33-1805. Association financial and other records
Dennis, I know you said that Violations and Fines are not confidential and should be available to all owners and that some financial info, possibly Late Dues, has been seen as confidential. I am a little confused.
I apologize for the additional clarification question here.
Is there any way to clarify what “financial records” and “financial information about an individual member of the association” in #4 means and is there case law that clarifies?
Could it mean their personal banking etc, not the Association Records on that member?
B. Books and records kept by or on behalf of the association and the board may be withheld from disclosure to the extent that the portion withheld relates to any of the following:
4. Personal, health or financial records of an individual member of the association, an individual employee of the association or an individual employee of a contractor for the association, including records of the association directly related to the personal, health or financial information about an individual member of the association, an individual employee of the association or an individual employee of a contractor for the association.
Thank you in advance,
Cindy
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Cindy,
In general, personal information about an individual would include information such as marital status, social security numbers, ethnic heritage, sexual orientation, job status or place of employment, pending or past litigation unrelated to the HOA, email accounts, etc. It does not include actions taken by the association to enforce the governing documents.
Financial information would include bank account numbers, social security numbers, salary, place of employment, pending bankruptcy, or collections activities unrelated to the HOA. There could be legitimate arguments made from both sides of the issue if assessment delinquency or collection activities for other fees or charges should be considered financial information. Therefore, I adopt a conservative approach and assume that the information would be confidential and protected. I still believe that any fines or penalties applied by the association are neither personal nor financial information, and simply a provision of the contract between the members and the association, and thereby disclosable for validation of the consistent application of the contract.
The rub comes from the statute’s use of both the terms “records” and “Information”, that causes confusion. The provisions from this section were meant to reflect the criteria for closed meetings of the board in 33-1804, and in that section, the statute only uses the word “information” and is thereby clear. When the records provision was initially implemented, I believe that use of the two different terms was an escape provision most likely snuck in by either CAI or AACM to give attorneys wiggle room to avoid providing information on the selective enforcement of the governing documents by these communities. My proposed Records Request legislation will eliminate this confusion.
I’m not aware of any case law precedent that directly addresses this question. To establish case law, someone must challenge the association’s interpretation of the law and have that issue appealed to either the state appellate court or the supreme court. If a Superior Court judge rules consistently with this understanding, that ruling must be challenged in the appellate court, and that court upholds it. If no one challenges the interpretation in court, the association can interpret the law any way it wants, whether that interpretation is right or wrong, or whether it would be upheld in court. The only proper way to fix this is to provide better clarity in the law that eliminates the association’s attorney’s ability to interpret the law in a way most favorable to the association.
I’ll do my part to try to get the law clarified, but until then, association boards are always free to do the right thing and act in the best interest of the community members’ right to know and understand the actions of the association.
Tierra Rancho HOA v. Kitchukov implemented the Restatement’s duties of the board to the members, and that includes a provision that stipulates that ” to provide members reasonable access to information about the association, the common property, and the financial affairs of the association. ” While this statement is general, it is also very broad and all-inclusive.
Dennis
FWIW,
In a very recent OAH Case No. 25F-H011-REL, the Petitioner requested copies of violation notices sent to members — even offering to allow the HOA to REDACT them. Later, during pre-hearing discovery, a subpoena was issued for the same documents.
The HOA (Tonto Forest Estates, managed by Ogden and acting under the so-called “advice” of legal counsel) withheld the records ENTIRELY, claiming they were “privileged” because they included a member’s name, a photo of a plant, and concerned enforcement actions. Notably, those plants were VISIBLE to anyone WORDWIDE through Maricopa County’s publicly available, high-resolution aerial imagery.
According to the Final Decision:
“Mr. Jolivette [Board President] testified that the Board withheld the documents after advice from its attorney as it was a part of the ongoing litigation.”
Judge Stone and the tribunal rejected that claim, finding:
“The tribunal finds that Respondent wrongfully withheld the [violation] notices requested, as THEY WERE NOT PRIVILEGED IN ANY WAY.”
During the hearing, Judge Stone directly challenged the board’s position, noting that the violation notices were not written by an attorney, were not on attorney letterhead, bore no attorney signature, and contained no language indicating they were confidential or privileged.
The Respondent did not appeal within the deadline, so the ruling is final.
This recent OAH ruling aligns with Dennis’s position: VIOLATION NOTICES ARE NOT CONFIDENTIAL (“in any way”, according to recent OAH ruling) and must be disclosed upon request.
Thanks Fish7,
This should remind everyone that “upon the Advice of counsel” does not carry any weight when it comes to violating the law. Attorneys will tell boards anything they want to hear but until attorneys are referred to the Bar for disciplinary action for providing advice that directly contradict Statutory Law this will never stop. Violation enforcement is a fundamental duty of the contractual obligations of the Declaration and as such are a record of the association and subject to records request. Th truth of the matter, how the association enforces the declaration is of vital interest of the members of the association to ensure that the association is treating all members fairly, which is also a duty of the board. All violations, related correspondences, fines and penalties are a direct and integral function of the association and as such, an association record subject to records request. They are in no way, personal, confidential, or financial records of the individual.
We cannot trust that ALJ’s will get this right every time, so I must make this abundantly clear in statute. Which I will do.
Dennis
Fish 7 – can you provide an actual link to this case no. OAH Case No. 25F-H011-REL, I am not able to find it anywhere. Appreciate your help!
https://portal.azoah.com/searchable/1312646.docx