Every common interest community is a business and every business is required to address record retention. Board members consistently ask: what documents do we need to keep on file and for how long?
State statutes typically address procedures related to books and records. In Washington State, both nonprofit corporation AND common interest community (CIC) statues require a combination of document retention, disclosure and/or inspection. Notably, WA CIC statutes prior to WUCIOA (effective as of July 2018) do not contain detailed lists of records to retain.
Retain ALL the records that are reasonable to keep for future reference (not just the records listed by statute). Not sure what to include? View this example records policy and read Practical Advice Responding to Owners' Records Requests to learn more about establishing a records policy. Records you should keep and records you should disclose are not the same (legally or in terms of best practice). Don't make the mistake of conflating what you must do at a minimum to not break the law with what you should do at a minimum to operate a successful community association (business). Read Know Your Business: You MUST Go Beyond 'The Basics' to learn more.
Data continuity is essential for every organization! What happens to your association's relationship (business or otherwise) with the person or entity keeping track of your records ceases to exist? Does your association maintain its own file infrastructure to preserve the continuity of information? There is an abundance of human work required to organize records -- analog or digital -- into a viable, readily indexed repository.
Many management companies supply their customer associations with a software package that evaporates when the management relationship ends. This particular nuance makes common interest communities perhaps the only business vertical that willingly chooses to have record access relegated to a file dump when a vendor relationship runs its course. If your community pays a staff and/or management company for assistance, homeowners should have little need to be routinely interact to maintain their longitudinal CRM solution. Ensuring your staff and/or management representatives are directed to maintain your CRM system is essential.
Failure to establish and maintain an association-controlled electronic information system guarantees a loss of continuity when your management relationship ends. CIC document management (storage, retrieval and collaboration) is an area of CIC operations that deserves more attention and stands to benefit homeowners, volunteers staff and management representatives by increasing synthesis and teamwork and providing smoother, more meaningful transitions and greater continuity of information.
DOCUMENT BREAKDOWN BY AUDIENCE / EASE OF ACCESS
Documents available to the public (relevant if your community offers a public-facing website)
Documents available to all owners proactively (minimum friction, maximum efficiency)
Documents available to all owners by request (VIEW our Disclosure page)
Documents that are confidential to the Board
e.g. legal opinions that haven't been unsealed, administrative proceedings, etc. (VIEW our Confidentiality page)
Documents that are typically accessed only by a community manager / management company
e.g. certain types of employee records, individual unit files, etc. that are often not shared with the Board
WHERE DO YOU STORE FILES?
Email <<< Email is both the most popular way to exchange information and the worst place to store it!
Paper (are printers, copiers and three-ring binders are still in vogue?)
Association-managed document repository (CRM portals, Dropbox, Google Drive, MS365, Sharepoint, etc.)
3rd party IT infrastructure (Active Building, BuildingLink, Condo Control Central, CondoSites, eUnify, Manage my Nest, etc.)
Consider the difference between IT infrastructure that your association can easily control vs. third-party infrastructure that may cease to exist if you change management or change IT vendors
Does your IT infrastructure
facilitate collaboration features for a team of people (Board and Committee members, etc.) to share and edit documents?
allow you to search for documents and index the text they contain for maximum identification potential?
allow you to easily download and/or transfer all your files to another platform?
provide data security and backup/disaster recovery?
If your IT infrastructure is not cloud-based, how are you ensuring redundancy in case of storage failure? Do you have a written digital redundancy policy and/or backup procedures and checksums?
Regardless of the technology you adopt, developing a reliable human process to maintain your file infrastructure is paramount.
Community associations are not clandestine operations! Don't over-think the necessity of "secure" document storage.
Password-protected CRM portals, web pages and document sharing links are no more secure than emailing documents to your members.
Most (95%+) of your associations' records should be available for member discovery and disclosure. What steps has your association taken to promote the frictionless exchange of records and information?
Your association should carry Cyber Liability coverage
Record Retention: Nonprofit Corporation Act
N.B. The Nonprofit Corporation Act is generally superseded by specific CIC statues where those statutes overlap relative to a CIC.
RCW 24.03A.210 - Corporate Records
(1) A nonprofit corporation shall keep permanently a copy of the following records:
(a) Minutes of all meetings of its members and of its board of directors;
(b) A record of all actions taken by the members and board of directors by unanimous written consent; and
(c) A record of all actions taken on behalf of the corporation by a committee of the board.
(2) A nonprofit corporation shall keep a current copy of the following records:
(a) Its articles of incorporation or restated articles of incorporation and all amendments to them currently in effect;
(b) Its bylaws or restated bylaws and all amendments to them currently in effect;
(c) All communications in the form of a record to members generally within the past six years, including the financial statements furnished for the past six years under RCW 24.03A.225;
(d) A list of the names and business addresses of its current directors and officers; and
(e) Its most recent annual report delivered to the secretary of state under RCW 24.03A.070.
(3) A nonprofit corporation shall maintain appropriate accounting records.
(4) A membership corporation or its agent shall maintain a record of its members, in a form that permits preparation of a list of the names and addresses of all members, in alphabetical order by class, showing the number of votes each member is entitled to cast.
(5) A nonprofit corporation shall maintain its records in written form or in any other form of a record.
(6) All records required to be maintained by a nonprofit corporation may be maintained at any location within or without this state.
Record Retention: WUCIOA
Washington's WUCIOA statute does an excellent job of identifying categories of documents that must be retained.
RCW 64.90.495(1) - An association must retain the following:
(a) The current budget, detailed records of receipts and expenditures affecting the operation and administration of the association, and other appropriate accounting records within the last seven years;
(b) Minutes of all meetings of its unit owners and board other than executive sessions, a record of all actions taken by the unit owners or board without a meeting, and a record of all actions taken by a committee in place of the board on behalf of the association;
(c) The names of current unit owners, addresses used by the association to communicate with them, and the number of votes allocated to each unit;
(d) Its original or restated declaration, organizational documents, all amendments to the declaration and organizational documents, and all rules currently in effect;
(e) All financial statements and tax returns of the association for the past seven years;
(f) A list of the names and addresses of its current board members and officers;
(g) Its most recent annual report delivered to the secretary of state, if any;
(h) Financial and other records sufficiently detailed to enable the association to comply with RCW 64.90.640;
(i) Copies of contracts to which it is or was a party within the last seven years;
(j) Materials relied upon by the board or any committee to approve or deny any requests for design or architectural approval for a period of seven years after the decision is made;
(k) Materials relied upon by the board or any committee concerning a decision to enforce the governing documents for a period of seven years after the decision is made;
(l) Copies of insurance policies under which the association is a named insured;
(m) Any current warranties provided to the association;
(n) Copies of all notices provided to unit owners or the association in accordance with this chapter or the governing documents; and
(o) Ballots, proxies, absentee ballots, and other records related to voting by unit owners for one year after the election, action, or vote to which they relate.
Record Retention: Condominium Act
See above reference to WUCIOA for a categorical list of documents that must be retained.
RCW 64.34.372(1)- Association Records - Funds
(1) The association shall keep financial records sufficiently detailed to enable the association to comply with RCW 64.34.425. All financial and other records of the association, including but not limited to checks, bank records, and invoices, are the property of the association, but shall be made reasonably available for examination and copying by the manager of the association, any unit owner, or the owner's authorized agents...
RCW 64.34.425 - Resale of Unit (View Unit Resale page)