What are HOA Records?
HOA Documents are essential because they provide homeowners with important information regarding their community, the rules they all must follow, the amenities that are offered, and the governing body that operates their community. HOA Documents include the Declaration, sometimes called CC&Rs for "Covenants, Conditions & Restrictions," by-laws, the budget, monthly or annual meeting minutes, and rules and regulations, also called rules and regulations. These Documents help inform homeowners on just about everything there is to know about their association.
• The CC&Rs. CC&Rs are essentially the governing documents that all homeowners must follow. They set forth deed restrictions on the use of real property in the community, protect homeowners from unreasonable intrusions of their privacy, restrict the ability of a new buyer to do just anything with their home, and preserve property values.
• The Bylaws. Bylaws govern the operation of the HOA. They detail the voting procedures, frequency of meetings, how elections are held , responsibilities and duties of the Board and officers, and association financial matters.
• The Budget. The budget is published yearly for the members for both their information and review and to comply with California Corporations Code Section 5320. It lays out all anticipated expenses for the year and allocates money towards capital improvements, maintenance, repairs, overhead, insurance, utilities, improvements and all other anticipated community expenses.
• The Meeting Minutes. Meeting minutes document all decisions by the Board, as well as direction given to the manager. By keeping accurate minutes, the Board can avoid miscommunication issues, as well as provide association, homeowners and their attorneys the ability to verify proper procedure was followed.
• The Rules and Regulations. The association’s rules and regulations spell out what homeowners must do—and what they cannot do—without risk of being penalized or breaking the covenants incorporated into the declaration. The rules are adopted by the Board of Directors.
The Right to View HOA Records
A central tenet of most homeowner association (HOA) governing documents is that they are part of the "public record" and open to public inspection. As a result, most public associations cannot deny access to prospective purchasers and lenders in regard to the governing documents. However, when it comes to other items besides the governing documents, attitudes vary. Many factors influence whether an association’s records are public information, including state laws, the governing documents and how widely the association has publicly disseminated the information.
There are big differences in the way states treat the disclosure of association documents. While some states have strict privacy laws that protect the association’s records from disclosure, others have wide-open access laws. In many states, such as Nevada and California, the disclosure laws are very consumer-oriented and associations have limited ability to restrict access to their non-confidential records. However, in most states, including Florida and Georgia, there is greater flexibility to keep all but certain limited categories of records confidential.
The association’s governing documents also obviously affect disclosure of the records. The governing documents should include a statement specifying which documents are considered confidential and which are not. Confidential items such as employment records, medical and financial information, and minutes of closed board meetings should be kept confidential and separately stored from the remaining open records. Care should be taken to segregate confidential items from potentially non-confidential items. For example, if the governing documents allow for disclosure of invoices, petty cash receipts and cancelled checks, large expenses should be paid from a separate account.
Notifying homeowners of their right to inspect the association documents can help protect the association, as well. While it may seem strange, posting a notice of the homeowners’ right to review the association’s records might be quite effective. Such notice could be posted on the bulletin board, newsletter or other publication.
State Laws on HOA Document Access
Laws regulating the public’s ability to access certain documents of homeowners’ associations may be found in either the state’s condominium or homeowner’s association act. Indeed, many HOA acts include provisions regarding the disclosure of association records explicitly. While the states are broad in their approaches to HOAs, clearly describing what documents associations must disclose and when, at least 35 states have passed laws regulating documentation and disclosure which include many types of community associations, not just condominiums. Some states, such as Pennsylvania and Texas, have clearly defined laws regarding disclosure. Others, such as Kentucky, do not expressly address whether certain documents must be disclosed but rely, instead, on the common law right of access that requires an association to make documents relevant to members and unit owners—including meeting minutes and accounting records—subject to disclosure. Because there is such great variance among the states in how the issue is being handled, it is important to follow the laws specific to your state. For example, Michigan has passed a law requiring every association to adopt written rules regarding an owners’ right to inspect and receive copies of certain documents.
Homeowner Right to View HOA Records
Homeowners have a right to examine and copy the books and records of a homeowners association. The association can attempt to claim that the association books and records have been lost or stolen. However, California Civil Code section 5200 (and 4525 in non-Civil Code jurisdictions), requires an association to produce its documents within 10 days of receipt of a written demand from a homeowner in good standing. The association can ask the homeowner to specify which documents the homeowner is seeking. The association can charge a reasonable fee for the documents which it can obtain from document production services or its copier service, but not from their outside counsel. The association may have the right to copy because it may need to black out personal information concerning other members. It’s common for associations to have to answer written inquiries concerning financial records and actions by the Board of Directors.
