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Subject: Just exactly are "Accounting Records" in regards to a request for records?
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LenniaM
(Idaho)

Posts:4


05/20/2021 12:39 PM  
Hi everyone, I have really enjoyed reading many, many posts on the topic of records reviews but still need clarity on which records are to be shared. In Idaho we have very little state guidance and what we do have is not clear. I'm fairly new at HOA operations and we have a board member who is trying to sue us for, ...well we are not sure because he is just mad but cannot articulate what he actually sees as the problem more than to say he is concerned. He presented us with a laundry list of hundreds of items falling into 28 bullet points. Most were not to do with financial operations. Our State of Idaho says we are to provide "accounting records and the membership list, if the owner provides intentions and purpose." And then the board gets to determine if said purpose is proper.

We had already given him copies of both budgets (we have 12 timeshare units with 450 owners, and 8 wholly owned resident units) showing the timeshare budget, and the common area budget, as well as the calculation of dues for both, a very detailed P & L with categorized vendor names, dates and amounts of checks for the whole year, and since he is on our board, we allowed him a 4 hour board meeting when he was able to ask for fine detail on every category and expense, all income streams, and anything else he could think to ask about (we ended only when he was satisfied). Having already done all that, we are stumped as to what more he wants, and what more we are obligated to provide. We are new management following a corrupt one so we don't have anything more to show him yet further back than one year.

We know he is disgruntled and feel worried over his request for the membership list and he did not suggest ANY purpose to us, proper or not... nothing. So we declined the membership list request for lack of a proper purpose. He's hired a lawyer to threaten us, pledged to sue us at every meeting for the past 6 months, calls us incompetent on a regular basis, yells at everyone so we no longer can take his phone calls... but we have nothing to hide and are operating very ethically, so we suggested he file his suit. Yet, he still persists to request access to everything in our office and many items we don't have. He even asked for all board members' phone logs, texts and emails. Ha! His request letters read like a lawyer's discovery list and as soon as we think we have satisfied him, he sends a new request.

My question is what am I obligated to show him? Our codes say only the term "accounting records." What types of records should this include? And please use names of the reports as I am not an accountant, but our manager is, and it would be great to provide a list.

Thanks!
BarbaraT1
(Texas)

Posts:589


05/20/2021 12:54 PM  
Anything you routinely generate in the course of accounting.

Your state statutes may or may not allow you to include delinquent accounts, you'll have to research Idaho laws for that.





JohnC46
(South Carolina)

Posts:11665


05/20/2021 1:07 PM  
Lennia

He has you running scared. Give him copies of everything you have. Bombard him with paperwork/info. Delinquency reports cannot name the person who is delinquent but they can show how much is delinquent.

Stop fearing his threats of legal action. Next time he does it stop being scared and reply: See you in court.
JohnC46
(South Carolina)

Posts:11665


05/20/2021 1:15 PM  
Posted By JohnC46 on 05/20/2021 1:07 PM
Lennia

He has you running scared. Give him copies of everything you have. Bombard him with paperwork/info. Delinquency reports cannot name the person who is delinquent but they can show how much is delinquent.

Stop fearing his threats of legal action. Next time he does it stop being scared and reply: See you in court.



ADD ON

When I say give him everything, I mean public records like Financial Info and Meeting Minutes that he is entitled to. Ignore requests for other things such as Emails, etc. If his lawyer sends anything to the BOD, stop all communication with this person and turn the issue over to the your association's lawyer.
LenniaM
(Idaho)

Posts:4


05/20/2021 3:22 PM  
We have received two letters from his attorney on the topic of the records request. I could easily tell that his lawyer had not seen the original request by this owner as his letter was generic and not matching up with the owner's demands, nor did it threaten to sue. It's just a scare tactic. And he doesn't scare me, they would sue if they had a case, but they don't.

Here's the thing... our State code is written with ambiguity as to the the words used. I contacted three different attorney's for their opinions and they all feel we already satisfied the obligation. I'm the newby president so my last letter back to this owner stated that I had researched this issue and contacted 3 attorneys and in my opinion based on such, I have fulfilled his request. He is of the opinion that the ambiguous term means ALL possible records in any office, financially based or not. So... Who's OPINION of the term "Accounting records" is correct? Frankly, we have given him everything we have already outside of bank statements showing people's bank information and we do not have permission from our owners to share that.

I am hoping that other's on this discussion board have faced the curse of these ambiguous terms and knows what is acceptable practice and commonly supplied to a normal owner who is not intending to sue. Most states have more descriptions of what to consider to supply to owners. I know I need to comply and have done so for him, but I want to establish a normal reaction as a policy to move forward with. We will have more requests for accounting records so what are accounting records, ...exactly?

