Confidentiality of HOA Financial Information

How confidential is financial information if it was never released to the membership?

North Carolina Condo Community of 144 units, CCR’s filed in 1981.

At the end of 2012, the then Board changed management companies and incurred $10,000 in termination fees because they didn’t read the contract. This information was never released to the membership. In fact, I don’t recall Financial Statements for that year even being sent out, so the major increase on that budget line wouldn’t have been noticed. I have this information because I became Treasurer in 2013 and discovered it while reviewing previous records. The detail is contained within the monthly report the previous management company provided the Board electronically.

It is now 2015 and we have been left with a Board of 2 of 5 who have no intention of changing that situation. A small group of concerned owner’s are trying to make changes and educate people to the fact that it’s not wise to just have anyone on the Board who will volunteer. We’d like to bring this $10,000 issue up to the membership to help make the point that it’s important to have the right people on the board spending the HOA’s money. All our Board members are appointed because we have never been able to get a quorum at any of our annual meetings. If they don’t like someone they just vote them off and the good board member's resign over frustration.

Our By-laws state that we can request access to this information, but since I already have it, what liability do I have by releasing it to the members. I am not presently on the Board.

I'm sorry, this does not answer this question. Maybe you were posting to another Discussion.

We are aware of the apathy the membership of our community has. A small group of concerned members are trying to change that by educating them on what happens when they don't care.

Thank you for your response.

Yes. You are not disclosing it to people at large, you are disclosing it to members of the HOA, who have a right to that information

You can lead a horse to water... you can not make them drink... Sorry but hard lessons in life learned here. Alot of pain suffered on this. so I do not give this advise from the surface. Yes, the info is the owners and they can access it. However, making it YOUR life purpose to do so is NOT. Plus do you know the reaction you will get and prepared for the pitch forks and barbs?

When people want action they will take it. You do not have to make them or educate them. Just like the truth it is out there... Whether someone else wants to know, you know so do your best...

Many corporations (including HOA's) only have to release financial information/statements once year and usually done at the Annual Meeting. Miss the meeting and you often will not get a copy. This a very common procedure when the declarant is still in control.

Our BOD monthly full financial reports from our MC are some 18-20 pages long. We release financial reports (Annual Budget, Balance Sheet, Profit and Loss Budget versus Actual, 3 reports, about 4 pages total) at our Annual Meeting. Our MC will electronically release the same 3 reports upon an owner's request. They will also release any and all financial reports (except the delinquency names/addresses) upon further request. Last I heard other than BOD Members, only 2 of 113 owners had ever requested more than the 3 reports and each requested them only once. No one has ever requested the entire report. I guess they do not suspect our BOD of financial shenanigans.

I am just trying to prepare you for the reality of what you want and what happens running down bunny trails... Don't expect the reaction to be "Oh my this has been going on??? Well I had better start participating and paying attention to my HOA's activities..." That's most likely NOT going to happen. It might be said of course but nothing but words...

The reality you need prepared for? "Your a board member and it's your responsibility. Why you telling me this? Isn't it your job to be responsible?" That response is enough to make anyone fume who has been working very hard to turn things around or to educate people. However, you have to be prepared for that as an answer and response.

Again, yes financials should be made available for any HOA member. However, don't expect your apathy to go away. It can be a waste of time and effort believing that if you just let everyone know what is going on people will participate and wake up. It doesn't work that way. What does? The existing HOA board working hard and getting the job done. Believe me, if you make it look easy there is always a bigger fish wanting to take over. Make it a mess, then you get a mutiny. Bottom line, work with what you got not what you wish you had...

When I got involved in my HOA back in 2009, I was labeled a troublemaker because nobody, the management company and attorney, wanted the status quo disturbed. Over the years served on various committees and becoming the Board President I looked at the financial aspects of the Association as "is this how I would run this IF it were my company".

I have always believed in complete transparency. Put the information on a website or web portal for all to view IF they are so inclined. Takes all of 5 minutes. If you take away the roadblocks, you take away the objections. Don't provide or make it hard to get, makes people think you have something to hide, whether true or not. After all, it's their money, some care, some don't, some will look at the financials and have NO idea what they are look at. For all they know, it's the box score from a recent Marlins baseball game.