Q: I sent a copy of a letter that was addressed to my board of directors. There was a list of documents I requested that included copies of two board meetings where a $1,200 one-time assessment and a 5 percent increase in dues was passed by the homeowners. In my request, I asked to see a signed list of voting members present showing a quorum and an 80 percent approval.
I also requested copies of the 2006 and 2007 budgets and board meeting minutes, copies of the 2006 and 2007 profit and loss statements, list of all bids and approvals of the new public area furnishings and contracted work to the property, such as the pool and changes to the common area.
I requested copies of 2006 and 2007 internal and external audits, state and federal filings, bank records showing cash flow policies and bank statements for accounts held by the association ending March 31, 2008.
The letter requested copies of the board minutes that recorded the association’s decision to reduce the common area, giving one-third of the space to private access.
I also requested copies of deposits of $17,000 and $50,000 received from the neighboring property, legal actions, plans for these funds and who has spending rights.
I informed the board members that if I do not receive these documents within 10 working days, I will contact my legal counsel to file a class action suit against the association board of directors.
A: You are under the impression that the association needed a quorum and an 80 percent approval in passing the one-time assessment of $1,200 and the 5 percent increase in dues.
According to state law, NRS 116.31151 subsection 3, unless at a meeting a majority of all owners, or any larger percentage specified in the covenants, reject the budget, the proposed budget is ratified, whether or not a quorum is present.
As to your first set of requests, the association board needs to send you a copy of the minutes of the meetings where the motions were made and the budgets were ratified. You also are entitled to copies of the 2006 and 2007 budgets as well as the profit and loss statements for the two years.
In requesting copies of bids and approvals of the new public area furnishings and contracted work to the property, it would be helpful to the board if you were more specific. Nevertheless, the board should provide this information.
As to the audits, the association may not have been required to produce an audit but to produce a financial review. If that is the case, the board should explain the reason why a financial review was produced as opposed to an audit.
An internal audit is prepared by the employees of the association as opposed to an external audit prepared by an independent auditor, such as a certified public accountant. In most associations, there would only be an external audit on the association’s finances.
As to your request for copies of the state and federal filings, there only would be federal filings of the tax returns. If the association has employees, then there would also be filings with the state for their employees.
It is not clear if you want just 2006 to 2008 bank statements, or if you want records that precede the 2006 fiscal year. They would not identify which expenses were for private charges or reimbursements. You would need to review a check register for the two-year period to identify these types of expenditures.
Apparently, there was some kind of settlement that the association received from the neighboring property. You should be able to obtain copies of these deposits as well as an answer from the board as to the plans for these funds.
As for your request for the minutes that record the homeowners’ approval of how the funds should be allocated and the approval of reducing their common area, 10 days isn’t enough time.
NRS 116.31177, subsection 2 allows the association 14 days after receiving the written request to produce this information. The association is allowed to charge 25 cents per page and $10 per hour towards the labor cost in procuring these records.
The board should send a letter to you acknowledging your request. It should tell you how much this information will cost and require you to submit the estimated funds to the association in advance of the work it will have to perform in order to retrieve the information, some of which could be in archives, and to copy the information.
The association should inform you if your request for the information can be completed within 14 days.
An alternative that could save time and money is for the association to provide the information for the reader to review during normal business hours of the association or management company.
That way, you could then be more selective in what needs to be copied, as opposed to mass photocopying of records that may not be relevant.
Barbara Holland, certified property manager, broker and supervisory certified association manager, is president and owner of H&L Realty and Management Co. Questions may be sent to Association Q. & A., P.O. Box 7440, Las Vegas, NV 89125. Her fax number is 385-3759. Questions may be shortened and are subject to editing.