Association Records: What’s Available to the Members – Article by Association Times

Neighborhood Link Your Community Connection Article by Association Times

The Association Bylaws and CC&R’s usually provide wording on member access to Association records. The books, records, and papers of the Association shall at all times, during reasonable business hours, be subject to inspection by any Member. The Declaration, the Articles, and the Bylaws of the Association shall be available for inspection by any Member at the principal office of the Association, where copies may be purchased at reasonable cost. How does the Board of Directors define what are the books, records, and papers of an Association.

Many members routinely ask for Association documents and records, but is every record of the Association to be available to the members?

To understand what can be made available, verify what is written in the Association’s governing documents. Many times these documents provide only vague generalized wording on what records the Association membership can access. If the Association governing documents are unclear, review the state statues regarding what information an Association must make available to the members of that corporation. If it is unclear what interpretation to take relative to state statutes, seek guidance from an Association attorney on what information to release to members.

Generally speaking, most state statutes contain wording that requires an Association to maintain and make available these records:

  • A permanent record of minutes of all meetings of its members and Board of Directors, a record of all actions taken by the members or Board of Directors without a meeting, and a record of all actions taken by a committee of the Board of Directors on behalf of the corporation.
  • Appropriate accounting records including the latest annual financial statements (which may include consolidated or combined statements of the Association, a balance sheet as of the end of the fiscal year, and statement of changes in cash position for that year).
  • A record of its members showing the number of votes each member is entitled to cast and the class of membership held by each member.
  • A copy of all of the following records should be kept at its principal office, at its known place of business, or at the office of its statutory agent:
    • Its articles or restated articles of incorporation and all amendments to them currently in effect.
    • Its bylaws or restated bylaws and all amendments to them currently in effect.
    • Resolutions adopted by its Board of Directors
    • A list of the names and business addresses of its current directors and officers.
    • Its most recent annual report, if applicable to that state’s statutes.

Certain limitations can be imposed on a members’ right to inspect and/or obtain copies of Association records. Some examples of those limitations include:

  • Inspection and copying the records of the Association described above is limited to regular business hours at the Association’s principal office.
  • The member’s demand is made in good faith and for a proper purpose.
  • The member describes with reasonable particularity the member’s purpose and the records the member desires to inspect.
  • The Association has a right to impose a reasonable charge to cover the costs of labor and material for copies of any documents provided to the member.
  • A member may not obtain or use a membership list or any part of the membership list for any purpose unrelated to a member’s interest as a member.
  • The membership list shall not be used to solicit money or property, used for any commercial purpose, or sold to or purchased by any person.

Some records of the Association have restricted access to Board of Directors only. These would include:

  • Personnel matters or a person’s medical records.
  • Communications between an attorney for the corporation.
  • Pending or contemplated litigation.
  • Pending or contemplated matters relating to enforcement of the corporation’s documents or rules.
  • Meeting minutes or other records of a closed and/or executive session of the Board of Directors.

Before releasing information to the membership, read your governing documents thoroughly, interpret any ambiguous wording in the governing documents, establish Association policies and procedures regarding release of information, review what is required by state statutes, and always seek a legal opinion from a qualified attorney when in doubt.

– Source of article, click here

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Comments
2 Responses to “Association Records: What’s Available to the Members – Article by Association Times”
  1. serola says:

    There seems to be a pandemic problem in getting financial records of an association. I am wondering if the recent court ruling of the Chicago Condo ordinance, which states only that a member has only to request the board records, and not provide any “proper purpose”, will provide a welcome solution to this problem?

    • AmberPM says:

      Right to Inspect Records
      Subject to limitations, members have the right to inspect and copy the association’s books and records. This includes electronic records. However, not all records are subject to inspection. Further, a request for information is not the same as a request for records. Finally, members’ inspection rights cannot be limited by contract or by the association’s articles or bylaws. Corp. Code §8313.

      Copying and Redacting Costs. Associations may charge for the cost of copying the requested documents and redacting sensitive information.

      Proper Purpose. A member’s request to inspect records must be for a proper purpose reasonably related to his or her interests as a member of the association. Civil Code §1365.2(e), Corp. Code §8330, Corp. Code §8333. The records belong to the association and any misuse of records by a member may subject the member to legal action for injunctive relief and damages.

      Right to Designate Agent. Members may designate another person, agent or attorney to inspect records. The member shall make the designation in writing. Civil Code §1365.2(b)(2), Corp. Code §8311.

      Deadlines for Production. The association must produce records within time frames established by the Davis-Stirling Act. If the association refuses to produce records which members have a right to review, the requesting member can go into court for an order that records be produced.

      Inspection Location. Records must be made available at the association’s onsite business office or, if there is none, at a mutually agreed upon location. If the parties cannot agree on a location or if the member submits a request for copies of specifically identified records, the association may copy the documents and mail them to the member. Civil Code §1365.2(c).

      Read more: Right to Inspect http://www.davis-stirling.com/MembersRighttoInspectandCopyRecords/tabid/1574/Default.aspx#ixzz1QDFpiOBj
      from Davis-Stirling.com by Adams Kessler PLC. If your association needs legal assistance, call us at (800) 464-2817.

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