Illinois Court Favors Owner in Dispute Over Access to Association Records

Requests to review association records should be taken seriously. In the recent case of Palm v. 2800 Lake Shore Drive Condominium Association, a condominium unit owner in Illinois believed that the board president and the board as a whole were exceeding their authority. The owner asked the association to provide him with records relating to those allegations. The association refused, and the owner responded with a lawsuit. The trial and appellate courts ordered the association to produce the records immediately and to pay the substantial attorney fees incurred by the owner.

Washington law imposes a broad requirement on condominium and homeowners associations to make their records reasonably available to owners and their agents. Homeowners associations also must provide their records to mortgage holders and their agents and avoid releasing the unlisted telephone numbers of owners. If you think that an owner’s request for records goes too far, contact the association’s attorney before refusing to grant it.

Contracts - Review Them, Revise Them, and (Sometimes) Reject Them

Many community associations periodically execute contracts with vendors to obtain essential services. If you are on the board of a condominium or homeowners association, you should resist the temptation to sign contracts without thoroughly reviewing them. Important legal rights are at stake.

The board needs to make sure that the contract accurately describes the agreement. It should be clear how the price will be calculated and what variables will affect it. The contract should specifically describe what goods or services the association is buying and all applicable performance standards.

The contract should also protect the association if something goes wrong during performance. Requiring the vendor to carry insurance that covers the association is one way to do this. Obtaining a release from liability for claims arising out of the work is another. Dispute resolution procedures should be established, and the causes that allow a party to terminate the contract should be described in detail.

Proper review and editing of proposed contracts can help associations get the best value for their money and avoid costly disputes with vendors. The board should attempt to envision how the contract will be performed under a variety of circumstances and the problems that could be encountered along the way. If the board has trouble identifying areas of concern, experienced attorneys and property managers can facilitate this process.

Electronic Media and Association Business

Electronic media like email, Facebook, and Twitter are becoming the primary way for condominium and homeowners association board members to communicate with one another. Board members should be careful when using those types of media to discuss association business. Electronic messages may eventually be considered association records subject to review by the owners.

According to the Washington Condominium Act, association records must be made reasonably available to owners for examination and copying. This law applies to older condominiums as well. According to the Washington Homeowners’ Associations Act, all records of the association, including the names and addresses of owners and other occupants of the lots, must be made available to owners for examination at the office of the association or its manager. Homeowners associations are prohibited from releasing the unlisted telephone number of any owner in response to a request to review association records. Those associations may impose a reasonable charge for copies and costs incurred in providing access to association records.

Washington courts have not yet decided if electronic communications between community association board members about official business are records of the association, and the relevant state statutes are also silent regarding this issue. It is a good practice for board members to assume that electronic messages are potentially subject to review by the owners and strive to communicate about sensitive matters over the phone or in person. This will reduce the odds that a rash message from a board member will come back to haunt the association in future litigation.