'Reasonable Charges' for legal requests for information

Started by CarolynB6 • 8 replies • 1620 views

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CarolynB6 (Washington)
Posts: 6

Posted:

Until recently I was on our BOD. I became seriously alarmed about the way the board was handling situations. These included 'executive' sessions to sell property where one of the board members was the buyer's agent. I started reading 2-3 years of meeting minutes and treasurer's reports and realized they were equalling. So I quit.

I've now been in a battle with the board over a $224,000 taxable income problem that the minutes said they got down to $50,000 that had to be spent on capital improvements before July, 2014. There was no disposition and the explaination (it really wasn't a problem) just didn't satisify me.

In looking further there seems to be a whole nest of problems including the board not moving forward with an external audit that was ordered by the membership in Aug., 2014 and that we now have learned is required yearly. We haven't had one since June 30, 2013 and the treasurer's stated prices for the audit have run from $13,000 to $23,000 or more. I've now decided it's time to write a letter to the membership and have invoked my right for a list of names and addresses (only) from the BOD according to WA state law. I sent them a CD on which to put, basically, the mailing list.

I've been informed that the board will honor my request by copying paper records, redacting unnecessary information, and then, of course, charging me for all the extra time that our already overworked staff (because we don't have anyone who's been there more than 6 months, a whole other story) has to expend.

I think I read somewhere about a case involving what was considered 'reasonable' charges, and I'm trying to find out if they can outrageously charge me for a very simple request. Does anyone know about cases in the state of Washington regarding this issue? The BOD is not making any friends by doing this, but I'm mostly worried about our staff - we can't afford to lose more people. The last one that left 2 month ago had been there 7 years.

NpS (Pennsylvania)
Posts: 4,216

Posted:

Can't help re WA law. But the question of reasonableness should depend on what it takes to pull your requested info, scrub it to avoid sending you any confidential info, and sending it to you.

If your HOA uses labels for mailings, then this should be fairly easy. Then can do a run a label and save it to your CD. Mailing labels don't contain confidential info - so no scrubbing needed. If they charged you $50 plus postage, I'd say that would be a lot.

Sikubali jukumu. Read all posts at your own risk.

KerryL1 (California)
Posts: 14,550

Posted:

How large & complex is your HOA, Carolyn? We aren't very large, 211 Residential units and 2 commercial units, but we have three operating budgets and three reserves accounts, so we're finally pretty complex. Even so, our annual audit only costs about $2,500. (I'll double check later.)

Insofar as scrubbing records, perhaps you can request records in which redaction isn't needed. Put another way, why would most financial records need redacting? Your'e not requesting personal records of H/O's or privileged records, are you?

TimB4 (Tennessee)
Posts: 21,062

Posted:

Quote:

Posted By CarolynB6 on 03/29/2015 8:03 AM

We haven't had one since June 30, 2013 and the treasurer's stated prices for the audit have run from $13,000 to $23,000 or more.

Audits are that expensive. However, an audit might not be necessary. A financial review, which is far less expensive, may be enough.

For more info see the following thread on this forum:
Subject: Financial Audits, Reviews or Compilation Which do you use?

Quote:

Posted By CarolynB6 on 03/29/2015 8:03 AM

Does anyone know about cases in the state of Washington regarding this issue?

Reasonable charges for copies are typical. I do not know of any cases in WA, but that doesn't mean that there aren't any. Here is a link to Community Associations Network, a sponsor of this site, Washington State's web page about court cases, hopefully it will be helpful:

http://communityassociations.net/washington-condo-hoa-articles-archive/

You didn't say if your development was a condominium or an HOA. Per RCW 64.38.045, applicable to HOAs, the mailing list is to be made available for "examination" (which is not the same as providing copies). Per that same statute, reasonable charges (staff time, cost of copies, etc.) can be accessed for making the records available or for providing copies. Reasonable cost would be paying for the employees time to do this.

The Washington Condominium Act, specifically RCW 64.34.372, requires that the records also be made available for "examination" but fails to address charges associated with examination requests.

CarolynB6 (Washington)
Posts: 6

Posted:

Thank you everyone for your replies.

We are an HOA with 1,350 properties/lots. Some are for housing and some are for camping only. We have two lakes, a larger one for power boats (but not jet skis) and a smaller one for non-powered things like kayaks and cannoes. There are also swimming areas at each one. Many of our residents are seasonal or weekenders. We have a complete mix of expensive lakeside properties and 40 year old mobile homes. And the quality of the place has been going down for several years. For the past two years seasonal members have made complaints about how much it has deteriorated and that nothing seems to be getting fixed. The only 'new' item that has been put in was a jungle gym that was donated.

We bought here because of the resort like atmosphere that we perceived from our research online and our site visit. But it hasn't turned out to be like that. The community is controlled by about a half dozen people who refuse to let other people join in. When they try to they are told 'that's not the way we've done it for 20 years'. There is a lot of discontent.

One of the problems I delt with on the board was trying to get them more transparent in their operations. There are never more than 6-8 members that show up for board meetings and they refuse to change either of them to accommodate people that can't show up on Saturday at 10 am. At the last board meeting I took my camera and filmed it so that those who could not attend could have access to what was going on. There is now a sign on our meeting hall/garage that says audio/video recording not allowed without prior consent of the board. Everything they do tries to keep people out. And combining that with the tax problems and money questions is not doing anything to help.

My goal is to get a completely independent audit overseen by people who have not been on the board (nor their family members) in the last 3 years. And it has to be a complete audit, not just on tax documents like last time. Of course I'm receiving a lot of resistance.