Lennia
MelissaP1
(Alabama)

Posts:10590


05/20/2021 3:36 PM  
Give the documents over upon request that are required. The reason of the request is irrelevant and needs to stop being read into. The law/rule says a member can review the HOA records. It may cost money for actual copies. Determine what falls into the required documents legally allowed to view and produce them.

CC&R's and Articles of Incorporation are PUBLIC records. They are typically NOT the responsibility of the HOA to provide. In many states it is the seller who is responsible for providing them. Otherwise the member is responsible for getting a copy from the records department of that county/state. The HOA can provide them as a "courtesy" but it is not a requirement.

Stop preparing and responding for a "witch hunt". If your HOA is doing it's job, then the proof is in the pudding they say. Even if it isn't, it should be questioned and held accountable. This is part of being in a HOA is about.

Remember the HOA's money is ALL member's money. The board is just ELECTED to represent and spend that money on the general membership's behalf. I compare it to this. It's like leaving your checkbook on the dining room table for your whole family to view. You may write the checks to pay the bills. It doesn't mean the "family" does not have the right to look at the checks...

Former HOA President
AugustinD


Posts:1920


05/20/2021 3:56 PM  
-- What do your condo's governing documents (Bylaws, most likely) say about record inspections by members and directors? Please quote this exactly.

-- I looked at the records inspection section of Idaho's Nonprofit Corporation Act. See https://legislature.idaho.gov/statutesrules/idstat/Title30/T30CH30/SECT30-30-1102/
-- Idaho's Condo Act is silent regarding records.

-- I do not consider "accounting records" to be ambiguous. The only item that I think should also be provided is the monthly balance sheets, showing assets and liabilities, with particular emphasis on how much is in the condo's reserve account(s).

-- The Nonprofit Corporation Act requires that the member describe "with reasonable particularity the purpose and the records the member desires to inspect;" I would argue that the member-director has not described the records "with reasonable particularity."

-- My general opinion about directors and record inspections: He is a director and should be allowed to see everything any other director gets to see without jumping through hoops. The guy has to vote on important condo decisions and would be failing in his fiduciary duty if he needs to see a record and is denied it.

-- You all should be working from exactly what records the Nonprofit corporation Act and your gov docs specify when you deny this guy records. E.g. his request for emails should be met with "not required under the nonprofit corp. act or the bylaws."

-- Your board thinks he's being sloppy. But I am also not so sure your Board has its act together.
LenniaM
(Idaho)

Posts:4


05/20/2021 3:57 PM  
"Give the documents over upon request that are required. "

Okay... what are those?
AugustinD


Posts:1920


05/20/2021 3:58 PM  
Posted By MelissaP1 on 05/20/2021 3:36 PM
The reason of the request is irrelevant and needs to stop being read into.
This is grossly incorrect. Idaho and many other states statutes' require that members provide a "proper purpose" and do give a board discretion (which must be exercised reasonably) when the purpose does not appear to be proper.
LenniaM
(Idaho)

Posts:4


05/20/2021 4:31 PM  
I've got no problem in showing him records, as we have already gone way over what is required with the 4 hour meeting and his scrutiny into every line item. Part of my effort here was to gather everyone's advice on which records should be included. You are the only one that gave me a suggestion of adding the "monthly balance sheets, showing assets and liabilities, with particular emphasis on how much is in the condo's reserve account(s)." I plan to take your advice and thank you for answering my questions.

We do have our act together, but we do not have any history or legacy behind us. The previous board and manager did not keep anything for records, no good minutes to help guide us, no ledger or balance sheets, nothing to go on. Our new manager built our foundation off of only the bank statements and entering each one into Quickbooks, just to begin managing after the last manager retired and took everything with him to cover up his dual books. This board is the first board to even see a financial record. We now confer with attorney's, accountants, and several other resources to make sure this board and manager do things correctly and ethically.

My concerns today will help me establish a package ready for any owners so that I can fill the request quickly. This one guy is tough on us, but he is also forcing us to learn our jobs and take them seriously... no resentment here, instead I am doing my best to embrace the task.

Thank you for your suggestions,
Lennia
AugustinD


Posts:1920


05/20/2021 5:04 PM  
Posted By LenniaM on 05/20/2021 4:31 PM

We do have our act together, but we do not have any history or legacy behind us. The previous board and manager did not keep anything for records, no good minutes to help guide us, no ledger or balance sheets, nothing to go on. Our new manager built our foundation off of only the bank statements and entering each one into Quickbooks, just to begin managing after the last manager retired and took everything with him to cover up his dual books. This board is the first board to even see a financial record. We now confer with attorney's, accountants, and several other resources to make sure this board and manager do things correctly and ethically.
Thank you for explaining.


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Forums > Homeowner Association > HOA Discussions > Just exactly are "Accounting Records" in regards to a request for records?



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