Saturday, October 13, 2012

Association board required to allow homeowners to review documents

Failure by a board to produce association documents requested by a homeowner in a timely manner is an unreasonable withholding, subjecting it to damages.

By Donie Vanitzian, reprinted with permission
October 14, 2012

QUESTION: I'm tired of being ripped off and getting the royal runaround from my board when I try to get the status of my account or other information that the board is obligated by law to provide. When I start talking tough I'm told to talk to the board's attorney, who in turn tells me I'm not his client so "go away, you're bothering me." Or worse, I find a $150 to $300 charge for legal fees on my account because the attorney answered my request. I think this is outrageous blackmail or extortion by a corrupt board that fails miserably in its duty of good faith, backed by the attorney who goes along with it. Does this qualify as "collusion" and "unjust enrichment" by the attorney?

ANSWER: Blackmail and extortion are criminal offenses that would require a police report and a complaint at your local district attorney's office for prosecution. Only a trial court would be able to decide what qualifies as "collusion" and "unjust enrichment" by the association's attorney.
As an owner, you have a right to demand documents, whether or not the association's attorney responds to your request. Any answer other than the date on which the documents will be produced is evidence of an unreasonable withholding, subjecting the association to damages.

California Civil Code section 1365.2 gives titleholders the right to review and copy association documents. It requires that a written request be addressed to the board president, sent certified mail, return receipt requested, with copies also sent by regular mail to the other board directors. Do not send a copy to the association's attorney unless you have also been directed to do so in writing by the attorney.
Demand to review the documents contained in California Civil Code section 1365.2(b) within the time frames listed in that section. You should be prepared to pay copy costs, the amount of which the association must inform you about in advance. If the board does not comply by the deadlines in the code section, file an action in Small Claims Court asking for an order to produce the records, for $500 for the association's noncompliance and for the costs of filing the Small Claims Court action. An association that consistently refuses such demands, which can be made by every titleholder, creates a costly situation for all owners if lawsuits are filed.
The attorney is correct in that you are not his client, even though your association dues may be used to pay his salary. Courts have affirmed that issue. Had your own attorney contacted him, he would not be sending you or your attorney a bill. Because you have no attorney-client relationship with the association's attorney, he is not obligated to give you any advice and, therefore, cannot charge you any fees. He may try to charge the association, but it is up to the board to reject the charge because, as he points out, you are not his client.
The attorney's invoice to the board falls under the cost of doing business as an association and should be satisfied through accounts payable from the association's operating fund.
The board could include a notice with its yearly distribution of required documents, informing owners that questions for the association's attorney need to go through the board.

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