IC 32-25.5-3-3(m) provides that an Association cannot charge a search fee for the first hour spent searching for records and after the first hour can only charge the actual pay rate of the person searching (maximum $35 per hours) up to a total of $200. You cannot make a profit on the search.The statute doesn’t specifically provide for copying costs, but we have generally used the government public records standard of charging actual copying costs, which allows approximately $0.10 per page. Again this is not designed to be a profit making venture. It is only designed to cover the actual costs of producing the records.Thrasher Buschmann & Voelkel PC
151 N. Delaware St.
Indianapolis IN 46204-2505
My response to this is, an Association should only charge owners the actual reasonable cost of copying records requested by owners, i.e., the actual cost to the Association of producing those copies. It should not be seen as a way for the Association to raise funds. First, community associations are generally non-profit corporations. Their purposes is to provide needed services to owners – not to generate profits. Second, charging more than reasonable copying costs will almost always cause owners to be upset and distrustful toward the Board and/or its property management. If the Association is running short on revenue, then a serious review of the level of the annual assessment may be called for. But charging excessive fees for copying of documents and records (as well as fees and fines) will nearly always cause more problems than it solves.Sean A. O’Connor, Esq.Finkel Law Firm LLC4000 Faber Place Drive, Suite 450North Charleston, South Carolina firstname.lastname@example.org
In general terms, HOAs are established as non-profit corporations or associations. As such, they are not established to engage in profit making activities. Runnig a for -profit copying business is outside the purposes for which a non-profit corporation is chartered.
An Association ought to be able to recover its actual expenses incurred in “pulling, providing and copying requested paperwork.” The Michigan Non-Profit Corporation Act provides that a corporation may require that a member desiring to inspect the corporation records may be required to pay a reasonable charge to cover the cost of labor and material for providing copies. This is a relatively new statutory provision and questions have arisen as to how expansive the “cost of labor” may be interpreted. Does the cost of labor include pulling and providing the requested paperwork? Some Associations have said yes. This question may be answered by the Michigan courts at some time in the near future, but I consider that unlikely. So, we will continue to work with the law that we have until then. We need a much more cost effective means of resolving these every day legal issues than that currently available through our courts.
Zelmanski, Danner & Fioritto, PLLC
Attorneys at Law
44670 Ann Arbor Road, Suite 170
Plymouth, Michigan 48170
(734) 459-0062Fax: (734) 459-5313
In South Carolina, where I practice law, the South Carolina Non-Profit Corporation Act provides that a non-profit corporation can only charge for the actual expense incurred in producing the requested documentation. Therefore, no mark up on the charges incurred may be imposed.
I suspect that the non-profit corporation act in the state where you reside contains a similar statutory provision and advise you to consult an attorney who specializes in the community association law field to provide you with specific guidance.Nelson Mullins
BNC Bank Corporate Center, Suite 300
Myrtle Beach SC 29577
The Co-op’s rights depend on the nature of the paperwork being requested. Many Managing Agents do charge fees for performing certain services, like copying an offering plan, filling out a lender questionnaire, or investigating and copying a proprietary lease. Some Co-ops split the fee with the agent, or simply take the fee themselves. However, the Co-op can’t charge for providing the names and addresses of shareholders, for example, or for pulling books and records from current locations in order to allow a shareholder inspection, both of which are statutory rights of the shareholder. Even in that regard, the Co-op can still seek reimbursement for reasonable expenses incurred in making copies, but only similar to any other disbursement.
Smith, Buss & Jacobs LLP
733 Yonkers Avenue
Yonkers, NY 10704
60 East 42nd Street
New York, NY 10165
The statute allows a reasonable charge but does not define what that is. First, I note that the statute does not require that any copy be provided, only that owners have access to records. With that said, I believe that a court would look favorably on a small per-page charge (to account for the time to find and copy the page and the paper/ink to copy) or an hourly rate (with the same considerations). An Association should not look at this as a profit center – being hauled in to court on allegations of unreasonable charges for records would cost more than the small profit the Association would hope to make.
Sara A. Austin
Austin Law Firm LLC
226 E. Market St.
York, PA 17403
Yes, there is a limit to the amount a condominium association can charge its residents to provide copies of records the association is required to keep open to inspection by its owners. In New Jersey, the charge cannot exceed an amount reasonably related to the associations copying cost, which may include any additional administrative expense incurred. Therefore, unless your governing documents provide otherwise, the association may charge the cost for copying.
It is important to keep in mind that the New Jersey Condominium Act provides that associations shall be responsible for the maintenance of accounting records in accordance with generally accepted accounting principles open to inspection by unit owners at reasonable times.N.J.S.A. 46:8B-14(g) (emphasis added). The accounting records required to be open to inspection by unit owners include (1) a record of all receipts and expenditures and (2) an account for each unit setting forth any shares of common expenses or other charges due, the due dates thereof, the present balance due and any interest in common surplus. Thus, while the association may charge a fee reasonably related to the associations copying cost to provide copies, the association must grant access to inspect the financial records required to be kept open to inspection without charge to the unit owners. Even if another party, such as the Associations managing agent or accountant, charges the association a production fee, the association cannot charge the owner a fee to merely inspect these records.
Finally, while the Condominium Act is silent as to whether owners have a right to make copies, and New Jersey case law has not resolved this precise issue, the New Jersey Department of Community Affairs takes the position that the right of inspection includes the right to copies of those documents. Thus, we recommend that you allow members to make copies of financial records that are required to be open to inspection.
Martin C. Cabalar
Becker & Poliakoff
1776 on the Green
67 Park Place, Suite 702
Morristown, NJ 07960