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Subject: Records Disclosure
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TammyC3
(New Mexico)

Posts:82


05/06/2020 11:32 AM  
Hello all,

Association records have been returned to New Mexico from an out-of-state 'office'.

Our BoD is trying to work their way through the obligations for 'record disclosure'.

Article 8 - 53-8-27. Books and records:

"All books and records of a corporation may be inspected by any member, or his agent or attorney, for any proper purpose at any reasonable time."

HOA ACT - SB 150 - SECTION 2 - 47-16-5 RECORD DISCLOSURE TO MEMBERS--UPDATED INFORMATION.--

A. "All financial and other records of the association shall be made available during regular business hours for examination by a lot owner within ten business days of a written request."

B. "The association shall not charge a fee for making financial and other records available for review. The association may charge a fee of not more than ten cents ($.10) per page for copies."

C. As used in this section, "financial and other records" includes (paraphrased to reduce content):
1) The Declaration
2) Designated Agent name, address, phone
3) Bylaws
4) All Association Members – names and addresses
5) Minutes of all meetings for previous 5 years
6) Operating budget for current fiscal year
7) Current assessments, including both regular &
special assessments
8) Financial statements & accts, bank acct statements, transaction registers, services &/or utility records
9) Financial audit/review, if any
10) Association’s current contracts
11) Current insurance policies
12) any electronic record of action taken by the board.

Our association's records = two cardboard file boxes. The boxes are located in the Resident Agent's personal home office.

It doesn't seem that the statutes requires the Registered Agent to hand both boxes to a Member and allow them to sift through the contents.

Could the intent of the above statutes mandate the 'purpose' be stated by the member, so that the requested documents can be secured by the Registered Agent (from the box), and only those documents put on a desk for the Member to review?

Our BoD understands that much of the information is public information, i.e. property owners name/address & Community Docs, etc. But, bank statements and check book transaction records? Is there a 'line' between physical 'examination, inspection, review' and 'copying'?

What are normal and customary practices when disclosing records to Members?

If your association has a website, are there documents that are not made available online?

Thank you for your time,
Tammy
The only way out, is through.
SheliaH
(Indiana)

Posts:3224


05/06/2020 2:23 PM  
Did you read your documents to see what they say about homeowner rights and responsibilities? There may be something about access to records, so start there. Generally, homeowners don't have a right to see records related to another member or privileged information (e.g., communications between the board and association attorney). Mostly everything else could be fair game.

You don't say if you're on the board, but if you are (actually, even if you aren't), your board needs to have far more control over the documents. I don't know why there are only two boxes of documents and you don't say how old your community is or if it's ever been self-managed - this looks and sounds like it was self-managed, which may explain why the registered agent has the documents in his/her home office.

You had better pray someone didn't toss away something important because it "didn't look important" or "wasn't important anymore". You won't like the outcome if you find you need that document one day and nothing's there. Judges don't look kindly on that and neither will your master insurance carrier. In fact, that may result in you begging them not to drop you - if they decide to keep you, your premiums wilL increase.

Before you start talking about what should or shouldn't go online, you and the board need to have a sit down with your association attorney and master insurance carrier about setting up a document retention system - it can include things like what the homeowners can and can't have, how to request it, photocopying charges and all that.
AugustinD


Posts:3364


05/06/2020 2:30 PM  
Posted By TammyC3 on 05/06/2020 11:32 AM
What are normal and customary practices when disclosing records to Members?
Seriously: Deny, delay, and force the HOA member to hire an attorney to get records to which she or he is lawfully entitled. It is highly effective at ensuring the HOA is opaque.

Lawful and reasonable practices are to require that the member not make a sweeping request. The member must indicate specific records she or he desires to see.

The HOA must ensure that the HOA member cannot steal records. Where possible, offer copies, instead of inspection of originals, at a reasonable cost.

I think the best HOAs put their governing documents on their web sites. It saves the manager a lot of trouble.
JohnC46
(South Carolina)

Posts:9461


05/06/2020 6:05 PM  
Posted By AugustinD on 05/06/2020 2:30 PM
Posted By TammyC3 on 05/06/2020 11:32 AM
What are normal and customary practices when disclosing records to Members?
Seriously: Deny, delay, and force the HOA member to hire an attorney to get records to which she or he is lawfully entitled. It is highly effective at ensuring the HOA is opaque.

