I am one of a couple employees in a small, self-managed, association. Regarding opening the association records to owners. How much detail are they allowed to see?
The manager is concerned that if someone insists on details (ie: specific individual names and duties) that this information must be provided. I thought that the owners should only be allowed to know how much is spent on maintenance and not be given specific “association employee” names, salaries and duties, because that would be breaching confidential information. However, might the names of any hired outside contractors such as pool companies, gardening companies, laundry facility company, etc., be allowed?
Member rights to association records are found at Civil Code 5200-5240. Members may inspect interim financial statements including balance sheets, income and expense statements, budget comparisons, and general ledgers. Members also may inspect executed non-privileged contracts, written board approvals of invoices or proposals, association tax returns, reserve account withdrawals and balances, check registers, and canceled association checks. Some lawyers take the position that their fee agreements are “privileged” so that members cannot see them. I disagree. Attorney billing rates and practices are not confidential (but attorney invoices are privileged, since they describe what the lawyer is doing or advising upon).
Also available for inspection are invoices and receipts, statements for services rendered, approved purchase orders, association credit card statements, and reimbursement requests submitted to the association. These are considered “enhanced records” and the association may “redact,” or obliterate, personal identity information from the document.
Members also may inspect or copy the governing documents, and meeting agendas and minutes from board open meetings, or membership meetings, or committees consisting solely of directors.
Members may also inspect or receive copies of a membership list, which includes names, property addresses and mailing addresses of the owners, excluding any owners who under Civil Code 5220 have opted out.
Except for minutes, members may request records for the current year and the previous two years. The association has 30 calendar days to produce records from the previous 2 years, and 10 business days to produce current year records.
The process to inspect records is described in Civil Code 5205. The association can charge the requesting member the actual cost of making the copies as well as up to $10 per hour for redaction of enhanced records.
Civil Code 5215 lists association records which are specifically not required to be produced, including member disciplinary records, closed session minutes, and personnel records. “Personnel” means association employees, and persons being paid by the association as independent contractors are not employees.
Homeowners: Make your requests specific and reasonable. Use the powerful access rights of these statutes wisely, and not as a bludgeon. The right to copy or inspect does not include the right to explanations – do not expect to be able to interrogate or argue with the manager or treasurer about them.
Boards and managers: Recognize that owners have very broad rights of access to association financial records. The response to antagonistic and accusatory owners is often to resist cooperation, but this often only inflames their suspicions. Be disclosure oriented. Consider placing as many of the accessible documents as possible on a “members-only” area of the HOA web site.
Thanks K.H. for your question,