Association’s Records
Knowing which association records should be kept, where to keep them, and how to store them can help an association maintain access to important historical data. Association records should contain information that the board can use as a reference for future projects or possible evidence in a lawsuit or audit. Records are useful when the board is negotiating contracts for landscaping or snow removal. Boards can refer to work records, financial records, or even minutes from the meeting where the contractor was chosen to weigh future decisions.
What to Keep and Where to Keep It
Should associations keep records, and if so, what records should be kept? “Most associations do keep records,” said attorney David J. Byrne, noting that state statutes govern which records have to be made and kept. A community’s governing documents will also typically detail the records that have to be made and kept, he added. Byrne also explained that there are typically accounting requirements recommended by an auditor with regard to record keeping. With regard to the length of time records are to be kept, Byrne said relevant tax authorities may set forth requirements.
Byrne said that in general, associations are required to create and maintain certain meeting minutes, as well as financial records consistent with generally accepted accounting principles. According to Pennsylvania statute, associations must keep financial records that are detailed enough to allow them to comply with their statutory obligations relating to the resale of homes.
How detailed do board meeting minutes need to be? “There is no mandate,” said Byrne, “but we advise clients to have minutes that document decisions made by the board and perhaps detail the deliberations that led to that decision.” He explained that the facts and circumstances that relate to the decision are important to include in the minutes. “They could be used to refresh someone’s recollection two or three years down the road if there’s a challenge to a particular decision,” Byrne noted. “Minutes should almost always not be transcripts of board meetings.”
Where may association records be stored? Can they be stored in the home of a board member? According to Byrne, it depends on the association, along with the state statute or the governing documents. He explained that an association with a clubhouse or management company would typically store the records in the clubhouse or with the management company. “That’s the proper way to to do it,” said Byrne, but he noted that if a community doesn’t have a clubhouse or has a self-managed clubhouse, the board president or another board member might have to store records at their home.
Are there any restrictions against putting records online, available to a particular association’s members? According to Byrne, there are no restrictions connected with such online member access. He also noted that he is not aware of any law that governs the length of time that associations should make their records available for review.
Access to Association Records
Who has access to records, and can some records remain private? “Owners have access to records,” said Byrne. “Generally speaking, financial records are always available to owners.” By virtue of Pennsylvania law, all of an association’s records, including financial ones, should be reasonably available to any owner.
What is the process for residents to review records? “Any community governed by a statute that empowers an owner to review records limits the conditions that community associations can impose upon an owner in trade for the review,” said Byrne. He gave a scenario wherein there is a statute that states that the owners can have access to board meeting minutes without any limitations or conditions. In turn, a board may have no authority to accept a rule that requires an owner to pay a fee, or sign a confidentiality agreement, to obtain meeting minutes.
Can associations charge owners to see records? Can they set a limit on the number of records reviewable by a member? According to Byrne, unless these items are laid out in the state statute or governing documents, access should likely be decided on a case-by-case basis with regard to what is reasonable in the particular situation.
What is an association’s responsibility regarding members’ personal information? “A lot of that is governed by state law and governing document provisions, but in my view, there isn’t much privacy at all if you’re a member of a community,” said Byrne. As an example, he said, “If you submitted paperwork to put a deck on your home, and that’s in your file, why is that secret? Well, ‘it’ is not private. Community members have a right to know what’s going on.”
Byrne added that he is not aware of many privacy concerns, except perhaps connected with a community’s attorney-client privilege.