– By Laurie F. Masotto, Esq. (originally published in July, 1997)
You receive a letter from a homeowner asking for the following records: “I think we are paying too much for landscaping, I want to see the contract. I also want to look at every check and invoice paid to this vendor for the past 17 years. My neighbor is a dead-beat, and I want to know what he owes in assessments. Also, I want a breakdown of all legal fees spent last year.”
Under California law, a member’s inspection rights are limited. Upon receiving a request, consider the following: First, has the member made a written demand, and stated the purpose for the request, which must be “reasonably related to the person’s interests as a member”? (Corps. Code §8330, 8333,) We suggest you consult with legal counsel as to whether the stated purpose is proper.
Second, does the member have the right to the records? Absent a subpoena, members’ inspection rights are generally limited to: (1) Accounting books and records. (Corps. Code §8333). This has been interpreted as the monthly financial statements and annual audit, and does not include copies of checks, invoices, general ledgers, and ledgers or other documents reflecting individual members’ assessment amounts. Documents showing legal fees (i.e. bills), other than the total sum shown on the financials and audit, are privileged. (2) Minutes of the Board and Committees. (Corps. Code §8333.) This would not include any executive session minutes, if any are taken, as such are confidential. Contracts or other records are not for members’ inspection. (3) List of members’ names and addresses and voting rights. (Corps. Code §8330-8332.) This does not include phone numbers, names of members’ children, or any information other than specified in this section. Unless the Association provides a “reasonable alternative”, a member may inspect and copy such list within 5 days, or the Board may charge the member for a copy within 10 days of the request. Due to privacy reasons and the potential for crimes, the preferred response is to offer an alternative method of achieving the purpose within 10 days of the request, i.e. to mail the material for the member at the member’s expense. If the member rejects the offer, he/she must do so in writing and state the reasons for the rejection.
Third, if the Board believes in good faith and with “substantial basis” that the list will be used for an improper purpose, a protective order may be sought through the Superior Court, no later than 30 days after the demand or rejection, whichever is later. (Corps. Code §8331.) Damages or an injunction (order prohibiting use) may also be sought for misuse of such list.