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Subject: Can Owners inspect Reports that Fulfill a contract?
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KerryL1
(California)

Posts:6045


12/26/2018 6:31 PM  
In CA, as in most states, owners in HOAs may inspect many, many types of records. Generally what's not available to inspect are Owners' discipline, fines, payment plans, etc.; materials subject to attorney-client privilege, written evaluations of staffers and the like.

Now that I'm no longer on our board--chose not to seek reelection--there are some recent reports I'd like to review. They both involve contracts, which I know I can inspect and which I possess anyway. What I'm trying to learn is if I have the right to inspect the reports that grew out of the contracts. I don't seem to see the answer in CA's Davis-Stirling Act. I might be overthinking this.

For example, we had the exteriors of our 20+ story twin towers painted and we contracted with a project manager to monitor the work and write a final report about it. In it, he was supposed to evaluate the condition of our building caulking. The work finally finished and I want to read this report.

I think this boils down to a legal question, but I sure don't want to spend the $$ on an opinion. My spouse & I are saving up for a 3-month self-organized trip abroad in the late; spring, which is (just) one reason I left the board after 12 years.
TimB4
(Virginia)

Posts:16092


12/26/2018 7:54 PM  
I would simply try asking first (unless you did and were told no).

Personally, I would think that such a report would be attached to minutes of the meeting it was presented/discussed.
FredS7
(Arizona)

Posts:867


12/27/2018 1:36 PM  
Posted By TimB4 on 12/26/2018 7:54 PM
I would simply try asking first (unless you did and were told no).

Personally, I would think that such a report would be attached to minutes of the meeting it was presented/discussed.




For sure.

We regularly share reports with prior board members to take advantage of their experience.

Unless you were a nuisance when on the board I would be surprised if you could not get it just by asking.
TimB4
(Virginia)

Posts:16092


12/27/2018 3:27 PM  
Posted By FredS7 on 12/27/2018 1:36 PM

Unless you were a nuisance when on the board




Or simply perceived as one.
KerryL1
(California)

Posts:6045


12/27/2018 4:24 PM  
It, Tim, seems strange in retrospect that reports emanating from certain contracts were not on our own meeting agendas and entered as some sort of attachments to our minutes. Off hand, I'd say we've had maybe three of that type in the past five years. We simply never have acknowledged them though I think it's routine at a lot of HOAs.

I emailed a formal request today to our Property Manager. Whether or not I was a "nuisance" as a director, CA HOA laws gives all owners the right to inspect many many records. I was hoping someone would know if legally this particular kind of record qualifies as one owners may inspect & copy.
AugustinD


Posts:1271


12/28/2018 8:14 AM  
I think Davis-Stirling is on the side of prohibiting such a report from being shared with members. From https://www.davis-stirling.com/HOME/Records-Not-Subject-to-Inspection :

"The following records are not subject to inspection by members (see Civ. Code §4935) and Civ. Code §5215):
...

correspondence between members, vendors or others with the board...
... "

It seems like the report may be an Executive Session item, since it could relate "to the formation of contracts with third parties" (California Civ. Code 4935)

If you are denied the report, you might use this section of Davis-Stirling, from https://www.davis-stirling.com/HOME/Statutes/Civil-Code-5215#axzz2CR2ljirY :

"(d) If requested by the requesting member, an association that denies or redacts records shall provide a written explanation specifying the legal basis for withholding or redacting the requested records."

Where I am, the Board and manager considers any member making any records request, as allowed by the governing documents and statute, to be a nuisance and deserving of the board's and manager's explicit and public ridicule. If you want a record where I am, plan on waiting over a month. When the manager finally has the record, you then must sign a "records release" form that threatens you with legal action if you do any of several things with the record, written in legalese intended to intimidate.
RichardP13
(California)

Posts:3193


12/28/2018 9:37 AM  
Augustin,

What you posted is the legal opinion of a partner of the law firm that produces the Davis-Stirling.com website. While the site is the best in the country, most of it is legal opinions, with the civil or corporation code to help make their case. You have to be able to distinguish between fact and opinion.

In this instance, correspondence between members, vendors or others with the board was used, yet it is NOWHERE is either citations, §4935 and §5215.

