Homeowner demading finacials

Welcome to the site Pat and welcome to the world of HOA's.
Common problems you arrive with. Look at your documents, first. Read and understand what they require. Ok, if you are sure they do not give enough specifics, check your state laws if any, ok, that's done, and you don't have legal council available. Here's my advice.

Find out why this guy is being difficult. OK, some people are just difficult, but normally, an owner don't walk in a board meeting and start demanding to see documents, is there a story behind that. Resolve that. Ok, still being difficult, send him a letter from the board asking specifically what he wants to see, and request he be specific. As far as I know, you have to comply, within reason. You do not have to comply with some kind of blanket request for all documents or records. The board should inform the HO of any administrative charges in connection with all this. For a home owner to request he wants to see all checks or cancelled checks is not reasonable. Don't make his life difficult but the board first protects the association, the individual comes next. Start and maintain your paper trail, do nothing except by letter or official board function. He probably does have the right to review records, he does not have the right to a fishing trip. If this person is one of the rare ones that you can't reason worth, as I said, document everything and consult with an attorney, take his advice, and be upfront with your attorney about what is in your records. That is how you protect the association and that is your mandate, maybe you and the other guy both need a lawyer,I don't know, but the sooner you get this behind you the better. Therer is also no need to even answer him until you get a written request.

Ever heard of two sets of books. The request to see the cheques may have nothing to do with being difficult, and everything with the homeowner seeing if the two can be reconciled. Just because you don't understand the reason for the request doesn't mean the HO is being difficult. That is one strike against you, rather than the HO imo. Transparency is the best solution to someone who might actually be being difficult. Nothing to hide, don't deny access to all records. Canceled cheques are hardly confidential.

In IL, the law (as I interpret it) requires that the board makes these available but the homeowner needs to ask for them in writing and with a statement of purpose in mind. The association can deny if they feel the purpose is not sufficient, and the homeowner can take the association to court to argue it. If the association loses, they have to pay for the costs incurred by the homeowner and show the records. Your state may vary.

Pat this is why Boards need to have policies in place before the problem arises. Other states have set limits in what records may be viewed and copied. In addition they allow the BOD to set fees for copying and for the time of the person to pull the requested records (our MC charges $45 an hour) and for redacting records payable in advance. For instance OH condo law allows - adopt standards governing the type and nature of information and documents that are subject to examination and copying by Unit Owners, including the times and locations at which items may be examined or copied and any required fee for copying the information or documents.

The Association is not required to permit the examination and copying of any of the following from books, records, and minutes:

(A)Information that pertains to condominium property related personnel matters;

(B)Communications with legal counsel or attorney work product pertaining to pending litigation or other condominium property related matters;

(C)Information that pertains to contracts or transactions currently under negotiation, or information that is contained in a contract or other agreement containing confidentiality requirements and that is subject to those requirements;

(D)Information that relates to the enforcement of the Declaration,By-Laws, or rules of the Association against Unit Owners;

(E)Information, the disclosure of which is prohibited by state or federal law.

CA law allows:
Records are the property of the association and members are limited on how far back in time they can request records. Members may only request records for the current fiscal year, and the previous two (2) fiscal years. Civil Code 1365.2(i)(1). This limitation does not apply to minutes.

Records Not Subject to Inspection
The following records are not subject to inspection (see Civil Code §1363.05(b) and Civil Code §1365.2(d):
•board executive session agendas, minutes and information,
•personnel records (other than payroll records),
•litigation files or records protected by the attorney-client privilege,
•pending contracts,
•Legal invoices,
•records likely to lead to identity theft,
•records likely to lead to fraud,
•records reasonably likely to compromise the privacy of an individual member (such as owner records, including goods or services provided to members for which the association received monetary consideration other than assessments),
•disciplinary actions, collection activities, or payment plans of other owners,
•personal information, including social security number, tax id number, driver's license number, credit card account numbers, bank account number, and bank routing number,
•interior architectural plans for individual homes,
•private owner correspondence to the board (unless a letter is used as evidence in a disciplinary action against another owner, in which case the disciplined owner has a right to see it).

