You’re mad as heck at your homeowners association.
You just received the annual report, and the board is spending what you consider to be an obscene amount of money on various repairs. You’d love to see the contracts with the vendors, and maybe the board meeting minutes to see how the hiring process was handled. But do you have the right to demand those documents?
Yes you do. In fact, there are a litany of documents that the HOA must make available to you upon written request.
Here is how to get documents from your HOA.
The process is governed primarily by two sections of the California Civil Code. Section 5200 identifies the documents you can demand, and section 5210 sets forth the demand procedure. I’ll provide the language from the sections below, but in summary, the HOA is required to provide copies of the documents within ten days of written request, and can charge you a reasonable fee for making the copies. In the case of the minutes, they must be available to members within 30 days of the board meeting.
Your request must be specific. Angry homeowners sometimes try to use the process as a form of punishment or to show that they are really not going to let this go. They’ll make a request like, “any contract related to the pool since 1972.” The HOA need not comply with such a demand because it is overreaching and fails to identify a specific document. If you think the HOA could get a better deal on the pool maintenance, then just ask for “the current vendor agreement for maintenance of the pool.”
Yes, asking for the last five pool maintenance agreements might be satisfying and could reveal that the HOA is paying too much as compared to prior agreements, but there are other variables to consider. Perhaps the last contract was $500 per month and the current contract is $1,000 per month, but that could simply be an indication that the Board was not happy with what the HOA was getting for the lower amount. The better approach, in my opinion, is to get the current contract, and then determine if the price is reasonable.
I’ve written about this here before, but I get calls from homeowners who are upset because they are convinced some vendor is a friend or family member of a Board member. They want to go to war over the process that was used in selecting the vendor, but that really isn’t the issue. Maybe the Board decided to use a particular vendor, specifically because it’s a family member who is charging a really low price as a favor. The ultimate issue will always be whether the price is fair.
Bottom line: If you’ve made a reasonable request for any of the documents to which you are entitled, and the Board and/or management company is not providing them, that could very well be because they have something to hide. Give us a call, and we will force the HOA to comply with the law, typically with just a demand letter.
Here are the Civil Code sections I referenced. The sections were renumbered, so I have also referenced the old numbers, in case those numbers come up in your research:
Civil Code §5200. Association Records and Enhanced Records.
For the purposes of this article, the following definitions shall apply:
(a) “Association records” means all of the following: [Old: Civ. Code §1365.2(a)(1)]
(1) Any financial document required to be provided to a member in Article 7 (commencing with Section 5300) or in Sections 5565 and 5810.
(2) Any financial document or statement required to be provided in Article 2 (commencing with Section 4525) of Chapter 4.
(3) Interim financial statements, periodic or as compiled, containing any of the following:
(A) Balance sheet.
(B) Income and expense statement.
(C) Budget comparison.
(D) General ledger. A “general ledger” is a report that shows all transactions that occurred in an association account over a specified period of time.
The records described in this paragraph shall be prepared in accordance with an accrual or modified accrual basis of accounting.
(4) Executed contracts not otherwise privileged under law.
(5) Written board approval of vendor or contractor proposals or invoices.
(6) State and federal tax returns.
(7) Reserve account balances and records of payments made from reserve accounts.
(8) Agendas and minutes of meetings of the members, the board, and any committees appointed by the board pursuant to Section 7212 of the Corporations Code; excluding, however, minutes and other information from executive sessions of the board as described in Article 2 (commencing with Section 4900).
(9) Membership lists, including name, property address, mailing address, and email address, but not including information for members who have opted out pursuant to Section 5220.
(10) Check registers.
(11) The governing documents.
(12) An accounting prepared pursuant to subdivision (b) of Section 5520.
(13) An “enhanced association record” as defined in subdivision (b).
(14) “Association election materials” as defined in subdivision (c).
(b) “Enhanced association records” means invoices, receipts and canceled checks for payments made by the association, purchase orders approved by the association, credit card statements for credit cards issued in the name of the association, statements for services rendered, and reimbursement requests submitted to the association. [Old: Civ. Code §1363.2(a)(2)]
(c) “Association election materials” means returned ballots, signed voter envelopes, the voter list of names, parcel numbers, and voters to whom ballots were to be sent, proxies, and the candidate registration list. Signed voter envelopes may be inspected but may not be copied.
Civil Code §5205. Inspection of Records.
(a) The association shall make available association records for the time periods and within the timeframes provided in Section 5210 for inspection and copying by a member of the association, or the member’s designated representative.
(b) A member of the association may designate another person to inspect and copy the specified association records on the member’s behalf. The member shall make this designation in writing. [Old: Civ. Code §1365.2(b)]
(c) The association shall make the specified association records available for inspection and copying in the association’s business office within the common interest development.
(d) If the association does not have a business office within the development, the association shall make the specified association records available for inspection and copying at a place agreed to by the requesting member and the association.
(e) If the association and the requesting member cannot agree upon a place for inspection and copying pursuant to subdivision (d) or if the requesting member submits a written request directly to the association for copies of specifically identified records, the association may satisfy the requirement to make the association records available for inspection and copying by delivering copies of the specifically identified records to the member by individual delivery pursuant to Section 4040 within the timeframes set forth in subdivision (b) of Section 5210.
(f) The association may bill the requesting member for the direct and actual cost of copying and mailing requested documents. The association shall inform the member of the amount of the copying and mailing costs, and the member shall agree to pay those costs, before copying and sending the requested documents. [Old: Civ. Code §1365.2(c)(1)-(4)]
(g) In addition to the direct and actual costs of copying and mailing, the association may bill the requesting member an amount not in excess of ten dollars ($10) per hour, and not to exceed two hundred dollars ($200) total per written request, for the time actually and reasonably involved in redacting an enhanced association record. If the enhanced association record includes a reimbursement request, the person submitting the reimbursement request shall be solely responsible for removing all personal identification information from the request. The association shall inform the member of the estimated costs, and the member shall agree to pay those costs, before retrieving the requested documents. [Old: Civ. Code §1365.2(a)(2), §1365.2(c)(5)]
(h) Requesting parties shall have the option of receiving specifically identified records by electronic transmission or machine-readable storage media as long as those records can be transmitted in a redacted format that does not allow the records to be altered. The cost of duplication shall be limited to the direct cost of producing the copy of a record in that electronic format. The association may deliver specifically identified records by electronic transmission or machine-readable storage media as long as those records can be transmitted in a redacted format that prevents the records from being altered. [Old: Civ. Code §1365.2(h)]