Lawful and reasonable practices are to require that the member not make a sweeping request. The member must indicate specific records she or he desires to see.

The HOA must ensure that the HOA member cannot steal records. Where possible, offer copies, instead of inspection of originals, at a reasonable cost.

I think the best HOAs put their governing documents on their web sites. It saves the manager a lot of trouble.




I agree.
MelissaP1
(Alabama)

Posts:9306


05/06/2020 6:41 PM  
What exact records are you looking for and requesting? How far do you want them to go back? Do you have an issue with paying for copies? Do you have an issue of an arranged time to VIEW the records with the option of making your own copies?

There are some records that may only exist in the mind than reality. There are some records that are already available outside of the HOA like CC&R's and Articles of Incorporation. Those are PUBLIC documents.

So what is your scope and reason for the records? Why can't you go to a meeting?

Former HOA President
SheilaJ1
(South Carolina)

Posts:164


05/06/2020 7:16 PM  
Pretty much everything is fair game, bank statements and even delinquent owners. Most reasons for inspections include to make sure the HOA is fulfilling its obligations, ensure good financial standing, the best reason is to "its for my education" that's all they need to say.

You can put all the obstacles you want, the member will get copies one way or another. We make electronic copies excluding personal information and attorney communication, we have them ready for any member that requests them. Never been an issue.
GeorgeS21
(Florida)

Posts:2681


05/06/2020 8:44 PM  
In my rental neighborhood, I scanned every non-recorded document known and available and posted on our website where every owner had access.

I also posted every recorded document to the open side of the website.

This did not include case filings, like liens and foreclosures.

Everything was easy after that ... no complaints, and any request for docs was quickly satisfied.
TammyC3
(New Mexico)

Posts:82


05/18/2020 2:58 PM  
Augustin ..
Your advice to deny and delay was practiced by the previous board of directors. The treasurer wouldn't even supply bank statements for board meetings!! (Now we know why!)

The current board had to hire an attorney. We finally got the records back (from out of state no less)!!

We are now taking aim at compliance, but shrink at the thought of being beholden to angry ex-directors who request we send them monthly bank statements &/or weekly copies of checkbook registers. Oh the irony!

Taking your (better) advice:
No sweeping requests, specific records should be indicated.
**We interpret the requests must be indicated 'in writing'.

Ensure records aren't stolen & offer copies.
**We interpret that copies can be made upon request AFTER a document has been inspected.

Put governing docs on website. -- (We did that!)

**Re: List of Members. We interpret that this would also need a written request and a personal visit. Is it standard practice to mail/email the List of Members to any Member who requests it?

Please set me straight if I've strayed from normal & customary practices.
Always appreciate your insight.... and most of your humor.

Tammy

TammyC3
(New Mexico)

Posts:82


05/18/2020 3:47 PM  
Hi Melissa,

Thanks for your response. I still feel very new to the board, and am not quite comfortable leading with "I'm on the board". Apologies for confusion.

Our association's records were held out-of-state for a decade. Members had no ability to examine or review them! The long time treasurer (now removed) refused to supply bank statements for board meetings. (Now we know why!)

The new board (w/attorney help) has possession of (all?)the records. The Registered Agent and Principal Office have been changed to be complaint and perjury to the NM Secretary of State is no longer an annual event!

As a director/officer I'm trying to weed through compliance requirements. We view it as you stated:
We will allow a review *for 5 years back, we will charge $ .10 for copies, and we think you are spot on: VIEW records w/option to copy. We interpret a requirement to "view" in person.

We aren't trying to be difficult, but want to avoid any abuse by ex directors requesting we send them copies of bank statements each month or copies of the checkbook register each week.

Your response seems to indicate you interpret an 'in person' visit is required to "view" records and copies can be made.

Please correct me if I've misinterpreted.

Sincere appreciation,
Tammy




AugustinD


Posts:3364


05/18/2020 4:17 PM  
Posted By TammyC3 on 05/18/2020 2:58 PM
We are now taking aim at compliance, but shrink at the thought of being beholden to angry ex-directors who request we send them monthly bank statements &/or weekly copies of checkbook registers.
Are any ex-directors doing this? Has your board reviewed the section on records disclosure in the NM HOA Act? It sound like it has. For the archives, here's a copy:
http://www.nmprc.state.nm.us/consumer-relations/docs/Homeowner%20Association%20Act.pdf

If these ex-directors want a copy of financial records, then the NM HOA Act allows the HOA to charge for the copy. To me this includes the labor of any manager who sends out the email with the copy.