In my opinion, the report is not privileged and I would make available to a member upon request. BUT, none of my associations have legal counsel on retainer so a lawyer is not around to muddy the waters. In Kerry's case, my best guess is she won't get the report as the president will ask legal counsel and she will get the answer she wants from the attorney. That's the way things unfortunately work.
AugustinD


Posts:1271


12/28/2018 2:07 PM  
Richard,

From Civil Code §4935. Executive Session Meetings:
"(a) The board may adjourn to, or meet solely in, executive session to consider litigation, matters relating to the formation of contracts with third parties, member discipline, personnel matters, or to meet with a member, upon the member’s request, regarding the member’s payment of assessments, as specified in Section 5665. [Old: Civ. Code §1363.05(b)]"

From Civil Code §5215. Redacting Information:
"(a) Except as provided in subdivision (b), the association may withhold or redact information from the association records if any of the following are true:
...
(5) The information contains any of the following:
...
(D) Minutes and other information from executive sessions of the board as described in Article 2 (commencing with Section 4900) [see Section 4935 in this post to hoatalk.com], except for executed contracts not otherwise privileged. Privileged contracts shall not include contracts for maintenance, management, or legal services."

It seems reasonable to me to surmise that this report may relate to the 'formation of a contract with a third party.' Thus the Board may discuss it in an Executive Session. Subsequently the Minutes of said Executive Session may be withheld from Members.

The attorneys of the Davis-Stirling commercial site put 'reports' under 'correspondence between vendors and the board.' In terms of what the statute actually says, this seems reasonable.

If you want to argue that the report exists independent of the Exec Session, then that's your prerogative. As I wrote, I think Davis-Stirling here is on the side of not making the report available to members. It makes sense to me, because I do not want every Tom, Dick and Harry vendor learning from a member the details of a report attesting that the swimming pool liner has underground leaks and will have to be replaced soon. I do not like that the report, to me, may legally be withheld from a member. But I can understand the reasoning.
AugustinD


Posts:1271


12/28/2018 2:30 PM  
Correction: The attorneys of the Davis-Stirling commercial site appears to me to feel that 'correspondence between vendors and the board' is the stuff of Executive Sessions. In terms of what the statute actually says, this seems reasonable.

What I cited are the arguments that a board, opposed to transparency, could use to withhold this report from members. Perhaps it would be better to cite the parts of Davis-Stirling that argue /for/ this report to be available to members.
KerryL1
(California)

Posts:6045


12/28/2018 3:01 PM  
I reviewed the statutes again. The project management contract to oversee painting our exteriors was signed months ago while I still was on the board. A second part of the proj. mgmt. contract was the firm would write a final report certifying that the painting was complete and done to according to the terms of the painting contract. It's this report that I want to review. It should, then, not contain any negative information as in Augie's example.

Oh, but what if it does??? Hmmm, now that could lead, say, to some sort of legal action against the paint. And THAT would be privileged, right? (I've never been involved in any kind of legal action, so don't know what I'm talking about)

So...it's not a "contract in formation," which can be kept confidential; it's already been completely executed. Luckily, as Augie shows us, if need be I can rely on Civ. 5215 "(d) If requested by the requesting member, an association that denies or redacts records shall provide a written explanation specifying the legal basis for withholding or redacting the requested records." So even if a phone call to our HOA attorney results in some reason for turning down my request, I'd need to see it in writing.

Also per CA statute, the PM should have this to me within 10 days of my request. I also see that I may resort to small claims court if the PM denies my request without good reason.

I appreciate both replies as they help me think about this topic. Another evaluation report that I HAVE reviewed plenty of times relates to a contract still in formation. I'd like it to be shared with owners, but I think it still may be defined as "confidential." But, what about this?? A few months ago, the president cherry-picked direct quotes from this evaluation for her monthly Message in our newsletter. As a director at the time, I know that the Board did not vote to approve her revealing any of this report. I think she was way off base. What do you think?
AugustinD


Posts:1271


12/28/2018 3:35 PM  
-- I agree this project manager's report could be critical of the work. Maybe indicating that certain steps were not done and should have been done? The reason for not allowing members to see such reports appears to be concerns about defamation. More on this from the Davis-Stirling commercial site's attorneys: https://www.davis-stirling.com/HOME/Contract-Formation

-- I think the report could lead to a new third party contract and so be privileged. (That's I, pretending to be a board that does not like sharing records, talking.)

