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Home Owner Rights to Inspect Financial Information
#9372 - 08/05/06 12:23 PM
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Does anyone know the WA state regulations for a homeowners right to request detail information reguarding financial statements provided by boards of directors of a HOA? I am an accountant and want to be able to review the detail of the financials prepared by our non-financial staffed board.
Thanks for any input
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You should know this as an accuntant already. The financial statements and all records are legally allowed to be viewed by any homeowner. However, there may be restrictions to giving notice of request so you can get the information. They may even add a charge for copies as well if need be.
Have you even talked to a board member? Are you managed by a Management company? They should turn over those documents upon request and proof of homeownership.
That brings me to my next point. You can ONLY have access to the financial records IF you are an OWNER. IF you have NOT purchased a home yet in a HOA, then you are NOT qualified to be considered a "Member" and therefore can NOT access this information. ONLY members are allowed access to this information. A "Catch-22".
Send a letter or call your management company/board. That should get you in the right direction BEFORE calling out every law reference in the book to get it. A simple question will do in most cases!
--------------------
Lance Tome
Victim of Dictatorship HOA
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Kathy
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AHRC User
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Reged: 07/28/03
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Posts: 837
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Loc: California
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Here's the law:
RCW 64.38.045
Financial and other records — Property of association — Copies — Examination — Annual financial statement — Accounts.
(1) The association or its managing agent shall keep financial and other records sufficiently detailed to enable the association to fully declare to each owner the true statement of its financial status. All financial and other records of the association, including but not limited to checks, bank records, and invoices, in whatever form they are kept, are the property of the association. Each association managing agent shall turn over all original books and records to the association immediately upon termination of the management relationship with the association, or upon such other demand as is made by the board of directors. An association managing agent is entitled to keep copies of association records. All records which the managing agent has turned over to the association shall be made reasonably available for the examination and copying by the managing agent.
(2) All records of the association, including the names and addresses of owners and other occupants of the lots, shall be available for examination by all owners, holders of mortgages on the lots, and their respective authorized agents on reasonable advance notice during normal working hours at the offices of the association or its managing agent. The association shall not release the unlisted telephone number of any owner. The association may impose and collect a reasonable charge for copies and any reasonable costs incurred by the association in providing access to records.
(3) At least annually, the association shall prepare, or cause to be prepared, a financial statement of the association. The financial statements of associations with annual assessments of fifty thousand dollars or more shall be audited at least annually by an independent certified public accountant, but the audit may be waived if sixty-seven percent of the votes cast by owners, in person or by proxy, at a meeting of the association at which a quorum is present, vote each year to waive the audit.
(4) The funds of the association shall be kept in accounts in the name of the association and shall not be commingled with the funds of any other association, nor with the funds of any manager of the association or any other person responsible for the custody of such funds.
You can find HOA laws for Washington state at:
http://apps.leg.wa.gov/RCW/default.aspx?cite=64.38
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Depends, as usuall...
Are you Incorporated? Do you have the articles of Incorporation. My condo is a non-profit so that falls under the non profit corporation act 24.03
"24.03.135
Required documents in the form of a record — Inspection — Copying.
Each corporation shall keep at its registered office, its principal office in this state, or at its secretary's office if in this state, the following documents in the form of a record:
(1) Current articles and bylaws;
(2) A list of members, including names, addresses, and classes of membership, if any;
(3) Correct and adequate statements of accounts and finances;
(4) A list of officers' and directors' names and addresses;
(5) Minutes of the proceedings of the members, if any, the board, and any minutes which may be maintained by committees of the board.
The corporate records shall be open at any reasonable time to inspection by any member of more than three months standing or a representative of more than five percent of the membership.
Cost of inspecting or copying shall be borne by such member except for costs for copies of articles or bylaws. Any such member must have a purpose for inspection reasonably related to membership interests. Use or sale of members' lists by such member if obtained by inspection is prohibited.
The superior court of the corporation's or such member's residence may order inspection and may appoint independent inspectors. Such member shall pay inspection costs unless the court orders otherwise.
