me it's better than all out war! Don't forget to look at the big picture, sometimes it's hard to.

correction (Laws can be....

AmandaR2 (South Carolina)
Posts: 566

Posted:

correction- or has NOT been in bad faith... (apologies, too tired to type)

AmandaR2 (South Carolina)
Posts: 566

Posted:

One more thing, I don't think that giving you ONE business day to either drop your request or incur astronomical charges, would be considered to be reasonable or hold up if it ever went to court. It sounds like they're trying to scare you off.
Just my opinion, not in the legal profession.

KerryL1 (California)
Posts: 14,550

Posted:

I just got this little hit that Amanda is Emma. Anyone else? Or am I being hyper critical today? Always possible.

AmandaR2 (South Carolina)
Posts: 566

Posted:

Quote:

Posted By KerryL1 on 01/17/2015 5:06 PM
I just got this little hit that Amanda is Emma. Anyone else? Or am I being hyper critical today? Always possible.

Kerry,I really don't understand why this keeps being said to me, it's strange I've never had this happen to me on a forum before, but whatever I guess.

NpS (Pennsylvania)
Posts: 4,216

Posted:

Not surprisingly, the Municipal commission revised its ordinance about 6 months after the Palm decision. Copy of revision attached. No mention of records being made available for free.

Hate to say this to you again Joe - you are way out of your league. You are spinning your wheels without a lawyer.

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Sikubali jukumu. Read all posts at your own risk.

GlenL (Ohio)
Posts: 5,491

Posted:

Joe why are you messing around with records - recall the Board, the new Board will have access to the records.

A recall will decide one of two things, either a majority of your neighbors will agree that the Board is incompetent and boot them or a majority will think you and your group are kooks and keep them.

Studies show that 5 out of 4 people have problems with fractions

JonD1
Posts: 2,350

Posted:

It would be an uphill battle to recall the board when you have just 5 people out of 400 willing to support your efforts.

Not sure what Joe's real goals are and more importantly what Joe is capable of accomplishing.

I would know the answers to both questions before pushing forward or issuing more threats and demands.

RogerB (Colorado)
Posts: 5,067

Posted:

Quote:

Posted By JoeS26 on 01/17/2015 3:52 PM
We asked to inspect the documents in the main office so that no copies need be made.

The Chicago ordinance clearly states that document retrieval costs cannot be passed on to the owner. If the board maintained the records, it should be any easy request to fulfill.

It appears that you position is that the cost to retrieve records should not be charged to you. I do not agree. That would have to be determined by a Court. Meanwhile how about the costs, including monitoring while you inspect records, refiling of records, and other associated costs? The HOA can charge reasonable fees for those; and IMO should also charge for all out of pocket costs for the retrieval records.

If your HOA has a management company, which charges under their management agreement, those charges are often paid in advance to the management company maintaining the documents by the member who makes a request to review specific documents.

NpS (Pennsylvania)
Posts: 4,216

Posted:

Quote:

Posted By RogerB on 01/18/2015 9:32 AM

Roger

I don't think that Joe's statement about the Chicago ordinance is correct. I attached a copy of the revised ordinance to a prior post. Nothing about free copies.

Sikubali jukumu. Read all posts at your own risk.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Quote:

Posted By JonD1 on 01/18/2015 9:03 AM
It would be an uphill battle to recall the board when you have just 5 people out of 400 willing to support your efforts.

Not sure what Joe's real goals are and more importantly what Joe is capable of accomplishing.

I would know the answers to both questions before pushing forward or issuing more threats and demands.

I could get 5 out of any 400 to support some real "weird" stuff. Heck, 20 out of any 400 could probably be pronounced as head cases......LOL

JonD1
Posts: 2,350

Posted:

If memory serves first it was an issue with a POA Joe had. then it was his request for billing information regarding legal expenses. now we are off asking for financial records while implying some mismanagement. Absent of course any evidence or proof.