Pat,

From your post, it is impossible to determine what type of community association your HOA is. Is it a condominium? or a true HOA? and if it is a condominium, is it a "New Act"/Washington Condominium Act condominium which was formed after July 1, 1990?

Assuming it is a New Act condominium, Washington State law provides:

RCW 64.34.372
Association records — Funds.

(1) The association shall keep financial records sufficiently detailed to enable the association to comply with RCW 64.34.425. All financial and other records of the association, including but not limited to checks, bank records, and invoices, are the property of the association, but shall be made reasonably available for examination and copying by the manager of the association, any unit owner, or the owner's authorized agents.

Assuming it is a true HOA, Washington State law provides:

RCW 64.38.045
Financial and other records — Property of association — Copies — Examination — Annual financial statement — Accounts.

(1) The association or its managing agent shall keep financial and other records sufficiently detailed to enable the association to fully declare to each owner the true statement of its financial status. All financial and other records of the association, including but not limited to checks, bank records, and invoices, in whatever form they are kept, are the property of the association.

(2) All records of the association, including the names and addresses of owners and other occupants of the lots, shall be available for examination by all owners, holders of mortgages on the lots, and their respective authorized agents on reasonable advance notice during normal working hours at the offices of the association or its managing agent. The association shall not release the unlisted telephone number of any owner. The association may impose and collect a reasonable charge for copies and any reasonable costs incurred by the association in providing access to records.

Accordingly, you may have no choice but to allow the owner to inspect the checks. However, as suggested, you may ask the owner what he is looking for and narrow down his request. Usually, you can get him to narrow his request unless he really does suspect fraud/mismanagement and is unwilling to tell you ahead of time what he is specifically looking for.

I have to disagree with you RobertR1. I think having a reasonableness standard would actually create more headaches and problems for community associations. While the law creates a burden on associations, it also sets out a relatively easy bright line to follow for certain records specified in the statute. Management companies can give access to the records without too much supervision by the board.

Under your view, who would determine whether the request was "reasonable"? the Board? the management company? In my view, the record inspection is one of the checks and balances of the owners against the board and management. How else can they determine if the association is being mismanaged?

If the Board or management can determine whether the request is reasonable, it will always find requests for records indicating their wrongdoing or are otherwise unfavorable to them are unreasonable no matter how specific the request. Alternatively, if the request is too specific, they will accuse the owner making the request of harassing the board, its members, or the property manager and deny the request for that reason.

What would the appeal process be if a request was determined to be "unreasonable"? Would the owner be faced with filing a lawsuit to get the records which is costly to the association? The law on determining what is/is not reasonable would take years to develop.

Moreover, there is often a time component to the request. For example, an owner may need the documents before the board votes on a particular issue so he can provide his feedback on that issue. If the Board also needed to determine the reasonableness of the request, then the owner often wouldn't get the documents until after the board voted on the issue. At that point, the purpose of the request would be frustrated.

Also, record requests are made by owners who care about their association. Isn't it better to encourage these people to get actively involved in their association rather than discourage them and let them join the crowd of apathetic owners?

With all that said, I do think an association can make some inquiries into what will actually satisfy the requester and the reason for the request. Often, a compromise can be worked out.

Also, many of these state laws needed to be updated to reflect modern times. Is email an association record? And what protections, should there be to prevent identity theft and protect privacy?

The last two posts here seem to be in response to my latest entry.

I suppose I failed to clarify what I am talking about. I brought up the "reasonable" issue because it is referred to in some state laws about discovery.
But more to the point, this site, for the most part has had little or no feedback concerning what is forthcoming when an owners requests records and documents.

I can't recall a post where there is any reference to what actually was produced and what specifically was requested. I do know from personal information that a request for discovery of condo records resulting in a lot of lawyer correspondence about what specifics the owner was requesting. Now if a HOA/condo keeps files for 7 years, does this mean that those files have to be dragged out of storage and presented to the requester? In my twenty years I have heard an awful lot of owner talk about requesting records, myself included, nearly all is resolved with a little discussion about what is requested.

