Knowing which association records should be kept, where to keep them, and how to store them can help an association maintain ac- cess 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 re-fer to work records, financial records, or even minutes from the meeting where a contractor was chosen to weigh future decisions.
Should associations keep records, and if so, what records should be kept? Most associations keep records, and some states have statutes that outline which records are required and for how long they must be kept. According to Greenstein, Minnesota does not have such a statute. An association’s gov-erning documents may also describe which records are supposed to be kept. Records that are commonly kept include financial records, tax records, unit files, meeting minutes and work records (including contracts with vendors, employee records, warranty documents, etc.).
Financial records and the manner in which they are kept are typically based on recommendations by an auditor or standard accounting principles. Tax returns and records should be kept for at least seven years, per the Internal Revenue Service, as that is how far back an association may be audited. It is recommended that the association keep it’s corporate re- cords indefinitely, as that is the association’s corporate history. Apart from government statutes and requirements from the governing documents, associations should use their own reasonable discretion as to how long to hold on to various records.
According to Greenstein, associations in Minnesota are generally required to keep meeting minutes. The details of the minutes are determined by their relevance and importance for future decisions and any potential problems. Decisions made by the board must be recorded and perhaps even the deliberations that led to those decisions as well. Certain facts and circumstances relating to decisions may be included in the minutes. Essentially, anything that may prove useful in upholding decisions in the future should be recorded, in case a decision is challenged, Greenstein advised. Meeting minutes should not usually be full transcripts of board meetings. The length of time for which minutes must be kept varies by state law and the community’s governing documents. “However, it is a best practice to always keep association minutes,” he said.
The location and manner of storage of the records depends on the association and any regulations from the state or the community’s governing documents, Greenstein said. An association with a clubhouse will usually store its records there, and one with a management company will usually store its records with them. If an association has neither of these things, it may choose to store its records in the home of a board member or the board president. If the information is stored at someone’s home, Greenstein said that person must make it available to other members on request. Many associations are now choosing to keep electronic records. When doing so, it is important to keep a backup and to make sure they can be reproduced on paper if needed.
Currently, there are no restrictions against making records available online for members to view. However, Greenstein advised, associations do need to be careful about posting the personal information of owners and other private information online.
Who has access to records and can some records remain private? Individual owners should have access to records, including financial ones. “Minnesota law provides that all owners in an association have access to the association’s financial documents,” Greenstein said. Associations may try to set a limit on the number of records an owner may review, but that ultimately depends on its governing documents and state statutes. Any process put in place by the association must be reasonable and lawful, and access to records will likely be allowed within reason.
What is an association’s responsibility regarding members’ personal information? Access to members’ personal information depends on the community’s governing documents and state law. “Minnesota’s laws are fairly silent on this issue,” Greenstein noted. Access over other privacy concerns also varies. For example, if an owner decided to build an addition to their house, such as a deck, community members would be able to see the paperwork for that in that owner’s file. In reality though, knowledge of the deck wouldn’t be kept private anyway as it would be quite obvious to neighbors. The only information that may truly be kept private would be anything connected with the community’s attorney-client privilege, he said, “or certain types of board meetings which can be closed to the owners.”