Right to Inspect HOA Records
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RIGHT TO INSPECT RECORDS

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Right to Inspect Records


Members can inspect and copy the association's books and records. The Davis-Stirling Act defines records as the "association's" records, not the members' records. (Civ. Code § 5200) Members may inspect the association's records, but with limitations. Except for meeting minutes that are permanently available, associations need only produce records for the current fiscal year and two previous fiscal years. (Civ. Code § 5210(a)) Older records may be disposed of in accordance with a duly adopted records disposal policy.

Written Request & Proper Purpose. Requests to inspect records must be in writing and sufficiently detailed to avoid confusion about what the association is being asked to provide. Members cannot make a sweeping request for every record the association has produced over the past ten years. A member's request to inspect records must be for a proper purpose reasonably related to his or her interests as a member of the association. (Civ. Code § 5230, Corp. Code § 8330, Corp. Code § 8333) Associations can bring actions for injunctive relief and damages against persons who violate this section (Civ. Code § 5230):

(1) The association records, and any information from them, may not be sold, used for a commercial purpose, or used for any other purpose not reasonably related to a member's interest as a member. An association may bring an action against any person who violates this section for injunctive relief and for actual damages to the association caused by the violation.

(2) This section may not be construed to limit the right of an association to damages for misuse of information obtained from the association records pursuant to this section or to limit the right of an association to injunctive relief to stop the misuse of this information.
(3) An association shall be entitled to recover reasonable costs and expenses, including reasonable attorney's fees, in a successful action to enforce its rights under this section.

Inspection Location. Records must be made available at the association's onsite business office or, if there is none, at a mutually agreed-upon location. If the parties cannot agree on a location, or the member requests copies of specifically identified records, the association may copy the documents and mail them to the member. (Civ. Code § 5205(c)) Records remain under the association's custody and control during the inspection process. Members do not have the right to remove, alter, or destroy corporate records.

Right to Designate Agent. Members may designate another person, agent, or attorney to inspect records. The member shall make the designation in writing. (Civ. Code § 5205(b), Corp. Code § 8311)

Bylaw Limitations. Inspection rights cannot be limited by contract, the association's articles of incorporation, or bylaws. (Corp. Code § 8313)

Requesting Information Instead of Records


Sometimes, owners mix requests for information with requests for records. The Davis-Stirling Act provides an owner's right to inspect the books and records, but does not impose an obligation on associations to compile information. For example, if an owner requests a list of all parking violations for the past three years, the association is not required to comb through its files to compile one. If a list already exists, the association could produce it (minus any personal information in the document). However, it is not required to do so, as the list is not among the statutorily authorized "books and records" that associations must produce. 

Records Subject to Review


While some records are not subject to review, most can be inspected and copied by members. (Civ. Code § 5200(a)) Following is a list of records subject to membership review:

Records Not Subject to Review


The following records are not subject to inspection by members (see Civ. Code § 4935 and § 5215):

Timeline for Production


Associations must produce records within the following time frames:

Meeting Minutes. All minutes of board and member meetings (other than executive sessions) shall be made available to members within 30 days of the meeting and distributed upon request. (Civ. Code § 4950) All minutes of previous membership and board meetings (other than executive sessions) must be produced within 30 days following the association's receipt of the request. (Civ. Code § 5210(b)(4)) Minutes of committees with decision-making authority for meetings commencing on or after January 1, 2007, within 15 calendar days following approval. (Civ. Code § 5210(b)(5))

Financial Records & Governing Documents: Any record or statement available under Civil Code § 5300 (budget, reserves, lien policies, insurance, financial statement, etc.) or Civil Code § 4525 (governing documents, assessments, violations, construction defects, etc.), within the following time frames:

  • Current Fiscal Year: Records for the current fiscal year within 10 business days of receipt of the request (Civ. Code § 5210(b)(1));
     
  • Prior Fiscal Years: Records for the previous two fiscal years, within 30 calendar days of receipt of the request (Civ. Code § 5210(b)(2));

Membership List: Within the time frame specified in Corporations Code § 8330, i.e., 5 business days. (Civ. Code § 5210(b)(6))

Reasonable Deadlines for Production of Records


The deadlines described above are subject to reasonableness. There may be mitigating factors that could delay the production of records. If an owner demands all financial records for the current year and the two prior years, it may take longer for the association to review the records, redact personal information, and make copies. As long as the delay is reasonable, the requesting party should not file an action in court seeking penalties. As provided in Civil Code § 5235, courts do not automatically impose fines; they apply a reasonableness standard. 

Charging Copy Costs & Fees for Records


Associations can charge direct and actual costs of copying and mailing records required to be provided pursuant to Civil Code § 5200. (Civ. Code § 5205(f))  However, they cannot charge a fee that exceeds the amount necessary to defray the expenses for which it is levied. (Civ. Code § 5600)

Escrow Documents. Associations may collect a reasonable fee from the seller based upon the association’s actual cost for the procurement, preparation, reproduction, and delivery of the documents requested pursuant to Civil Code § 4530. An additional fee shall not be charged for electronic delivery of the requested documents instead of hard-copy delivery. (Civ. Code § 4530(b)(1))

Management Costs. If the copying is done by the association's management company, the fees charged by the company for pulling records from storage and copying them can be passed on to the requesting party. This would apply to electronic records as well as paper records. Expenses incurred by the company searching for records and burning them to a disc can be passed on to the requesting party. The statute prevents associations from charging extra fees, not managing agents. The court addressed the issue in Berryman v. Merit Management and commented that competitive forces, not the statute, will constrain a vendor's fees and charges. (Berryman v. Merit Management; Fowler v. M&C Mgmt) Associations must inform the member requesting records of the cost before copying the requested documents. (Civ. Code § 5205(f), (g))

