Community associations have an obligation to maintain business records just as all corporations do. Often our clients ask us what information and documents belong in association records. As a starting point, we like to address what does not belong in those records; namely, attorney-client privileged information.
Correspondence (including e-mails), memos, and attorney invoices all contain attorney-client privileged information that should be kept separately from the rest of an association’s records. Disclosure of attorney-client privileged information can result in waiver of the attorney-client privilege; in other words, once the cat is out of the bag, you can’t put it back in.
Association attorneys represent the association as a whole, but they act at the direction of the Board of Directors. Individual owners (association members) have the right to review association records upon request. They are not, however, entitled to review attorney-client privileged information/documents. It is essential that the Board protect attorney-client privilege information; not lumping that information in with general association records is a good starting point.
So what does belong in the association’s general records? A non-exhaustive list includes:
- The association’s governing documents (declaration, bylaws, rules and regulations, board resolutions, etc.);
- Board meeting minutes;
- Correspondence with owners;
- Invoices from vendors;
- A copy of the annual audit;
- Your reserve study;
- Association insurance policies;
- Any documents or information relied on to prepare the association’s taxes.
How long documents should be kept in the association’s records is a matter of common sense and sound business practices. The cable bill probably doesn’t need to be kept for as long as the financial audit or any other records relied on to prepare the association’s taxes. Important financial documents should be kept for at least three years. If you have questions about your association’s records, be sure to ask an experienced association manager and/or your association’s attorney for advice on a case-by-case basis.
If you have any questions we can answer, please feel free to leave a comment or contact us directly. We look forward to continuing this conversation with you in our future posts!