My guess with 400 units to manage this board might have more pressing problems than those raised by Joe and his 5 supporters.

Seems quite possible Joe is off on a wild goose chase fabricating issues and concerns to the detriment of the property.

Time will tell.....

JoeS26 (Illinois)
Posts: 34

Posted:

Quote:

Posted By NpS on 01/17/2015 7:29 PM
Not surprisingly, the Municipal commission revised its ordinance about 6 months after the Palm decision. Copy of revision attached. No mention of records being made available for free.

Hate to say this to you again Joe - you are way out of your league. You are spinning your wheels without a lawyer.

Yes, this is the Chicago ordinance. Thank you for finding and posting. It does not say anything about the document retrieval cost however our Association attorney published a book on the topic (page 6): http://www.arnstein.com/documents/2014-Condo-Book_Content+Cover_Final_web.pdf

It's titled:

Examination of Association Financial Records in Chicago Condominiums

We're going off of the Association's attorney's published opinion of the Palm II ruling....

We are a group of 6 with a group of 95 supporters. We meet as 6 and present out to the larger group on topics like understanding the bylaws, our finances, and asking for questions the group would like to know more about.

Thanks.

NpS (Pennsylvania)
Posts: 4,216

Posted:

Quote:

Posted By JoeS26 on 01/18/2015 2:27 PM

I had scanned that booklet. It referenced Sec 13-72-080 which is what prompted me to search for a more current version of the ordinance. I compared the booklet to the revised ordinance. The description in the booklet is inconsistent with the version of that ordinance that I shared with you - even though the ordinance was revised before the date on the booklet. Now a year after the date on the booklet, it has not been updated to reflect the new Sec 13-72-080. The booklet does not reference any other Section of the ordinance. Since the part about 13-72-080 was outdated and continues to be out of date a year later, I had little confidence that a statement in the booklet about no-cost production was reliable. Not just because the booklet fails to provide a specific reference that could be checked - But because it makes absolutely no sense whatsoever.

FYI, the booklet is not an attorney's published opinion. It is not even an attorney's brief on the topic. It is part of a solicitation by a law firm for those who seek legal services. So if you want to accept a lawyer's advertisement on its face as being accurate and reliable - that's your choice - but no judge would accept it as having any significance. IMO, when you keep coming up with these deficiencies that in your mind prove something, you demonstrate how outgunned you are without the help of a lawyer. Why not consult with a lawyer and then let us know if your lawyer agrees that you are entitled to no-fee production?

Sikubali jukumu. Read all posts at your own risk.

JoeS26 (Illinois)
Posts: 34

Posted:

You are correct, the handbook is an advertisement but it was authored by our Association's attorney. He wrote it based on the Palm II court finding, which is published here:

https://www.state.il.us/court/Opinions/AppellateCourt/2014/1stDistrict/1111290.pdf

It should't take an attorney to make a valid record request, and it shouldn't take an attorney to state that 100$ an hour is outrageous.

I expect to hire an attorney to do what I cannot do - file an action in court.

I really do appreciate your effort and willingness to review my posts and citations. Thank you.

JoeS26 (Illinois)
Posts: 34

Posted:

Quote:

Thank you Amanda. We followed all of your sound advice. I'll keep everyone updated with the outcome.

NpS (Pennsylvania)
Posts: 4,216

Posted:

Quote:

Posted By JoeS26 on 01/18/2015 5:43 PM
You are correct, the handbook is an advertisement but it was authored by our Association's attorney.

So what? Who cares who the author of the advertisement was? You are trying to make something out of nothing.

Quote:

Posted By JoeS26 on 01/18/2015 5:43 PM
He wrote it based on the Palm II court finding, which is published here:

https://www.state.il.us/court/Opinions/AppellateCourt/2014/1stDistrict/1111290.pdf

When a decision as controversial as the Palm opinion is handed down, it is not uncommon for the legislature to rewrite the law in order to negate the effect of the Court's ruling. It is quite obvious - that is exactly what happened here. The legislative rewrite occurred 6 months after the Palm decision. The attorney's booklet was written several months after that. So while you are correct that the booklet described the Palm decision, you are incorrect if you think that the Palm decision reflects the current law.

