One of the biggest political buzzwords of the past 10 years or so is 'transparency.' Transparency in meetings of elected bodies in local and state governments, transparency in the proceedings of both public and private organizations, such as civic groups and churches. The feeling is that the public is entitled to a certain level of disclosure about the inner workings and decision-making processes in an array of organizations.
Inevitably, many people would like to apply the same concept to meetings of co-ops, condos or HOAs. In these cases, the property being managed represents the biggest single investment of the residents who call it home. A lack of open communication can result in these residents’ distrust of the board – but if too much information is divulged, it could violate the privacy of individual residents, or jeopardize important financial negotiations or legal proceedings.
The Legal Angle
Above all, boards and managers must adhere to the letter of the law when it comes to the administrative records they must keep, and how those records may (or may not) be made available to people who ask to examine them. New Jersey has several pieces of legislation governing condominium and homeowners associations and the rights of owners to access the board’s records.
Foremost among these is the New Jersey Condominium Act (enforced by the New Jersey Department of Community Affairs, acting through the Bureau of Homeowners Protection), which stipulates that boards of directors “shall be responsible for the maintenance of accounting records, in accordance with generally accepted accounting principles (GAAP),” which “shall be open to inspection at reasonable times by unit owners. Such records shall include a record of all receipts and expenditures and an account for each unit setting forth any shares of common expenses or other charges due.”
Board members are required to issue annual financial audits produced by independent auditors, not by the Condominium Act, but by the Non-Profit Corporation Act, which also says, according to attorney William S. Singer of the law firm of Singer & Fedun, LLC, based in Belle Mead, “members have the right to see books and records and are able to copy them. Most associations have developed their own resolutions about them—what charges they would make for copies and how much notice has to be given.”