Is Your HOA Properly Retaining and Storing its Records?
Every homeowners association needs to have established procedures to ensure the safe storage and retrieval of HOA records and documents. Those procedures start with the establishment of a secure location for the association’s headquarters and maintenance of records. The developers of larger projects typically plan for and construct a suitable office for the conducting of the association’s business but smaller associations that don’t have extensive common area facilities frequently lack any office space or a secure place to store the association’s records. It is common in smaller developments, especially those that do not have professional management, to randomly store the association’s records and important documents in portable boxes that are passed from one set of officers to another and occasionally lost, damaged, or destroyed in the process. Some associations may allow each director or officer to retain the records for their respective areas of responsibility, resulting in association records being spread out over multiple locations. Older records may be found (or lost) in various attics, basements and garages.
While not all HOA documents need to be readily accessible, it is necessary for all homeowners associations to maintain their important documents and the records in an organized manner and in a safe location. It is always more desirable to have an established on-site location that is easy for all appropriate personnel to access. If possible, a secure, locked room or closet should be established for the protection and maintenance of the association’s records. The records should be stored in appropriately labeled files that are organized in filing cabinets instead of portable boxes. In situations where there is not sufficient storage space on-site, the association should have an easily accessible off-site storage facility. Records that must be permanently retained and those records that are accessed infrequently are most suitable for off-site storage. Multiple personnel that are authorized to access the association’s records should be aware of the location and have appropriate keys, codes, and other information that is necessary in order to access the records in the storage facility. Regardless of whether the location for storage of the association’s records is on-site or off-site, the designated location should be resistant to rain, floods, fire and other hazards such as snakes, rats, and other rodents.
Separate and apart from the storage of original documents, many records can and should also be maintained electronically on computers. If the association does not maintain its own computers and equipment where the records can be safely stored, secure third-party electronic storage sites are available. Because accessibility to electronically stored documents can be compromised by deteriorated or obsolete equipment or software, back-up copies of computer stored records should also be maintained.
Because the safekeeping of some records is more important than others, associations need to be familiar with the appropriate retention periods for records and any applicable laws pertaining to the periods for which certain types of records must be maintained. These retention requirements can range from a very short or no retention period to a requirement for permanent retention. Information on the appropriate holding periods can generally be obtained from the association’s attorney, or accountant, or a professional HOA property manager.
Properly organizing and storing an association’s records is critical to the operations of the association. Like any other business, there is an ongoing need to access records, but with homeowners associations the importance is compounded by the fact that there are frequent changes in the people that are utilizing the records. Establishing a designated, well organized depository for the association’s records may take an investment of time and effort, but the return on that investment will be well worth it.
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