[2004 c 265 § 14; 1986 c 240 § 24; 1967 c 235 § 28.]"
If you aren't incorporated, then I suggest you look at your CC&R's and see if the issue is addressed.
Always try to get your neighbors involved. If you want to review the info, then try to get someone to go with you.
Be sure you get the Chart of Accounts and the check register (I'm sure you know all this).
Good luck. My Prop Mgr put me off for three weeks and in the meantime ran to the Board and told them so the Board behind closed doors said any copies would be a cost of $125. I wasn't told until after I request copies. After ten days I sent an email and said where are my copies. Then I was told. If I had known that, I would have made the copies myself and paid the .10 per copy that the Prop Mgmt Co charges my condo board.
Good luck
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Are they Incorporated?
http://apps.leg.wa.gov/RCW/default.aspx?cite=24.03
RCW 24.03.135
Required documents in the form of a record — Inspection — Copying.
..."The corporate records shall be open at any reasonable time to inspection by any member of more than three months standing or a representative of more than five percent of the membership.
Cost of inspecting or copying shall be borne by such member except for costs for copies of articles or bylaws. Any such member must have a purpose for inspection reasonably related to membership interests. Use or sale of members' lists by such member if obtained by inspection is prohibited...."
If you are not incorporated (non-profit) then look at your Declaration and pray the issue is addressed.
Expect some games: I was put off three weeks to review our financials. In the meantime the "property manager" went back to the Board and the "Board" authorized charging $125 for the "time" of the property manager to "find" and "copy." This "decision" was made off-site at a BoD ONLY mtg. I wasn't informed of this until a month later after I request copies.
My response: If I would have known (there were reasons why I wasn't told) then I would have put the document in the machine and made the copy myself and paid the .10 cents a copy that the "property management" company gets paid for making copies for the BoD.
Good luck.
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My HOA and HOA's Attorney have been stringing me along for 5 days and 5 requests to scan and distribute the HOA records to the whole community. I know I can get a Court Order for the records, but does anyone know how I can bill a BOD personally for time and costs of my lawyer instead of my innocent neighbors that pay HOA dues and unknowingly subsidize BODs that act like fascists? Can I argue a motion to have a BOD acting in bad failth to to face the consequences of their actions? I'm trying to be altruistic to my neighbors as I know that the BOD actions are not their fault. I feel like I'm backed into a corner and ready to fight my way out, but need to make sure I don't devour the innocent in my conquest to secure respect for an individuals property rights.
Edited by Erik Campbell (11/05/06 01:52 AM)
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Erik, I understand what your trying to do, but have you checked with your Lawyer about the liability you may incur if the information you give out is used improperly by one of your neighbors? ie. sold
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Anyone that is a Lot Owner may request to review or receive copies of all documents in the possession of the HOA. Would I be subjected to liability by distributing HOA documents that a neighbor takes and sells the information? Can one be held liable for reporting truth or serve as a conduit for HOA information? Seems a radical stretch, but I shall be asking my counsel in any event. What case scenarios are you thinking of where one could argue I caused damages? Thank you. FYI: I finally got a response 2 days ago from the HOA attorney requesting me to phone him to set a time and date to view and scan records. Good Lord, the BOD grossly neglects the law and I receive anything but a helping hand from anyone.
Edited by Erik Campbell (11/09/06 04:29 AM)
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I'm not sure of the dynamics of your community, but likely it is like ours a mixture of owners and renters. I'm new to our community but was told of an incident were someone sold the owners list to a local realtor (right outside the community), who used it to solicit business. This casued quite an uproar with many residents who value privacy.
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Kathy
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AHRC User
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Reged: 07/28/03
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Posts: 837
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Loc: California
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I wouldn't copy and share records with the other homeowners. You are the one the association agreed to give the records to and that may be a legal binding point all by itself. I'm not an attorney but since the records are considered private corportion records which have been entrusted to you, they aren't meant to be shared with others. Knowing another homeowner doesn't mean they won't do some illegal with them. I wouldn't put myself in that position.
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