Records Retention: Risks of Failing to Comply with the Statute - Limiting Exposure
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In my last 2 posts I discussed the dangers of failing to comply with the records retention provisions of Florida law. This post will touch on things the Association can do to limit its exposure.
First, the Association needs to ensure it understands exactly which records must be maintained by statute [§718.111(12) and §720.303(4)]. For example, I get many questions about whether the audio recording of Board meeting must be maintained. The truth is it depends. The recording must be maintained until such time as the minutes are approved and then it can be destroyed [Fla. Admin. Code 61B-23.002]. However, if there is a delay in approving the minutes, the recording must be kept as an official record and must be provided for inspection should such a request be made.
Second, in determining which records are to be retained, it is important for the Association to understand the “gray” area [§718.111(12)(15) and §720.303(4)(l)] set forth in each statute. In dealing with the gray area, the Association should consult with its attorney to determine what items fall within the gray area “catch all” as determined by the Legislature, Division and/or Courts.
Third, the Association needs to create a strict policy addressing where the documents are to be housed. The statutes provide for location limitations (Condominiums - 45 miles from the condominium or within the county in which the condominium is located; homeowners associations - within the state in which the HOA is located]) which are for the most part followed. The problem is that some Associations allow some of their records to be retained by their property managers, some by the Board members and others in a storage area on Association property. In these instances, it is usually difficult for the Board or even its manager to truly know where all the documents are such that full compliance with a records inspection request or discovery in a case is difficult to accomplish. A singular location needs to be chosen which allows the Association easy access to comply with a records inspection request or a discovery request in case. If this cannot occur as to the current year’s records, then a singular location as to the records of prior years should be created and a detailed list of where the current year’s records are maintained should be maintained by the Board and its manager for easy reference.
Fourth, the Association needs to create a policy through which it ensure that each time the members leave the Board that a full inventory of documents and the actual documents in the possession the former Board member is provided to the Association. In the spirit of being neighborly, the new Board should request the documents from the old Board members before contacting the Association’s attorney for assistance. If the records are not turned over however the new Board must seek legal assistance.
Fifth, whenever the records or a part of them are to be maintained by the management company, the Association with the assistance of counsel, should ensure the contract provides specific information as to what documents the company will be charged with maintaining and the manner in which the records will need to be turned over to the Association upon termination. The contract should also provide specific language regarding the repercussions to the management company for failure to turn over or otherwise improperly destroy or damage the documents of the Association. The Association’s attorney can help prepare the language for the contract to ensure these protections.
Sixth, the Association should ensure that if it suspects a set of documents will be or otherwise address the subject of a suit (threatened or filed) it should seek the advice of its attorney as to whether the documents must be retained or otherwise destroyed as part of the Association’s standard practice.
Seventh, the Association should create a policy which addresses destruction of records. This policy should address when a record is subject to destruction, who is responsible for the destruction and how it will be destroyed.
Please note that while no system is foolproof the key to its success is its ease. The easier the policy is to understand and follow the greater the likelihood it will be properly followed.
After a HOA foreclosure case is closed, ( or even if still open) are the records available for a records request? Can the HOA vendor collection lawyer declare the records are not available because of attorney client privilege? I thought all records should be available for inspection.
It would seem the owners need to be aware of what all is being done on their behalf....
Fran - Any document filed with the Court is considered a public record and therefore the Association can claim no privilege as to that document unless the Court has sealed the record. In terms whether a lawyer can declare a record or document privileged, it can be done under certain circumstances. For example if the document is an attorney-client communication, or if the lawyer believes that disclosure would violate a State or Federal law which protects the document or some of its content from disclosure. If an Association is in doubt as to whether a specific document is subject to disclosure, it should seek guidance directly from its lawyer.
can an association prevent a fully qualify buyer from buying a townhome where they don’t have a valuable reasons to denied the buyer.
They buyer meet the entire application requirement, they pass the background check with the management but the board does not want to approve the buyers because they feel like it.
Is that Legal