Electronic Records. Members who request records can receive them electronically if the records can be transmitted in a redacted format that prevents alteration. (Civ. Code § 5205(h))

Format of Files. Compliance with the statute can best be accomplished by burning the files to be produced to a non-rewritable CD or DVD. Although the file, regardless of format, could still be copied and the copy manipulated, the files burned to the disk could not, thus preserving the integrity of the production. Emailing a .pdf or another editable format may not fully comply with the statute because the resulting file could be manipulated. Unsecured .pdf files and files in other formats can be edited by legitimate, commonly available software. Even secured .pdf files can have their security removed by unscrupulous websites. However, a court could find that a good-faith attempt at compliance could be satisfied by transmitting either a password-protected secure .pdf or an image file of the document, such as a .tif file, converted from a .pdf.

Reasonable Fee. The association may charge a reasonable fee for this service based on its actual costs of procuring, redacting, preparing, and reproducing the requested items. (Civ. Code § 4530(b))

Limitation on Costs. For items provided electronically, the cost of duplication is limited to the direct cost of producing a copy of a record in the electronic format. The cost of duplication shall be limited to the direct cost of producing a copy of a record in that electronic format. (Civ. Code § 5205(h))

Redacting Sensitive Information


An association may charge an amount not exceeding $10 per hour, and not exceeding $200 total per written request, for the time actually and reasonably involved in redacting an "enhanced association record." (Civ. Code § 5205(g)) To "redact" is to blacken or strike through language in a document so it cannot be read. Associations may withhold or redact information from association records for any of the following reasons. (See Civil Code § 5215 for details)

  • The release of the information is reasonably likely to:
    • lead to identity theft
    • lead to fraud
    • compromise the privacy of an individual member
  • The information is privileged under the law. Examples include:
    • documents subject to the attorney-client privilege
    • documents relating to litigation in which the association is or may become involved
    • confidential settlement agreements
    • invoices from the association's legal counsel
  • The information contains any of the following:
    • records of goods or services provided a la carte to individual members of the association for which the association received monetary consideration other than assessments
    • records of disciplinary actions, collection activities, or payment plans of members other than the member requesting the records
    • any person’s personal identification information, including, without limitation, social security number, tax identification number, driver’s license number, credit card account numbers, bank account number, and bank routing number
    • minutes and other information from executive sessions of the board as described in Civil Code § 4900 et seq., except for executed contracts not otherwise privileged. Privileged contracts shall not include contracts for maintenance, management, or legal services
    • personnel records (NOTE:  if an "association record" contains compensation information for individual employees, then when the association makes that "association record" available to a member to inspect, the association must show the employee compensation information by "job classification or title, not by the employee's name, social security number, or other personal information."  (Civ. Code § 5215(b))  See "Employee Salaries"
    • interior architectural plans, including security features, for individual homes

Explanation. If the member who requested access to an association record that was withheld or redacted pursuant to Civil Code § 5215 so requests, the association must provide a written explanation specifying the legal basis for withholding or redacting the requested records. (Civ. Code § 5215(d))

Liability Limited. No association, officer, director, employee, agent, or volunteer of an association shall be liable for damages to a member of the association or any third party as the result of identity theft or other breach of privacy because of the failure to withhold or redact that member's information under Civil Code § 5215 unless the failure to withhold or redact the information was intentional, willful, or negligent. (Civ. Code § 5215(c))

Small Claims Enforcement Rights


Members may bring an action in small claims court to enforce their right to inspect and copy the association's records. Requesting ADR is not required before going into small claims court. If the court finds that the association unreasonably withheld records, it may assess a penalty of up to $500 for each separate written request and order the production of records. (Civ. Code § 5235) If owners bring a small-claims action that the court finds frivolous, unreasonable, or without foundation, the court may award costs to the association. (Civ. Code § 5235)

Non-Davis-Stirling Associations


For deed-restricted associations that do not fall under the Davis-Stirling Act, inspection rights can be found in Corporations Code § 1601 and § 8333. Corporations Code § 1610(a) only requires that the accounting books and records and minutes of proceedings of the shareholders and the board and committees of the board of any domestic corporation be open to inspection at any reasonable time during business hours. Section 1601, subdivision (a), requires only that the identified records be open to inspection at any reasonable time during the usual business hours. The statute does not specify where the records shall be made open to inspection. It's implied that they may be inspected at the office where the records are kept. (Innes v. Diablo Controls, Inc. (2016) 248 Cal.App.4th 139, 143)

Control of Records, Deadlines, and Costs


The right to inspect and request copies of records does not give a homeowner or board member the right to take possession of original records. All records should remain in the custody and control of the association's managing agent unless otherwise authorized by the board. As with member requests for records, the association should meet statutory deadlines for producing records for board members' inspection. For small, routine requests for copies of records, board members should not be charged copy costs since they are volunteering their time and reviewing them is part of their duties. However, for large or unusual requests, such as a director's request for a copy of all records for the past two years, the board may require the director to pay the copying costs. When a director abuses his position on the board to demand excessive or repeated copying of records, the director should bear the cost of the burden he imposes on the association.

ASSISTANCE: Associations needing legal assistance can contact us. To stay current with community association issues, subscribe to the Davis-Stirling Newsletter.

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