-- I see Kerry's point about how, without transparency, a board could cherry pick xyz from reports and, at the same time, not allow members to see reports that take an opposite point of view. Is a member really supposed to trust that the Board is making sound decisions, especially when it comes to infrastructure, without being allowed to see all expert opinions? Yet I cannot find a category of 'member-viewable records' into which this report would fit, per https://www.davis-stirling.com/HOME/Statutes/Civil-Code-5200#axzz2CR2ljirY.
KerryL1
(California)

Posts:6045


12/28/2018 5:01 PM  
I'm now inclined to think the PM will not send me the final report from the project mgr. unless it's fairly innocuous. I do understand why. I also requested a copy of the invoice showing our HOA paid this proj. mgr. the $3,500 for their final report. This at least will show me that the proj. mgr. did something to earn it.

Say, Augie, it wasn't "the board" who released a few details from a confidential evaluation that relates to a contract in formation. It only was the president with NO vote by the board to release ANY of that evaluation report. Even withIN that report, there are statements that clarify her selected quotes in a way that are at odds with with what she wrote.

The Board's increasing secrecy about many matters is another reason I didn't seek reelection.
AugustinD


Posts:1271


12/28/2018 6:42 PM  
Kerry,

Understood that the HOA President abused her power.

I am sorry you have to live with this.

Maybe the report will be handed to you without further fuss.

Joyous new year to you, yours and all the members of hoatalk.com
RichardP13
(California)

Posts:3193


12/28/2018 7:11 PM  
People are confusing contract formations and the product that comes from them.

For instance, you could bid out to have the annual taxes and annual review/audit preformed. That could be handled in executive session. The annual review report the vendor produces though has to be sent to all homeowners within 120 days after the end of the fiscal year.

In Kerry's situation, I have to assume the product that was called for was not confidential and therefore should be available upon request.

I've been doing this for ten years. I might have gotten three requests for a report produced outside of the annual review and that would cover over 125 HOA's in that period.
AugustinD


Posts:1271


12/29/2018 7:31 AM  
Richard, the report is a communication from a vendor to the Board, not concerning taxes or an annual review/audit, but concerning infrastructure. A Board that wants to be opaque can argue that the communication is potentially "relating to the formation of contracts with third parties." Consequently, and per Civil Code 4935, this communication may be deemed material for an Executive Session. Per Civil Code 5215, "minutes and other information from executive sessions" may be withheld from Members.

Maybe that's not how you would tell your HOA boards to handle this, but to me it is clear refuge for a HOA board that does not like turning over records.

The statutes on HOA record reviews say nothing about being able to review a work product that is written.

Any statutory requirement for the mailing of the annual taxes and audit audit is n/a.

I appreciate that you think people should not question your answers, because you are CMCA certified et cetera. But would a judge in Small Claims Court be persuaded that your credentials translate to meaning you are right? For Kerry to make any case, in an informal letter to the board or in small claims court, I think she needs to be able to cite a statute that places this report squarely among the records HOA members are legally entitled to review.
RichardP13
(California)

Posts:3193


12/29/2018 9:49 AM  
Posted By AugustinD on 12/29/2018 7:31 AM
Richard, the report is a communication from a vendor to the Board, not concerning taxes or an annual review/audit, but concerning infrastructure. A Board that wants to be opaque can argue that the communication is potentially "relating to the formation of contracts with third parties." Consequently, and per Civil Code 4935, this communication may be deemed material for an Executive Session. Per Civil Code 5215, "minutes and other information from executive sessions" may be withheld from Members.

Maybe that's not how you would tell your HOA boards to handle this, but to me it is clear refuge for a HOA board that does not like turning over records.

The statutes on HOA record reviews say nothing about being able to review a work product that is written.

Any statutory requirement for the mailing of the annual taxes and audit audit is n/a.

