Requests for Records
Hey Dennis,
We’ve talked about this before. In March of this year a couple of people made a records request for the entire year of 2022. They wanted 2 days to examine the records with THEIR CPA. Because the board wanted to prove to these two women that we’re doing nothing wrong, we complied. Our records are impeccably kept and it took them 3 hours to go through.
Now, we have another request from the same to wanting to see the first 6 months of this year. Following it their request:
I am requesting to see any/all of the financial records for Velda Rose Estates from January 2023 thru June 2023. This request includes every invoice, charge account statements with receipts, checks register and checking account statements, savings account statements, etc. We would expect the information you provide to be in the same format as it was last time. I do not want copies but would like to review the originals in person. It would be beneficial for the treasurer to be available to answer any questions. You can have other board members present if you so choose. Colby clubhouse would be my suggested location. It worked well the last time. The date we would like to have this happen is Wednesday, September 20, 2023. This will give you the full 10 days to get the information together. We could start at 9am. We don’t anticipate it taking more than 2-3 hrs.
These two are former board members, one of whom resigned when we dumped the management company and the other was removed by a vote of the community.
I consider this request to be unreasonable, burdensome, abusive and a fishing expedition. I don’t see any reason why we should comply and I fully intend to deny their request. I’m also reasonably sure they’ll either file a complaint with AZDRE or get their lawyer involved (Dessaules).
Financials are published every month the newsletter is published and it’s published every month with the exception of June thru August.
Any advice?
Thanks,
Dave
About Post Author
1 Response
Leave a Reply
You must be logged in to post a comment.
Dave,
While I’ve always been an advocate for homeowners right to reasonable records request, this is clearly excessive. While they may have engaged Jonathan as their attorney I would bet that he would inform them that this request is unreasonable. Without any credible reason requiring such a detailed review of all association transactions there is no way that any judge would not see this as nothing but an unreasonable and overly burdensome request and fishing expedition. The financial responsibility to manage the association is the board’s and while any reasonable request to view any specific transaction is the right of any homeowner, they have no right to conduct financial audits on their own without justification. The HOA industry has already attempted legislation last session to restrict the access of association records for homeowners and we were fortunate to be able to kill that legislation. I fully expect the industry to try again this coming session based on unreasonable request like these. These people have a vendetta and are abusing their right to access and in doing so risking everyone’s right to access of association records. I’ve never questioned Jonathan’s advice to any of his clients but if he goes along with this request than he and his client will lose before the ALJ. While they may have better success if they choose to pursue this matter in Superior court, there is still sufficient court precedent that your attorney can use to clearly establish that this request is unreasonable and overly burdensome. If they pursue that venue, then you would be able to request the award of your legal fees when you prevail.
All of this is based on the premise that there was in fact no past experience that warrants a detailed scrutiny and review of all financial transactions of the association, based on malfeasance by the association or its agents. If there is than all bets are off and the request for detailed review would be warranted. I true forensic audit would take days by a trained CPA in forensic accounting. A few hours to review all detailed records of the association would be nothing but superficial and simply a power move to abuse their right. There is no way that a trained forensic accountant would be able to review all association records in a few hours, especially when they reviewed a years’ worth of records in 3 hours. This was a superficial exercise to make you jump through hoops for their entertainment pleasure. Call their bluff.
Dennis