Reasons to go Paperless. Many associations have been slow to embrace the digital age and still cling to paper files. Paper files take up valuable physical space, create a fire hazard, make it difficult to find records, can be stolen, and can be destroyed by floods, fires, and varmints. Storing them digitally eliminates all of these problems. It also provides greater security against loss since the cloud has built-in redundancy.
Electronic Records Allowed. The Corporations Code specifically allows all corporate records to be kept in non-paper form.
[M]inutes and other books and records shall be kept...in any other form capable of being converted into clearly legible tangible form... When minutes and other books and records are kept in a form capable of being converted into clearly legible paper form...[they] shall be...accepted...to the same extent as an original paper record. (Corp. Code § 8320(b).)
Records Policy. Associations should review their paper records and retain only those that satisfy a records retention policy adopted by the board. Some records must be kept permanently, while others can be disposed of. When eliminating paper records, they should be destroyed, preferably by shredding. Simply throwing them into the trash can result in potential liability if confidential records end up in the wrong hands.
Digitizing Records. Retained records can be digitized and stored in the cloud. For scanning, boards should use a service that uses optical character recognition (OCR) software that automatically transforms documents into searchable text. Doing so makes it easier to find what you need with a few keystrokes. Make sure you ask for this feature since many scanners simply convert documents into images that cannot be searched.
Scanning Services. A scanning service many law firms use is called First Legal. They have the capacity to handle high-volume requests. In addition, they provide both onsite and offsite digitizing of documents, including blueprints. They also have the ability to store records in the cloud and make them available to authorized users. Another service is Konica Minolta. The company offers a cloud infrastructure, digitizing records, and information technology (IT) services. For scanning blueprints, boards can also use local blueprint shops. There are many other scanning options available that can be easily located on the internet or recommended to you by an IT consultant.
Storage. For smaller self-managed associations, files can be stored using Microsoft 365’s “family” subscription, with access for up to 6 persons (board members who can log in and manage data). The Microsoft suite of apps, plus six terabytes of OneDrive storage, is available for a low monthly fee. With storage in OneDrive, boards can provide members with a link to entire folders of documents or to single files upon request without those members needing subscriptions of their own.
Recommendation: There are many IT consultants who can assist boards in digitizing and storing records.
ASSISTANCE: Associations needing legal assistance can contact us. To stay current with issues affecting community associations, subscribe to the Davis-Stirling Newsletter.