Quote:

Posted By JoeS26 on 01/18/2015 5:43 PM
It should't take an attorney to make a valid record request, and it shouldn't take an attorney to state that 100$ an hour is outrageous.

Now you are changing the subject from something that is purely objective (Is it free?) to something that is subjective (Is it overpriced?). I have no comment on whether it is overpriced. But I cannot understand your refusal to ask your own lawyer a simple yes-no question: Must production be free?

Quote:

Posted By JoeS26 on 01/18/2015 5:43 PM
I expect to hire an attorney to do what I cannot do - file an action in court.

Why bother with an attorney? You obviously don't want an attorney's advice. And if all you want to do is file papers, you can do that yourself without a lawyer.

Quote:

Posted By JoeS26 on 01/18/2015 5:43 PM
I really do appreciate your effort and willingness to review my posts and citations. Thank you.

Polite, but not very convincing. I think you are hellbent on your mission and will not be deterred, not even when you can inexpensively hire an expert to answer whether production must be free and whether the proposed rates are reasonable under the circumstances.

Sikubali jukumu. Read all posts at your own risk.

GlenL (Ohio)
Posts: 5,491

Posted:

Joe, I'm not an attorney nor do I play one on the internet. I've skimmed Palm v. 2800 and I can find no reference to no charges to inspect only a time frame and arguments over attorney's fees. I also looked at the link NP provided which deals with the time frames but is silent about costs. I then looked at the Illinois Condominium Act Sec 19 and lo and behold they do address fees for inspection and since the City can write a more restrictive ordnance, the time lines in Section 19 would default to what the city requires, nor do you need to provide a purpose for the request. But the City cannot write a less restrictive ordnance so IMHO the state law would prevail:

765 ILCS 605/19) (from Ch. 30, par. 319)
Sec. 19. Records of the association; availability for examination.

(f) The actual cost to the association of retrieving and making requested records available for inspection and examination under this Section shall be charged by the association to the requesting member. If a member requests copies of records requested under this Section, the actual costs to the association of reproducing the records shall also be charged by the association to the requesting member.

(g) Notwithstanding the provisions of subsection (e) of this Section, unless otherwise directed by court order, an association need not make the following records available for inspection, examination, or copying by its members:

(1) documents relating to appointment, employment, discipline, or dismissal of association employees;

(2) documents relating to actions pending against or on behalf of the association or its board of managers in a court or administrative tribunal;

(3) documents relating to actions threatened against, or likely to be asserted on behalf of, the association or its board of managers in a court or administrative tribunal;

(4) documents relating to common expenses or other charges owed by a member other than the requesting member; and

(5) documents provided to an association in connection with the lease, sale, or other transfer of a unit by a member other than the requesting member.

(h) The provisions of this Section are applicable to all condominium instruments recorded under this Act. Any portion of a condominium instrument that contains provisions contrary to these provisions shall be void as against public policy and ineffective. Any condominium instrument that fails to contain the provisions required by this Section shall be deemed to incorporate the provisions by operation of law.

Palm v. 2800 Lake Shore Drive Condominium Assoc. http://www.state.il.us/court/opinions/SupremeCourt/2013/110505.pdf

Studies show that 5 out of 4 people have problems with fractions

EricH8 (Virginia)
Posts: 116

Posted:

Why must HOA records be browsed and copied in paper form, even though the documents already exist in electronic form? Why must boards chose the most inefficient and expensive methods of providing access to HOA records, methods that the directors themselves would say were outrageous is the directors had to get the records the same way?

