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August 26, 2005
KEEPER OF RECORDS - BEWARE!
Have you heard about AB 1098 yet? If not, go to www.sen.ca.gov and check it out under legislative bills. It is quite burdensome for boards of directors and managers. California legislators do not seem to like or trust HOA boards and managers. From anecdotal complaints flow onerous, expensive, complicated, technical and punishing laws. Of course, there are the horror stories .....
HOA owners do deserve to have access to some of the association financial records. After all, its often their life's biggest investment. But take a look at the proposed bill. The question is should all HOA owners pay the price for the fishing expedition of one overly zestful and curious owner who may want to see years of detailed records (preferring to micromanage the board from a seat across the table in the boardroom)??? Perhaps it seems I am being unfair and a little facetious - but I expect I have seen many more obnoxious cases where owners harass boards and managers beyond their patience levels and make unreasonable demands than any legislator has seen owners who have tried (using civilized reasonable methods of request) to get records (that should reasonably be available).
Anyway, AB 1098 at first required Associations to provide 6 years worth of detailed financial records, within 10 days, for review by any owner requesting them, at no cost. Industry groups including ECHO, CACM, and CAI-CLAC went up in arms. Hey - let's be reasonable here - that is more onerous than the IRS! It appears the requirements may be mutated to a more palatable 3 years of detailed financial records, allowing for redaction to prevent identity theft (since payroll records, bank records, checks, credit card statements, invoices etc. etc. etc. will probably be up for grabs), because of the hammering (or should I say - respectful commentary) of the 3 groups, but only tomorrow (actually Monday or Tuesday next week) will tell.
Stay tuned, and my best advice is (for all HOAs and management companies) to "get thee paperless" at the earliest opportunity, because otherwise costs of production of records and stress, inconvenience, and more crap will come flying your way once this bill is signed and kicks in (and yes, it will probably happen, no matter how loud anyone screams for a veto). You will probably have at least (or depending on whether you look at the glass half full or half empty) only 6-9 months to get there, so start today.
And remember - this is California only for now, but viruses can spread!!
Posted by Beth Grimm at August 26, 2005 9:44 PM