I appreciate that you think people should not question your answers, because you are CMCA certified et cetera. But would a judge in Small Claims Court be persuaded that your credentials translate to meaning you are right? For Kerry to make any case, in an informal letter to the board or in small claims court, I think she needs to be able to cite a statute that places this report squarely among the records HOA members are legally entitled to review.



I have a legal opinion on this topic, do you?
KerryL1
(California)

Posts:6045


12/29/2018 10:17 AM  
Well, I think you nailed it, Augustine and it was my question: Is there anywhere in CA statutes that states I may review the written results, "findings," or analyses of a completed contract. Any Owners may review the executed contract itself. I think your word, Augie, captures the obstacle. I want to review a "work product," and nowhere can I find that I may do that.

"For Kerry to make any case, in an informal letter to the board or in small claims court, I think she needs to be able to cite a statute that places this report squarely among the records HOA members are legally entitled to review."

Thanks to Augie & Richard. I'll let you know how this turns out. We have some crazy stuff going on in our HOA so don't know when I'll get a reply.

Yes, a fine 2019 to everyone!
RichardP13
(California)

Posts:3193


12/29/2018 10:32 AM  
Augustin

The formation of a contract can be held executive session and the minutes from that meeting are not available to the homeowners. BUT, once the winning contract has been signed, it is available to the homeowner for inspection. IF, in the case of Kerry, someone could have a attorney give a legal opinion to withhold the report for no good reason. Hell, attorneys will do anything for money. For a report you are willing to be withheld needs to be deemed confidential right from the outset.

Kerry would not need to provide a citation. You would argue whether the report was confidential, from the beginning.

You cited an opinion from the person who handles the davis-stirling.com website. as you know two lawyers can't agree on the same thing. I know a number of lawyers who work at that firm, past and present, and they have different opinion on a wide variety of topics. If a lawyer and a PM had to go into Small Claims who would have a better chance. Now what if a PM and a homeowner went into the same court, who has the better chance. Trust me, it not always what you know in court that makes a case.

My CMCA and AMS mean nothing. Neither does my tax preparer's license, it is the continual education year after year. I attend two legal conferences every year. I also have a number of acquaintances in the HOA legal field which help a lot. I don't come to post on every topic just so I can get my free toaster, I have one already. I post on topics where I have some experience and expertise. This being one of them.

TimB4
(Virginia)

Posts:16092


12/29/2018 11:34 AM  
Posted By RichardP13 on 12/29/2018 10:32 AM

My CMCA and AMS mean nothing.




Richard,

Thank you for that. Rarely have I heard anyone who hold licenses or credentials admit that.

A title, license or degree simply means one was able to retain enough knowledge to pass an exam (written/oral).
It does not mean if one passed the exam by one question or with 100% accuracy.

It's the actual experience and continued training/learning that counts.

I'll put more weight in the advice of someone who has the experience (regardless of degrees) vs. someone who simply has a degree. Alas, I've seen it too often that most will simply believe those who have credentials or simply gives the answer they want to hear.

Case in point. My board wanted to know how taxes worked. I took the time and explained the difference between the 1120-H and the 990 (as well as the State forms). As we know, the 1120-H can result in minimal taxes for most HOAs and the 990 can result in higher taxes. One board asked why wouldn't the taxes be what they learned in school (law school). I again explained that using the 990 requires the inclusion of the deposits to the reserve and the 1120-H excludes the reserve deposits. Another board member thanked me for my "opinion." That person is now the treasurer and has to file the taxes. Hopefully he listened to me (the one with experience) and not the attorney.



AugustinD


Posts:1271


12/29/2018 4:52 PM  
Posted By RichardP13 on 12/29/2018 10:32 AM
The formation of a contract can be held executive session and the minutes from that meeting are not available to the homeowners. BUT, once the winning contract has been signed, it is available to the homeowner for inspection.


Richard, we agree that "executed contracts not otherwise privileged under law" may be reviewed by members, pursuant to Civil Code 5200. But the the report is not a contract. For one thing, it was prepared after the contract was signed.

Is this really the ground on which your position rests? Namely, that the report is either a part of the contract or is "the contract" itself? If so, we majorly disagree.