Posted By TammyC3 on 05/18/2020 2:58 PM
**We interpret the requests must be indicated 'in writing'.
I agree. The HOA should keep a record of who requested what. Just stuff the written request in the member's file. For now, I think I would require the request be in writing, on hard copy and not by email.

Posted By TammyC3 on 05/18/2020 2:58 PM
**We interpret that copies can be made upon request AFTER a document has been inspected.
I disagree. In my opinion, corporations should be more cooperative than this. Transparency to shareholder-members is of the utmost importance.

Posted By TammyC3 on 05/18/2020 2:58 PM
**Re: List of Members. We interpret that this would also need a written request and a personal visit. Is it standard practice to mail/email the List of Members to any Member who requests it?
I would do whatever is easiest on the manager.

The NM HOA Act does not require disclosure of addresses of members. However, the NM Nonprofit Corporation Act states that addresses must be made available for inspection as follows:

NMSA 53-8-27
"... Each corporation shall keep at its registered office or principal office in New Mexico a record of the names and addresses of its members entitled to vote. All books and records of a corporation may be inspected by any member, or his agent or attorney, for any proper purpose at any reasonable time."
TammyC3
(New Mexico)

Posts:82


05/18/2020 4:24 PM  
George,

Love, love, love : "no complaints, and requests for docs quickly satisfied".

Our inexpensive 'u-build-it' website doesn't offer an 'open' side and a password protected side. (It's on our wish list.)
Our annual budget is $6000.00. We are relegated to keeping things as simple as the "income" portion of our budget reflects!

Current goal: 'open' website for (public) docs, calendar/notices, communication, newsletters, etc., while saving the expense of postage, ink, paper & travel. (15 miles of bad road one way to P.O. and if it rains, you aren't going anywhere!)

Wondering:
Do you scan bank statements to website each month?
Do you scan board & annual meeting minutes to the website?

Hoping you'll see my future topic: Filing liens

This forum is a tremendous help.
Gratitude for reply.
Tammy
TammyC3
(New Mexico)

Posts:82


05/18/2020 5:33 PM  
Epic failure in my attempt to use "Quote".
Moving on...

**Yes, ex-directors, developer and 'gang' tried to bury us with nonsense. They also sent their assessment payments registered letter requiring a signature and therefore, a 30 mile round trip to the P.O.
Note - 2019 NM Senate Bill 150: https://www.nmlegis.gov/Sessions/19%20Regular/bills/senate/SB0150.pdf

All directors are volunteers. Could the association place a monetary amount on a volunteer's time? Noting NMSB 150 further limits 'copying' charges (see below).

**Hard copy of request - perfect solution!

**Transparency to Members - Gosh, therein lies the rub. How to be transparent without being abused. I think requiring a 'hard copy' request will be helpful in this regard.

** NM SB 150 Section 2
B. The association shall not charge a fee for making financial and other records available for review. The association may charge a [reasonable] fee of not more than ten cents ($.10) per page for copies.
(Noting "reasonable" was struck from paragraph and "not more than" was added.)
C. As used in this section, "financial and other records" includes:
(1) the declaration of the association;
(2) the name, address and telephone number of the association's designated agent;
(3) the bylaws of the association;
(4) the names and addresses of all association members;

Does NM SB 150 change requirement for access & copying of the 'List of Members'?

Thank you



AugustinD


Posts:3364


05/18/2020 6:23 PM  
Posted By TammyC3 on 05/18/2020 5:33 PM
Note - 2019 NM Senate Bill 150: https://www.nmlegis.gov/Sessions/19%20Regular/bills/senate/SB0150.pdf
Thank you for the correction regarding 2019 changes to the NM HOA Act. My earlier link is wrong. Here's the version from which I am working now: https://www.nmlegis.gov/Sessions/19%20Regular/final/SB0150.pdf . I double checked the latest version of the HOA statute at https://laws.nmonesource.com/. See 47-16-1 et seq. at the latter site. I see the statute requires the request to be in writing.