Joe, why don't you propose that your allies will create a website for the HOA where the documents can be conveniently browsed and copied by all the members? If the board rejects that idea, you will have a better idea whether they are sincerely concerned about the cost of access, or do they really just not want to provide access.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Websites still cost money and need someone to run it. There still will be the expense of record gathering to populate the site. However, that cost will be incurred by the HOA. Even though they own the records does not mean they do not take effort to retrieve or scan them. Although I do like the idea of electronic copies.

I do not know what Joe is trying to prove? It seems pretty wide ranging. Does he think they collect too much dues? Pay out too much legal money? Use money for special interest projects? There does not seem to be a single item here. Can not provide someone a solution even providing them all the documents in the world if they have no solution in mind. It just sounds like a case of they did not provide records on my command so there must be something wrong and I am going to prove it....

Former HOA President

NigelB (Texas)
Posts: 254

Posted:

I had an issue with the way our HOA of 230 single family homes was being run, the board was non responsive and in fact violating the governing docs by not appointing a replacement for a resigned member, also acting as the ACC, and generally allowing the management company complete control over its affairs. After three of four months of repeated requests for clarification on some issues which were met by a total failure to respond to my requests, myself and another individual were elected to out three person board in November last year. I am now the President of the HOA. I am implementing a policy of total transparency in all of the financial affairs of the HOA with easy unfettered access to all legally available records to all members of the association.

What I'm suggesting is rather than tilt at the windmill, just replace it. Organize enough individuals to replace the board when their terms expire or if your governing documents provide for replacement by a majority vote of the membership - do so. When you and those who support you control the board you can enact the changes you deem necessary.

NigelB (Texas)
Posts: 254

Posted:

NpS (Pennsylvania)
Posts: 4,216

Posted:

Quote:

Posted By NigelB on 01/19/2015 8:22 AM
I had an issue with the way our HOA of 230 single family homes was being run, the board was non responsive and in fact violating the governing docs by not appointing a replacement for a resigned member, also acting as the ACC, and generally allowing the management company complete control over its affairs. After three of four months of repeated requests for clarification on some issues which were met by a total failure to respond to my requests, myself and another individual were elected to out three person board in November last year. I am now the President of the HOA. I am implementing a policy of total transparency in all of the financial affairs of the HOA with easy unfettered access to all legally available records to all members of the association.

What I'm suggesting is rather than tilt at the windmill, just replace it. Organize enough individuals to replace the board when their terms expire or if your governing documents provide for replacement by a majority vote of the membership - do so. When you and those who support you control the board you can enact the changes you deem necessary.

Solid advice Nigel. Let me ask a question: When you took over control of the board, what shape were your records in? If you had received a request for 10 years of financial records, how long would it have taken you to put it together? How big a project would it have been for you?

Sikubali jukumu. Read all posts at your own risk.

NigelB (Texas)
Posts: 254

Posted:

Quote:

Posted By NpS on 01/19/2015 8:44 AM

That is indeed a good question. From what I have seen, all of the records are maintained by the management company which publishes a monthly financial summary. I don't believe that the previous board ever reviewed actual billing records or even received copies of them from the management company, and apparently just relied on the company to take care of things. I find that troubling because the ultimate responsibility for oversight rests with the board, we are instituting a policy of requiring the mgmt co to provide copies of all billings or invoices other than those on annual contracts to the board as they are received. One of the problems I've noted is that for any expenditure over $500, the check must be signed by the Treasurer - in the 2001 century very few transactions are via check and there is a direct deposit made from our operating account bu the management company.

If someone had a question about a particular expenditure as reflected on the summary, I wouldn't think it should take much time and effort to provide the documents supporting the entry.

AmandaR2 (South Carolina)
Posts: 566

Posted:

Quote:

Joe, you said you were willing to simply inspect the records and that you asked that of your Board. Did they deny that request? If so, did they state why they would not allow you to inspect the documents vs. providing copies to you? Of course, be sure to check all current laws to make sure you have the legal right to demand this. Some states are allowed to charge owners a fee for costs to have someone to oversee owners inspection of the records. However, I'm sure that would be much less expensive.

