A community association is organized as a nonprofit corporation, and just like any other corporation, it needs to follow the applicable corporate code and the directors and officers that run it have duties to the corporation. This includes keeping records to show that the directors and officers performed those duties, as well as any obligations imposed on the corporation/association by the declaration. The bylaws of the association, just like any other corporation, may also outline specific records that must be maintained.
Those records must be kept to show that the association is doing its job, in compliance with the law, declaration, and the bylaws. Of course, if you are keeping records, it makes sense that those records would be available (at least in part) to the members of the association. Often, there is an affirmative requirement in the bylaws that the records be available (with some limitations) to members, and there are provisions in the Georgia’s nonprofit corporation code that require that certain records be made available for inspection to members upon demand. However, keep in mind that there are records that may not be readily available to members, or to obtain access, the member must state a proper purpose for the inquiry. Finally, members of the public at large certainly do not have access to the association’s records.
But it’s great to tell you that you need to keep “records,” but what the heck are these “records” specifically? Who keeps them, as you are all volunteers, have no office, the secretary moved out of the subdivision, my dog might eat them?How long do we have to keep them, whatever they are?
The association’s board of directors should sit down and decide what needs to be kept, where they will be kept (so that they are accessible), and how long different kinds of records will be kept. It is helpful to turn to someone who has done this before, like an association attorney, to get some guidance on what can work for your association. There are some minimum legal standards that apply and you may want to consider the “what,” “how,” and “how long” questions as it relates to those times where members want to access the records. By the same token, do not throw the full weight of retaining records on your management company, if you have one. At the end of the day the obligation falls on the shoulders of the board of directors and officers, not the managing agent.
If there is a dispute with the management company at some point, it may make it difficult to recover or transfer the records. So, if the management company has been made solely responsible for retaining and maintaining the records, this can cause a problem. In our experience, those problems often occur at the same time as a need for the records arises.
Do not try to create a complex system or keep absolutely everything. As the saying goes “keep it simple…” and divide records into multiple categories. For example: (1) permanent records; (2) medium term (keep for 10 years after the expiration of the item, like a pool maintenance contract); and (3) general (destroy after 7 to 10 years).
Keep your records in a fireproof file cabinet some where you can access it easily. Try to avoid locating records in someone’s home. People move and have other issues that arise and this may make accessing the records difficult when they are needed. Having a copy of the permanent records held by an association manager or your attorney is a good redundancy to have in place. Digitizing records and uploading them to an online drop box or to other cloud storage is also very helpful. If there is a disaster, there is a greater likelihood that those records will survive if you have created a plan to store information in the cloud or by other similar means.
Of course, these are only suggestions, and you can modify them to suit your particular community. We also recommend and can help with drafting a retention plan and putting it in a policy format for the board to adopt. Once adopted, run with it and impose the retention policy for current-year records immediately. Then look back and try to get old records in compliance with the policy. This may be an overwhelming task or it may be just plain scary (especially if there is nothing there to organize). Just work with what you have and chip away at organizing it. All this work will pay off the next time one of your association members wants to look at the records.