Posted By TammyC3 on 05/18/2020 5:33 PM
All directors are volunteers. Could the association place a monetary amount on a volunteer's time?
As I think you may have saw, it appears the only charge the NM HOA statute allows is ten cents a page for copies.

Posted By TammyC3 on 05/18/2020 5:33 PM
Does NM SB 150 change requirement for access & copying of the 'List of Members'?
The current version of the NM HOA Act now states that both names and addresses of HOA members are part of HOA records that must be made available to HOA members.

I remember a former director at one of my HOAs who was 'making trouble' with records requests years ago. E.g. she would not be specific about what record she wanted. The board did not know any better. In this instance, I suggest just giving the ex-directors what they want, but requiring them to comply with the law. I see the HOA has ten days to provide the records. Just follow the law. Hopefully the ex-directors will tire of this.
GeorgeS21
(Florida)

Posts:2681


05/19/2020 8:49 AM  
Our inexpensive 'u-build-it' website doesn't offer an 'open' side and a password protected side. (It's on our wish list.)
- We used a company that charges $25 a month - open and members only sides ... very, very easy to manage

Wondering:
Do you scan bank statements to website each month?
- No to bank statements, but we do post the financials, as presented, from each Board and Annual Meeting. Treasurer provides via a scan in pdf. I keep trying to get screen snap, instead, but either works. Treasurer could also provide as a pdf directly.

Do you scan board & annual meeting minutes to the website?
- Minutes are put together in .docx and shared with Board members as a pdf prior to each Board meeting. Once approved, they are posted to the website as a pdf (NEVER as a .docx as you don't want anyone making changes ... a clever person can still make changes to a pdf, but it is a lot harder and leaves tracks)
TammyC3
(New Mexico)

Posts:82


05/20/2020 5:26 AM  
Bank statements - If review is requested by out of state Member:

Large file emails are a hardship on all volunteer directors who live in the (frontier) subdivision, due to the limits on data with the available internet service providers. I made it 17 days before I was limited to a crawl, our Secretary faces the same issue, and we haven't sent one blast email, or large file.

- - Would it be normal/customary/acceptable to have a policy that requires we copy (and charge)to accommodate request and send via USPS mail?


AugustinD


Posts:3364


05/20/2020 7:46 AM  
Posted By TammyC3 on 05/20/2020 5:26 AM
Bank statements - If review is requested by out of state Member: Large file emails are a hardship on all volunteer directors who live in the (frontier) subdivision, due to the limits on data with the available internet service providers. I made it 17 days before I was limited to a crawl, our Secretary faces the same issue, and we haven't sent one blast email, or large file.
- - Would it be normal/customary/acceptable to have a policy that requires we copy (and charge)to accommodate request and send via USPS mail?


-- By my reading, the most the NM HOA can charge is ten cents per page. The HOA would have to absorb the cost of mailing.

-- Else as long as the HOA mails the copy(ies) within ten business days, I think the HOA would be in compliance with the statute.

-- I suggest the board prepare a short statement explaining why it cannot offer inspection and instead, is providing copies.

-- If anyone complains about the ten cent per page charge, I think the HOA is stuck with eating this. This is because the statute requires the HOA to make docs available for inspection at no charge.

-- The HOA wants to show it is being fair and reasonable. If the HOA members are clearly trying to burden you volunteers, consider informing them that the HOA will respond to one request per member per every two weeks.

-- "In writing" to me means a hard copy, signed letter. Email requests are not acceptable.
MarkW18


Posts:1067


05/20/2020 11:23 AM  
The ten cent per copy is for inspection when someone makes an appointment during normal business hours. You could charge the out of stater ten cents per copy and have them pick it up, or ten cents per copy and mail it with postage absorbed by the out of stater.
LanceG1
(Georgia)

Posts:85


05/20/2020 7:59 PM  
Full disclosure and transparency within the confines of the CCR's and law. Reasonable fee re-imbursement for the HOA for copies also make sense. When you can't share something, explain why you can't to the owner. Also, the laws vary from state to state. I'm a big proponent of transparency, but once on the board realized that there were certain things I wanted to see as a homeowner that I couldn't because of legal reasons etc. so I try to be transparent to people asking about that about why I can't share it.
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