I agree you should consult with a reliable attorney, but know that once you have that attorney begin communication for you, that will most likely be your only way to communicate with them. It'll be lawyer to lawyer from that point forward in most cases. Decide what's the best route for you, and if it's all worth it. It may get very expensive.

EricH8 (Virginia)
Posts: 116

Posted:

Quote:

Posted By MelissaP1
Websites still cost money and need someone to run it.

I agree that someone needs to run the website. But web hosting costs from a shared webhosting company can be very low. $5 per month for 5 gigabytes of storage is common. So the cost of hosting a 1 MB document is only $0.001 = 0.1 cents per month. The highest expense would be an SSL security certificate with a high level of trust, $150 per year typical, though not necessary if using a shared security certificate or a free not-so-high trust certificate.

Quote:

Posted By MelissaP1

There still will be the expense of record gathering to populate the site. However, that cost will be incurred by the HOA. Even though they own the records does not mean they do not take effort to retrieve or scan them.

What I meant to propose for Joe is that his allies should offer to create the website and copy the HOA records to the site using their own labor at no expense to the HOA. An offer that the board could not object to based on expense to the HOA. The expense to Joe's people to create the website would be less than the lawyer fees to fight about access, and less than the board's $100 per hour inspection fees.

AmandaR2 (South Carolina)
Posts: 566

Posted:

Joe, your first post says they stated they would charge you $100 per hr to track down records, then you go on in the same post to say you'd be faced with 100s of hrs at $100 per hr. to be shared cost for the records request, but in Eric's post he refers to "$100 inspection fee". If Eric is correct I must have misunderstood what you meant. I had thought they ignored your suggestion that you simply inspect the records.
I like Eric's idea but it would only work if this board agrees to it. If you are correct that they don't have or are hiding things, they'll never agree. If you can get on good terms it would be a good solution.

EricH8 (Virginia)
Posts: 116

Posted:

Quote:

Posted By AmandaR2 on 01/20/2015 12:02 PM
Joe, your first post says they stated they would charge you $100 per hr to track down records, then you go on in the same post to say you'd be faced with 100s of hrs at $100 per hr. to be shared cost for the records request, but in Eric's post he refers to "$100 inspection fee". If Eric is correct I must have misunderstood what you meant.

Oops. Don't let me change Joe's story. It's my own HOA that says I can make an appointment to go the the management company to "view (no photographs or recordings) invoices and receipts." They charge is $85 per hour. So two months ago I tried my own suggestion. I offered to my own board to webbify documents but haven't received a reply.

NpS (Pennsylvania)
Posts: 4,216

Posted:

Quote:

Posted By EricH8 on 01/20/2015 1:15 PM

It's my own HOA that says I can make an appointment to go the the management company to "view (no photographs or recordings) invoices and receipts." They charge is $85 per hour. So two months ago I tried my own suggestion. I offered to my own board to webbify documents but haven't received a reply.

You can come do it at my HOA anytime Eric. What a nice offer.

Sikubali jukumu. Read all posts at your own risk.

BillH10 (Texas)
Posts: 1,217

Posted:

I would like to provide some thoughts on this discussion. As I have mentioned in the past, we are a small HOA management company. We have board experience here in Texas in two HOAs, and in California.

When we were awarded the contract to manage one of the associations in our portfolio, we asked the Board President to contact the existing management company and arrange to transfer the records, which was done. We were given paper records only. I asked for electronic copies and was told they had been "destroyed".

When we began filing the records, we found a number of issues: misfiles, missing records, unopened incoming mail, returned mail unopened with no indication of actions taken to determine why the mail was returned, no copies of lien filings, correspondence with the association attorney, and similar issues. Fortunately we were able to assemble a complete set of monthly financial reports dating back to the first property sales in the association.