So now that they are going to try to charge me up the wazoo for this information, I'm unfortunately having to research what I can do legally to make sure I'm not harassed, especially when it's at the expense of our office staff and, therefore, the membership.

Thanks for the links. I'll be looking into that this next week. Oh, and I just asked for the mailing list, basically, on a CD. About a 30 minute job that I would be happy to pay for. But the President of the Board yesterday (at the meeting) said she thought it was going to be a 'very expensive' job.

NpS (Pennsylvania)
Posts: 4,216

Posted:

Less than 100 units. Budget less than $250k. Audit plus tax return costs us less than $1,500.

Sikubali jukumu. Read all posts at your own risk.

KerryL1 (California)
Posts: 14,550

Posted:

OK, Carolyn, the huge size and also the complexity of your HOA explain the immense cost for your audit. Additionally, it sounds like you want the auditors to examine three years of records.

(For our 213 units & three operating budgets and three reserves accounts we only paid $1,150 for '14. I'm looking at the audit right now as it's in our directors reports for our 3/31 meeting.)

Perhaps Mark of WA will help you, Carolyn. . He seems to have a good handle on H/O rights in your state and has shown interest in the issues of transparency.

Speaking of which, I'd expect a very large property management staff, and it sounds like yours is currently very small. But doesn't a PM staffer take meetings notes? and if so, would s/he be paid overtime for weekend meetings of the board. Put another way, who records board meeting minutes??

It's really good that you're looking into this morass, but it's gonna be difficult. Try to recruit some other owners to join you, if possible.

JohnB26 (South Carolina)
Posts: 1,001

Posted:

Petition the appropriate court of law for an injunction ordering the HOA, Inc. to comply with the Covenant(s).

or

quit bitchin'

JonD1
Posts: 2,350

Posted:

Quote:

Posted By CarolynB6 on 03/29/2015 10:12 AM
Thank you everyone for your replies.

We are an HOA with 1,350 properties/lots. Some are for housing and some are for camping only. We have two lakes, a larger one for power boats (but not jet skis) and a smaller one for non-powered things like kayaks and cannoes. There are also swimming areas at each one. Many of our residents are seasonal or weekenders. We have a complete mix of expensive lakeside properties and 40 year old mobile homes. And the quality of the place has been going down for several years. For the past two years seasonal members have made complaints about how much it has deteriorated and that nothing seems to be getting fixed. The only 'new' item that has been put in was a jungle gym that was donated.

We bought here because of the resort like atmosphere that we perceived from our research online and our site visit. But it hasn't turned out to be like that. The community is controlled by about a half dozen people who refuse to let other people join in. When they try to they are told 'that's not the way we've done it for 20 years'. There is a lot of discontent.

One of the problems I delt with on the board was trying to get them more transparent in their operations. There are never more than 6-8 members that show up for board meetings and they refuse to change either of them to accommodate people that can't show up on Saturday at 10 am. At the last board meeting I took my camera and filmed it so that those who could not attend could have access to what was going on. There is now a sign on our meeting hall/garage that says audio/video recording not allowed without prior consent of the board. Everything they do tries to keep people out. And combining that with the tax problems and money questions is not doing anything to help.

My goal is to get a completely independent audit overseen by people who have not been on the board (nor their family members) in the last 3 years. And it has to be a complete audit, not just on tax documents like last time. Of course I'm receiving a lot of resistance.

So now that they are going to try to charge me up the wazoo for this information, I'm unfortunately having to research what I can do legally to make sure I'm not harassed, especially when it's at the expense of our office staff and, therefore, the membership.

Thanks for the links. I'll be looking into that this next week. Oh, and I just asked for the mailing list, basically, on a CD. About a 30 minute job that I would be happy to pay for. But the President of the Board yesterday (at the meeting) said she thought it was going to be a 'very expensive' job.

Carolyn

How long have you owned on this property?
How long did you serve on the board?
Were you elected if not how did you gain a seat on this board?
What were the circumstances reagrding your leaving did you resign? Were you not re-elected?
Do you reside on the property year round? How about the board members?

The audit prices on the low side might be reasonable. With that many units and the size of the property quite possible. What is the yearly budget for the property? What are the dues per year per property. I would guess there is a range of dues to be piad accroding to property type.

As to the audit never a bad idea depending on who is performing the work. And what materials are they given.

Your problem will be collecting the necessary records to aloow for a complete audit to be performed. Judging from their willingness to give you owner addresses I would expect an uphill battle.

As to the owner address list as mentioned quite simple copy the listing for mailings and provide you with a copy. There is not reason to go through legal documents scrubbing private information in order to get you a listing. BS

Now here comes the tough part your goal is to have an audit performed. My question, to what end? What is it you think the audit will show? What is it you suspect?

You just don't push for an audit because you woke up one day and siad that sounds like a good idea.

Sounds to me you have drawn lines between you and the board. Alone, forcing them to change or act in the manner you now desire will be quite a battle. In light of the fact 6-8 people show up each month for the meeting like many properties sounds like most don't give a damn.

Before you decide to take this on you best consider the long terms costs. Time, effort, money, and the possibility this board will fight you every step of the way and then some.

Some of the concerns you have listed are either unclear or you did not provide enough detail from which we can judge whether the board's actions should be questioned. Can a board member serve as a realtor? YES Can they arrange the sale and purchase on the property where they serve as a board member? YES Is the fact some property owners are dissatisfied with the efforts of this board enough to judge their actions? And the tax issue where they were forced to spend money for capital improvements is foggy to me.

Just what is it you plan to find in your audit? If it is ever done to your satisfaction?
And if your are right what then where does that take you?

Better consider where the road you are now on might take you bwefore you start your journey.

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