I am not sure why you ask what my layperson's legal opinion is. I would think one could tell what it is from my prior posts. My layperson's legal opinion is that, until someone cites a statute saying otherwise, the HOA Board appears to be within its legal rights to withhold this report from members.
RichardP13
(California)

Posts:3193


12/29/2018 6:46 PM  
Sorry, you would lose. We had a water engineer's report challenged in court. The court ruled it should be available for a homeowner as it wasn't meant to be confidential. This happened in 2009.
RichardP13
(California)

Posts:3193


12/29/2018 7:38 PM  
Unfortunately, what I get out of all this, is the homeowner asking for such a report must be a troublemaker and they would have to prove that they are entitled to such a report, that, ultimately, they paid for. Did I miss anything?
AugustinD


Posts:1271


12/30/2018 7:28 AM  
Richard, you missed the statutes themselves. Also your water engineer's report lawsuit was not, from all I can tell, appealed. It is not binding precedent.

I answered your questions. Answer mine: Is it your position that the report is either a part of the contract or is "the contract" itself? What is your legal reasoning for your position? Also you said you wanted fact and not opinion. Please state the wording from a cited California statute that puts this report into the category of HOA records that HOA members are legally entitled to review. Finally, do you think citing your bona fides, and not statute, would be convince a small claims court judge that your position is correct? Please tell the OP exactly what she should cite in her future correspondence with the HOA board and, if push comes to shove, in small claims court.

You get the last word. Else I think the thread speaks for itself.
TimB4
(Virginia)

Posts:16092


12/30/2018 8:36 AM  
From what I got on the thread, most believe the report should be made available.
RichardP13
(California)

Posts:3193


12/30/2018 9:10 AM  
Augustin

I am afraid you are the type of person for the reason why my wife or I will ever live in an HOA again. I wouldn't tell someone you can only see something IF you can cite California statue that specifically state you can view a SPECIFIC documents. I look at the intent and I look to see if the document is confidential or was deemed to be hidden from prying eyes from the get go.

Your first mistake was citing something from davis-stirling.com, under "Records Not Subject to Inspection" and came up with correspondence between vendors and board as law, when it is only one person's opinion. Did you bother to read the two statues that posted, §4935 and §5215 and if you did did anything say reports were forbidden from inspection. I actually the statues pretty well, thank you. If in doubt, I actually went to the State Senator who drafted SB563, Open Meeting Act for his interpretation and reasoning for that bill.

I look at intent and read between lines. In Kerry's case, she would know if the reports that grew out of the contracts were ever intended to be deemed confidential and thus not viewable eyes.
AugustinD


Posts:1271


12/30/2018 10:07 AM  
Posted By TimB4 on 12/30/2018 8:36 AM
From what I got on the thread, most believe the report should be made available.


The OP's question was, "do I have the right to inspect the reports that grew out of the contracts" The California statute on this is permissive and not mandatory. That is, the board may share such reports with members, but by my reading, it has the legal right not to. As I wrote above, I do not like the withholding of such reports. I agree that people pay money into their HOA and do have legal ownership rights to certain records and to know the condition of the finances and infrastructure. But depending on the circumstances, and if I were a director, I might vote either to withhold certain reports from members or to redact them heavily. Circumstances meaning the release of such a report might be cause for legal action by, say, a vendor who is criticized in the report. In denying any such report to a member, I would hope that somehow, word would get out that the Board has to be mindful of defaming vendors, members et cetera. Hence the board has to exercise judgment when it comes to records requests.
KerryL1
(California)

Posts:6045


12/30/2018 4:57 PM  
I entirely agree with Augustine's reasoning IN THE case of the board here and MY request, It IS secretive. It does want to obscure facts from owners. Without statutory evidence that this final report is a document I can possess, I would never waste my time pursuing it. I have much larger issues to work on, which I can now do that I'm off the board.

The exterior paining project lasted over a year and cost way, way into 6 figures. The project mgmt. company was hired when we--the then-board--realized it was too much for our PM to handle. There were structural issues, etc. that made it a nightmare. The proj. mgr. charged us well into 5 figures. I did review brief interim reports from them and received replies to my very occasional emails via our PM to them about certain aspects of the painting work. I have no reason to believe the final report would be a problem, but who knows??