Associations have a legitimate purpose for wanting to review documents because they can help to determine the financial and contractual condition of the association, including:
- (1) Legal claims against the association and the number of legal claims that may be pending;
- (2) Association insurance documentation, including fidelity insurance; and
- (3) Management company contracts.
However, while associations have rights to protect their core records, owners have their own rights to access components of the association books and records.
How to Request HOA Records
Homeowners typically make a request for HOA documents (typically including association minutes, financial documents and other information) by simply sending an email to the board or manager. Unfortunately, many times that request goes unanswered or, worse yet, the request is not answered in a timely matter. So what should a homeowner do?
We suggest that he or she put a written request together. As the old adage goes: "Garbage in, garbage out." This is a great opportunity to make things clear upfront rather than engaging in a long back and forth with the board or manager. But a homeowner is going to have to do a little homework first (not much, but some). Most associations’ governing documents contain a provision that specifically covers requests for inspection of the association’s books and records. A careful review of the terms of that provision will give a homeowner all the information necessary to make the request.
First, a homeowner will determine whether a specific form or process is required for making a request (some associations do have a specific form that must be followed to a T). Second, the governing documents will provide parameters for what a homeowner can and cannot request. For example, the law entitles a homeowner to request financial documents for the previous 5 years; the association’s documents may go further than that and require production of documents for an even longer period of time. Third, and here is where a homeowner gets some teeth, the documents will come with any associated fees .
For example, in the case of the typical request for copies of minutes and financial documents, the governing documents will probably provide that the association is entitled to have a reasonable fee assessed. The law also requires a response to a request for inspection within 10 days but allows the association 30 additional days to produce the documents. Case law requires the association to waive fees that exceed 15 cents per page and charge for things like a manager’s wage (e.g., $20/hour), as well as postage. Believe it or not, what that means is you get charged for the manager walking around looking for documents and photocopying them. You will also get charged for postage.
Once a homeowner has carefully considered these items, they should put together a written request and be sure to reference the specific provisions of his or her governing documents. A sample request is as follows:
I am writing to request copies of the minutes and financial information for my community covering October 1, 2018 through September 30, 2019. Per XXX, I am entitled to copies of minutes and financial information for the 5 years immediately preceding this request, and I would like a copy of those documents. See XXX.
Please provide me with the requested documents via email. Should hard copies be required, please send them my way along with the fees associated with producing these documents as set forth in Article XXX of our governing documents.
When Access is Denied
If a member of the association is denied access to records for a legitimate reason, there is little to do except have patience. However, if the denial of access to records is not justified, the complaining member has several options under the law. First, a member may petition the courts for an order compelling access to records. This creates a potential for lengthy and expensive litigation and should be considered only as a last resort. Second, a complaint may be filed with the local Better Business Bureau or vendor rating services, particularly if the records provider services several associations. Third, a petition may be made to the association requesting that the board of directors terminate its relationship with the records provider and hire another records provider. Fourth, a request for mediation may be made if the provider is involved in mediating for associations in this state. In any event if there is a refusal to permit the review of records and there is no justification for that refusal, the board of directors of the association is obligated to review the situation, confirm there is no justification for its records provider denying access, and take remedial action.
Advantages of HOA Document Access
The ultimate benefit of access to HOA documents is the accessibility of the documents themselves. These documents should be available for easy and clear review. This is a huge win for homeowners, as well as for prospective buyers. The ability to scrutinize the association’s governing documents before making a purchase is invaluable. It gives the purchaser the opportunity to evaluate the covenants and restrictions of the association and fully understand the various obligations of unit owners. The prospective buyer can then better evaluate whether the community is a good fit for them. In an ideal world, the potential buyer would have given the governing documents to their lawyer, who would be scrutinizing them for any red flags relating to special assessments, changes in voting rights, or other provisions that might hinder the owner’s ability to live there .
For existing homeowners, the ability to see the agenda, board meeting minutes, material dealing with current or potential litigation or other relevant information, is priceless. The homeowner can review the information and get an idea of what is going on within his or her community and use that information to become more involved in the Association. With proper information, homeowners are also able to voice their opinions on relevant matters. Further, it gives the homeowner/homemember a significant tool to use in holding the board accountable and having a voice when it comes to the operations of their community.