Homeowner Leader Q&A - Legal Experts Answer Your Questions!
Q: I have asked to inspect records of my association multiple times. When I do, I'm met with this utter exasperation as if my request is the end of the world and I'm a huge pain in the rear. I know it's within my right to inspect records and I go about it the right way. Why then would the manager and the board of directors do everything they can to make it difficult? Are they afraid I'll find something out? I have to make a formal request (which seems silly in the first place) and then we have to schedule a time and a place and someone has to watch me. Shouldn't records be readily available and easy to access? Why the hassle?
A: As an owner you have the right to inspect association records. However, what constitutes association records is specifically defined by state statute and in some cases by the governing documents, so not everything you request may be a record that is available for review. Often times managers and the board of directors will have to reach out to the association’s attorney to determine what are association records and what can be turned over to an owner. Because the association is in possession of information regarding owners that may be personal and sometimes private, it may seem like a manager or the board of director’s is being difficult, when in fact they are simply making sure they follow the law and protect individual homeowner’s privacy. If an owner is requesting something simple like a copy of the Declaration or the Rules and Regulations then the manager should easily be able to make those documents available. However, if an owner wants to know if other owners have received fines or are delinquent, these are records that state statute specifically allow the association to withhold. While we know it can be annoying or not as convenient to have to schedule a time and place to look at the documents the association is simple following the state statutes and making sure that the association is protecting all homeowner’s information in a consistent manner.
Q: We just hired a new management company and I want to make sure that we're not going to fall into the same situation that we did with our last. As a board of directors, are we supposed to be "hands on" or do we simply back off and let the manager handle everything? We like to know what's going and we've been told that we micromanage too much. For me, I love the community which is why I'm on the board. I don't think that asking for summaries and follow-up is too much. It seems like we simply don't know how much we should ultimately trust our manager. I don't want to end up with things falling apart or not being done because we didn't want to annoy our manager or management company.
A: First of all, thanks for your service on your community association board. As you know, being on a community association board is a lot of work (even with the assistance of professionals working with your community) and to volunteer your time to ensure that your community is prosperous can sometimes feel overwhelming. The short answer to your question is that while a qualified and experienced professional manager can certainly go a long way to guide a board of directors, his/her job is not to handle everything for the association.
You may have heard that the board operates in a fiduciary capacity for the homeowners, and as such, has a fiduciary duty. This simply means that the board has an ethical and legal obligation to make decision in the best interests of the entire association. And in doing so, the board has an obligation to be “hands on.” You have the obligation, as a board member, to protect the association’s assets, budget responsibly, plan for the future, invest wisely, etc. And while you may have a community association manager that can aid the board in furtherance of these obligations, the board is ultimately responsible for the oversight of association operations. The manager works closely with the Board – as an advisor – not a board member or decision maker.
So don’t be afraid to run your business (because the association is a non-profit corporation!) accordingly. You have the right to request summaries and follow-up about community business – your board shouldn’t feel like pests in doing so!