My point is this: you may request records but they simply may not exist and this does not indicate malfeasance on the part of the existing or former boards. No managed association we have been associated with stores copies of the underlying administrative documents or those which feed into the accounting system--bills, payment records, bank records, etc. A managed association typically relies upon the management company to maintain the files. The extent to which that is done as it should be is a reflection of the professionalism of the management company.

My next point is we keep current and prior year paper records in the office. To respond to a comment made by someone, I estimate 25%-40% of new records are paper records. We are working to change that but we do not intend to scan a copy of every piece of paper which comes into our office. Previous years records are maintained in the association storage units. Were someone to ask to see records dating back ten years, it would take us many hours to retrieve the records, assemble the desired records, ensure property owner private information has been redacted, redact account numbers, and so on. Even if we have electronic copies, we still would have to redact portions of a .pdf file or bank statements.

My recommendation is you ask for the 2013 and 2014 financial reports, including the budgets, and possibly the meeting minutes. Review those with a view toward discovering evidence of whatever your concern is. If you cannot see anything in the financial reports which does not make sense, drop it. If you see entries which you do not understand (which is not the same thing as a questionable entry) ask for an explanation or back-up material. Clearly, if you see questionable items, question those in an appropriate forum.

In closing, the Texas legislature has specified how much the association can charge for time and materials associated with records requests. It is well below our costs. We charge the association the minimum possible clerical rate in our contract. Unfortunately, the association as a whole winds up paying for a records request as our cost billed to the association exceeds what the association can charge.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Bill

The hell with that. I want 10 years of everything says Joe.

RichardP13 (California)
Posts: 163

Posted:

In reading the OP post, they are posting from Alabama, yet they are quoting Chicago authority. Laws and regulations vary from state to state.

I want to echo what Bill stated. I also manage a small HOA management firm and all invoices we receive for the different associations we manage are routinely scanned into our accounting software. The monthly reports, which routinely run 50-80 pages include ALL copies of invoices, whether from a vendor or a receipt for reimbursement from either a Board or Committee member, are posted on a free web portal for everyone to see, once they are logged in. The only thing withheld from a normal member is delinquencies and legal bills, if any.In five minutes, with just the push of a couple of buttons, we have the capability of producing a 600-700 page report for anyone to receive. That's our procedure.

Now, as Bill stated, during transition, you are at the mercy of the previous management company and one's before them in what documents they keep and how it was organized. My own association, when turned over, had more than 40 boxes of information, in just ten years. With the exception of maybe 5 boxes, the balance was stored off site.

Joe, we would charge $75.00 per hour, and that price is in our contracts to the associations. You have also so admitted, they probably don't have what you are looking for. In California, members of an association have the legal right to review and inspect records, but there is a cost, and the references you provided state the owners of Chicago Condo's have a right to exam, but no where does it state, at no charge.

NpS (Pennsylvania)
Posts: 4,216

Posted:

Nice description Bill.

But I do think that Joe may not comprehend what redaction involves, what level person it typically takes to make the redaction decisions, and what the potential legal consequences are to the HOA of not redacting all the information that should be redacted. Would appreciate if you explained redaction in greater detail to Joe. thanks.

Sikubali jukumu. Read all posts at your own risk.

JoeS26 (Illinois)
Posts: 34

Posted:

Good one nps - I had to google redaction three or four times before I could comprehend the meaning.

The management company has been with us for more than 10 years and its company website states that it (the management company) keeps detailed receipts as part of its management fee.

Some of the best advice I've heard was to ask for only 2-3 years as that's when our reserve dropped by 1$ million. I think we're currently stuck with our original request to see what they come back with. At any rate - even with having to redact account numbers and names - it would be more helpful for us to know an estimated number of hours per each year of finances (more hours the further back one goes). And to let us opt for 1, 2, 3 or all 10 years.

The board wrote back and in their letter stating three times to withdraw our request... That was rather frustrating.

I concede - this is quite the learning process.

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