William-Douglas

Sunshine Laws – HOA Board Openness

Frequently the term Sunshine Law wrongly comes up with regard to the operation of an HOA. Sunshine laws are federal statutes and some states have similarly named statutes that require governmental meetings to be open to the public whenever possible. The federal sunshine laws are part of the Freedom of Information Act, which has the objective of making the government more transparent and open to public review.

 

The fundamental tenet of the Freedom of Information Act are derived from The Federalist papers Number 49: “the people are the only legitimate fountain of power.” Similarly, as with any elected body, the HOA board of directors represents the membership and is accountable to the membership.

 

While the specific sunshine statutes and the Freedom of Information Act only apply to government bodies, HOAs have their own “sunshine” type of requirements; either dictated by their governing documents or state statutes. Whatever the requirements of the HOA’s governing documents or state statutes, a board of directors should always strive to make reasonable accommodations to dissemination information and meet with members.

 

Generally speaking, the governing documents will usually address HOA meeting requirements quite thoroughly. However, it is not uncommon for an HOA’s governing documents to not address record retention and dissemination in great detail. If this is the case, the states non-profit corporation statutes are the fallback, HOAs being non-profit corporations.

 

State statutes will generally be very specific with what non-profit corporation are required to do with membership communications and record keeping. The membership’s rights to review HOA records commonly arises and in most cases if not addressed in the governing documents is found in the state statutes. This particular type of statute will generally mandate what records members are entitled to and the process for obtaining those records. Hopefully there will be aspects of these document request statutes that make complying with the requests reasonable. Such as a member cannot demand records of the HOA without doing so in good faith and paying for the procurement expense.

It goes without saying it is almost always best to be as open as possible when dealing with the membership; the exception being matters dealing with litigation or potential litigation. A board of directors having this type of policy generally the worse thing an HOA member can say is: “I do not like what the board did in this matter, but they answered my questions and gave me everything I asked for.”