Members denied financials and refereed to HOA attorney

Recently our Michigan HOA has been withholding requested information, instead deferring any requests by members to the associations attorney.

Article XV:Bylaws states the following:

Books and Papers
Section 1.
"The books, records and papers of the Association shall at all times, during reasonable business hours, be subject to the inspection of any Member."

Members feel this crucial article was included by the authors of the Bylaws and Covenants to insure propriety, accountability, and trust between the board and the membership. They argue that it provides a certain degree of check and balances. The article is broad in scope and, members feel it intentionally excludes nothing.

This issue was brought up in a recent meeting where it was stated that the board doesn't have to honor requests for information because Article XV states:

"THE books, records, and papers. ...," instead of, "ALL books, records, and papers..."

Members have been told that the By Laws say "THE", doesn't mean, "ALL." Therefore, requests may or may not be honored at the discretion of the board, and any member would need to file a lawsuit if they are denied and still wanted information. Members feel this interpretation is not only inaccurate, but circumvents the intent of Article XV: By Laws, and had it been intended that way, there would have been mention of the boards ability to choose.

What is everyone's consensus of that interpretation, and do we feel that it warrants member's suspicion and will only serve to breed discontent and disillusioned members?

Exactly what documents are you seeking?

The law on record-viewing for HOAs and corporations is well-settled. You are a paying Member-Shareholder, entitled to monitor the financial well-being of the corporation. As you indicate, this is why the Bylaw exists. For nearly all documents sought, the courts have interpreted and will interpret the Bylaw you quote as you have interpreted it. There are a few legally confidential and attorney-client privileged documents that a HOA may withhold, but that's it. Send the board a letter of demand to provide xyz documents within 10 days, or you will take legal action. Be very specific about the docs you request. Typically nationwide the courts are comfortable with HOAs having 10 to 30 days to produce documents. If the documents are more than a year old, then the HOA may have more time to produce them. Charging members for any copies requested is usual. Viewing should be at no cost. In some states, HOAs may charge for the time it takes for the management company to compile the docs.

We do need to be careful that Dean's requesting non-privilged records.

But if he & other are requesting monthly financials, executed contracts, etc., they should be available. CA Civil Code lists all of the materials that HOA members may inspect. Does Michigan??

But even CA doesn't permit Owners to seek really old records or ask the HOA to compile records, e.g., how many Owners have been fined for x in the last 3 years?

I wouldn't want an HOA attorney who'd actually charge an owner a fee to write a request for the typically-sought records.

I do not believe what you listed is something required to provide. The salary of workers? Why? You going to cut their pay? The contract with the PM? That's a contract between board and the PM.

If you don't like the expenses you perceive then why don't you write up your own proposal on how things "should be"? You don't need any of that other information if you do. That's because you would be creating it all.

Your HOA is set up as non-profit or for-profit? Most HOA's are non-profit and have no hired personnel. That set up usually calls for transparency. However, a for-profit HOA would run more like a business/corporation. You have a job. Does your company tell you how many vehicles they own, employees paid, or other like requests submitted?

Dean,

Typically members should have access. However, your question was what is the consensus of that interpretation.

Honestly, our consensus doesn't matter.
What matters is what your Boards consensus is, what your governing documents say and what the applicable statutes (property and corporate) say.

If you, perhaps more, review the governing documents and applicable statutes and disagree with the Boards consensus then there are the following options:

1) Live with it.
2) Gather support and replace the board with individual who agree with you.
3) Get a legal opinion
4) Ask the courts for a ruling on the interpretation
5) Gather support and get yourself elected to the Board to have better access to records
6) Grumble about it
7) Sell and move so you don't have to worry about it

To help you explore those options, I offer the following:

MI CONDOMINIUM ACT applicable if you are in a condominium

MI NONPROFIT CORPORATION ACT applicable if your Association is incorporated as a nonprofit (most are, but check to be sure)

MI does not have a specific HOA statute

We are not a condo HOA. We are a non-profit POA. Many lots are undeveloped still. I agree, it's pretty clear what their options are, and of course the POA is betting on thst. So...Suck if up, sell, or lawsuit.

I was really trying to assess their chances or likelihood of a sucessful lawsuit really. Like I said, there are other things leading to discontent of many of the members. I forsee a lawsuit in the future. Something that's not new to the association.

Sigh...I'm not. Read the thread.

No. It was developed in the 70s. Thats been done for years now.

To avoid lawsuit ... the best option if many are not happy would be to recall and replace the BOD. If you have soon upcoming elections that would be the time to get owner's together and come up with like minded individuals to run for office. That would save money and avoid a recall and/or lawsuit. If they are referring everyone to an attorney ... bet they are spending a lot of money on attorney fees.

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TYPO Sorry - CANNOT Sale the list and CANNOT use for political advertising....See I'm no ROBOT. HUMAN

Regarding state law vs. bylaws, they usually HOA documents, but people need to keep reading because the law may say HOA documents take precedence if the Bylaws are tougher than the requirements in the state law or were already in force before the law took effect.