How many out there have actually been through this process and how was all this resolved. I completely support the owners right to know what is going on in their association, and I also support owners that pay attention along the way and have enough knowledge to know what they are looking for. All bets on this are off if a criminal act is suspected, then, the skies the limit, just be right.

Don,
Your:
I believe owners associations have a unique relationship with attorneys. The attorney-client privilege may apply to legal advice and actions concerning a third party. However, I do not believe it applies to legal advice concerning governing documents and interpretation thereof. The owners are stakeholders for any such advice and should have access to instructions to and opinions from attorneys, and possibly other professionals — accountants for example. Moreover, the advice is funded from association dues and assessments paid by owners/members.
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What do you think about some requirement to cause the Board to enter into the minutes any lawyer correspondence that fits your criteria concerning the second part of the above? That information is bought and paid for by the owners and only Board members or select people are privy to this. I am pretty sure our Boards would assume that if the lawyers tells them anything they only need to use this information to resolve an issue and not as general information, or a product of how the associations money is spent.

Don,

I have no problem with posting the board member's meeting package on the assn's website nor with providing a copy of it to any member who requests it; however I certainly would limit it to any info that is not confidential, i.e. the portion of the package that pertains to the closed session. You say FL addresses this issue; I certainly hope it also excludes closed session material.

As an aside: the meeting packet for my last board meeting was 23 pages long and the closed session portion was an additional 26 pages! The board of my former assn, of which I was a member, never even had a meeting packet. Copies of the previous board meeting's minutes and the treasurer's report were handed out to each board member at the meeting and that was about it!

Donna,
Then what is your opinion about Lawyer/board conversations that the association has paid for? Does the confidentiality restriction you are placing on these document (if you are, I am not certain) apply is that case likewise. Some say after the issue is decided in the courts the files are then opened and can be subject to discovery. It is no longer lawyer/client confidentiality, in fact Don is saying it can not be because the contract is also between the lawyer/and membership. That is what I am hearing.

As a licensed attorney myself and a strong supporter of open records, I think it is appropirate for documents subject to the attorney-client privilege or work-product to be excluded from records that are available to owners. Otherwise, you would destroy privilege since regular users are not part of the control group of people who can act on that information and those statements, whether by a board member, the manager, or the attorney, could be used against the association and/or the attorney. This is true even after a matter is over with since a similar issue could come up later.

However, one of the tricks of the trade to deduce some of the same information is to request to inspect or copy the attorney's invoices if allowed under your state law or governing documents. Since the invoices often go to a management's accounting department and not the Board or the property manager, they usually aren't protected by attorney-client privilege or attorney work-product. As such they are available and can give you a general description of the work being performed, the people contacted by the attorney, dates and amount of time spent, money spent, etc. For example, if you see multiple invoices regarding the same issue, you can infer the association did not like the opinion they received from the first attorney and wanted a second opinion. While it is not standard practice to request to inspect them in condominium law matters, it is standard practice in other areas of the law to request them in discovery.

And yes, that is a tip for the board members and managers out there to have a discussion with the association's attorney on the appropirate level of detail on the invoice if the invoice is open to inspection and copying.

To continue the discussion of attorney-client privilege, I have created a separate thread, Attorney-Client Privilege.

Helen,

I must take exception to your statement that the fact that your treasurer hadn't paid assessments for 2 years is cause for delinquent account info to be made public. What that really amounts to is cause to remove the board members for not performing their fiduciary resp. to the assn. The BOD should know who all the delinquent members are and take appropriate action. If that means taking action against a fellow board member, so be it. It may also be stated in the bylaws that a delinquent member is automatically removed from the board. It's the board's resp. to run the assn not the members. If the members must become involved in order for the board to perform their duties, then that board needs to go!

It is amazing. And does it mean that every member of the board doesn't want to do anything about it; or does it mean too many board members are afraid to speak up -- or just don't care? However, letting the h/o's know the names of those who are delinquent is not a cure for this!