Condo talk: Board must keep specific records and allow members access

We hear a lot about demands for “transparency” in government. Public access to records and files has become a mandatory obligation of units of government (subject to certain limited exceptions) under the Freedom of Information Act, or FOIA.

However, what are the rights of a unit owner in a condominium or homeowners association as to access to the books and records of the association?

Pursuant to Section 19 of the Illinois Condominium Property Act, Section 107.75 of the Illinois General Not For Profit Corporation Act, and Section 1-30 of the Common Interest Community Association Act, each association shall keep correct and complete books and records of account and shall also keep minutes of the proceedings of its members, board of directors and shall keep at its registered office or principal office a record giving the names and addresses of its members entitled to vote. All books and records of a corporation may be inspected by any member, or his agent or attorney, for any proper purpose at any reasonable time.

The Illinois Condominium Property Act also addresses condominiums, homeowner associations and master associations so as to compel the board to maintain the following records:

Ÿ The association’s declaration, bylaws, and plats of survey, and all amendments of these;

Ÿ The rules and regulations of the association, if any;

Ÿ If the association is incorporated as a corporation, the articles of incorporation of the association and all amendments to the articles of incorporation;

Ÿ Minutes of all meetings of the association and its board of managers for the immediately preceding 7 years;

Ÿ All current policies of insurance of the association;

Ÿ All contracts, leases and other agreements then in effect to which the association is a party or under which the association or the unit owners have obligations or liabilities;

Ÿ A current listing of the names, addresses and weighted vote of all members entitled to vote;

Ÿ Ballots and proxies related to ballots for all matters voted on by the members of the association during the immediately preceding 12 months, including but not limited to the election of members of the board of managers; and

Ÿ The books and records of account for the association’s current and 10 immediately preceding fiscal years, including but not limited to itemized and detailed records of all receipts and expenditures.

Thus, a duty is imposed upon an association to provide accessibility to association records. This is, in effect, a twofold obligation, as the board of directors is ultimately responsible for reasonable access to the books and records as well as being vicariously liable for its manager or agent hired for the purpose of maintaining them.

Failure to comply with a timely written request could subject an association to suit and the payment of an unhappy owner’s legal fees.

However, despite the appearance of uncontrolled accessibility, the association can still impose certain reasonable restrictions to maintain control of the situation. Initially, the law imposes a similar if not far greater duty upon public bodies for citizen access to public records. This right is guaranteed by federal and state statute, as well as the Constitution of the state of Illinois. However, even public bodies are permitted to impose certain restrictions on accessibility. Under Illinois law, a written request for records must be responded to within 30 days. The owner requesting records must state a “proper purpose” and the board is permitted to charge the cost of copies and the actual costs of returning and mailing records available. However, the city of Chicago had a three-day window and a recent Appellate Court decision held that the ordinance supersedes state statute on this point.

For the purpose of establishing a uniform and open policy in order to comply with the intent of the applicable statutes, I would recommend that boards consider the following for on-site inspections:

Ÿ A notice of intent to inspect must be submitted in writing to the board of directors or its duly authorized agent at least 48 hours before the planned inspection, or if copies are requested, such request shall be in writing, stating specifically what is being sought.

Ÿ A proper purpose must be stated.

Ÿ All records to be inspected are located at the registered office of the association and available between the hours of 9 a.m. and 5 p.m., Monday through Friday.

Ÿ At the discretion of the board of directors, or its agent, certain records may only be inspected in the presence of a board member of employee of agent.

Ÿ The person(s) requesting access shall not disrupt the ordinary business activities of the registered office or its employees during the course of inspection.

Ÿ No actual records may be removed from the office without the express written consent of the board of directors.

Ÿ When applicable, all costs of inspection shall be borne by the person requesting access. In the event the person reviewing the records is desirous of making photocopies, all costs of copies will be incurred by the person requesting same.

Ÿ Consistent with an individual’s right to privacy and applicable law, the following records will not be made available without the express written consent of the board of directors:

A. Minutes of administrative hearings pertaining to the imposition of fines, late fees or other punitive disposition.

B. Where disclosure would violate a constitutional or statutory provision or applicable public policy.

C. Where disclosure could result in a discernible harm to the association or any of its members.

D. Personnel records.

E. Interoffice memorandums.

F. Contractors’ competitive bids.

G. Litigation files.

H. Preliminary data, information or investigations which have not been formally approved by the board of directors.

I. Where disclosure may result in an invasions of personal privacy, breach of confidence or privileged information.

J. Where disclosure would unreasonably interfere with or disrupt the operation of the association.

K. Where access results in a private harm or damage that outweighs the right to access.

L. Documents related to another owner’s delinquent account.

M. Documents related to sale or lease of a unit.

Ÿ The association is under no obligation for any additional information other than that required by law.

By adopting a policy of these or similar guidelines, the association can operate with as little disruption as possible. In addition, professional management companies hired by the board will have the express authority to limit such reviews to properly submitted requests.

Though the board has a legal obligation to permit unimpaired access to statutorily mandated records, it should cooperate fully in order to limit its exposure for arbitrary, capricious or reckless conduct. In turn, the unit owner will be provided with all of the necessary data for the accomplishment of his purpose in making the request. It is only when an association does not have a consistent and evenhanded policy that a bitter conflict or litigation can result.

Ÿ Jordan Shifrin is an attorney with Kovitz Shifrin Nesbit in Buffalo Grove. Send questions for the column to him at jshifrin@ksnlaw.com. This column is not a substitute for consultation with legal counsel. Past columns can be read at www.ksnlaw.com.