Now if it were clear by statute that an owner could possess that type of document as it is about, say, open meeting minutes, I might go to court to try to persuade this board to be more transparent about almost everything. I'd win and maybe my fellow owners would too.
RichardP13
(California)

Posts:3193


12/30/2018 5:03 PM  
IF everything has to be clear cut for everyone, we are in a world of hurt. Actually wouldn't need board members, we could just get robots to nod their shiny tin heads.
RichardP13
(California)

Posts:3193


12/30/2018 5:11 PM  
Posted By KerryL1 on 12/30/2018 4:57 PM
I entirely agree with Augustine's reasoning IN THE case of the board here and MY request, It IS secretive. It does want to obscure facts from owners. Without statutory evidence that this final report is a document I can possess, I would never waste my time pursuing it. I have much larger issues to work on, which I can now do that I'm off the board.

The exterior paining project lasted over a year and cost way, way into 6 figures. The project mgmt. company was hired when we--the then-board--realized it was too much for our PM to handle. There were structural issues, etc. that made it a nightmare. The proj. mgr. charged us well into 5 figures. I did review brief interim reports from them and received replies to my very occasional emails via our PM to them about certain aspects of the painting work. I have no reason to believe the final report would be a problem, but who knows??

Now if it were clear by statute that an owner could possess that type of document as it is about, say, open meeting minutes, I might go to court to try to persuade this board to be more transparent about almost everything. I'd win and maybe my fellow owners would too.



If you were still on the Board, knowing what you know about that report and a homeowner asked to review that report, would you comply?
KerryL1
(California)

Posts:6045


12/30/2018 6:59 PM  
First, Richard, Your remark that boards that comply with statutes, governing documents and board policies & resolutions are shiny robots is snarky.

2nd, If I were on the board, and if such a request come to the board, and if said report said nothing potentially defamatory or raised questions about the quality of the painters' work in it, I would encourage the board to approve releasing it to the owner.

There are many contracts where it's easy for any interested owner to actually see the results. On high rises, the quality of the painting work and the condition of the building caulking on our curtain wall system cannot be seen completely from units or the ground and must be examined from a swing stage or basket by knowledgeable experts.
RichardP13
(California)

Posts:3193


12/30/2018 8:36 PM  
Posted By KerryL1 on 12/30/2018 6:59 PM
First, Richard, Your remark that boards that comply with statutes, governing documents and board policies & resolutions are shiny robots is snarky.


That was the intent.
RichardP13
(California)

Posts:3193


12/30/2018 10:15 PM  
Kerry

I don't think you really understood what Augie was saying. He said that you shouldn't get the report because it is part of a contract done in executive and you wouldn't be able to provide any citation that proves you are entitled to such a highly sensible report.3

I call BS.

I am out of here. Happy New Year!
AugustinD


Posts:1271


12/31/2018 7:15 AM  
Posted By RichardP13 on 12/30/2018 10:15 PM
I don't think you really understood what Augie was saying. He said that you shouldn't get the report because it is part of a contract done in executive and you wouldn't be able to provide any citation that proves you are entitled to such a highly sensible report.


This is not what I wrote.
KerryL1
(California)

Posts:6045


12/31/2018 4:29 PM  
With Augie, I agree that there's nothing in CA statutes that I can see that gives owners the right to examines such reports. Is still a director, I personally would follow my fiduciary duty of loyalty to the corporation, i.e., my HOA by withholding any verbiage that might put my HOA at risk if revealed.

If such language is in the report, I'd also urge the board to vote to seek compensation from the painting vendor --potential litigation-- or cure--a contract specifying what must be repaired. Both of those topics may be discussed in executive session if the board chooses.

IF the report is "clean," I'd vote to release it to the owner.

Keep in mind that for the 12 years I was on the board no such requests were made and it was very rare to have that type of contract in the first place in my HOA. Also keep in mind, I not only want a sense of the condition of our building caulking, I want to know if this report was completed at all, which I can learn from the invoice, which may not be withheld from me. It the report has not be done, I'll urge the PM to get it handled so that I don't have to write an agenda item for the board.

I'll let everyone know how this turns out. I do appreciate both Richard & Augie's arguments. I far prefer Augie's tone.
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