|Section 107: The Right to Oversight of Associations and Directors|
1. Open Records. All association meeting minutes, financial and budget materials,
contracts, court filings, and other records must be maintained for at least four years at
the association’s main business office or other suitable location near homes in the
a. Except as provided in ¶ 1b, the association must make all records available for homeowners, their authorized agents, or the ombudsperson to inspect and copy
i. during regular working hours, within ten days of a written request without requiring a statement of purpose or reason; and
ii. during an inspection, allowing copying of up to 25 pages at no cost, if the association or its agent has a photocopy machine at the site of the records; and in any event
iii. with a charge to the homeowner only for actual copying costs, not to exceed __ cents per page plus staff time charges not to exceed $ __ per hour. 
b. Documents protected by the attorney-client privilege or as work product are exempt from disclosure to the same extent as they would be in litigation, as are contracts being negotiated. The following records also are exempt from disclosure to homeowners or their agents, except upon court order for good cause shown, provided that the ombudsperson may obtain the following records, and provided further that such records shall be kept confidential except upon court order for good cause shown:
i. staff personnel records, except the association shall make available under ¶ 1a records of time worked and salary and benefits paid; and
ii. records of homeowners other than the requester, except the association shall make available under ¶ 1a the list of homeowners with their mailing addresses and a compilation of violations of the governing documents, other than for nonpayment of an assessment, and this compilation must
a) describe the violation alleged and the sanction sought or imposed; and
b) not identify the person against whom the sanction was sought unless the matter was considered in an open meeting or court.
c. If an association refuses to allow a homeowner, homeowner’s agent, or the ombudsperson to review records as provided herein, the requester is entitled to an immediate injunction, a penalty of $500, or in the court’s discretion, more, and attorney fees, even if the association makes records available after filing of a case.
d. Any director may inspect any association records, except attorney-client privileged or work product records concerning potential, ongoing, or past litigation against the director. In addition to their rights under ¶ 1a, directors may make copies of minutes of any meeting during their term of office, and of any other document for purposes reasonably related to their duties as directors.
e. Pending litigation does not reduce the rights provided in this paragraph.
2. Quarterly Review. Every 90 days (or more frequently if required by governing documents), the directors shall review at one of the association meetings
a. the latest statements from financial institutions that hold association accounts;
b. current reconciliations of the association’s operating and reserve accounts;
c. year-to-date income and expense statement for association operating accounts, compared with the budget;
d. year-to-date revenues and expenses for the reserve account, compared with
the budget; and
e. the status of any lawsuit, arbitration, or mediation involving the association.
3. Open Meetings. Except for executive sessions, homeowners may attend, record, and (subject to reasonable limits) speak at any meeting of the association or its directors.
a. Directors may meet in executive session only to
i. approve, modify, terminate or take other action regarding a contract between the association and an attorney;
ii. consult with counsel on litigation or otherwise to obtain legal advice, if the discussion would be protected by attorney-client privilege;
iii. discuss the character, alleged misconduct, professional competence, or physical or mental health of an association manager or employee;
iv. discuss a homeowner’s failure to pay an assessment or other alleged violation of governing documents, except as provided in ¶ 3b; or
v. discuss ongoing contract negotiations.
b. Directors shall use executive session to discuss alleged violations of governing documents unless the person who may be sanctioned requests an open meeting in writing. The person who may be sanctioned may attend and testify at any hearing concerning the alleged violation, but has no right to attend director deliberations.
c. Meeting minutes shall note generally any matter discussed in executive session.
4. Open Voting. All votes by directors shall be recorded in the minutes available to all homeowners, except to the extent permitted by ¶ 3. Directors may not vote by proxy or by secret ballot, except a secret ballot to elect officers. This rule also applies to any committee or agent of the association that makes final decisions to spend association funds, or approve or disapprove architectural decisions.
5. Special Meetings. In addition to any provisions for special meetings in the governing
documents, the following provisions apply:
a. The directors shall provide 30 days notice and convene a special meeting of the association to be held no less than 30 days and no more than 60 days after the chair, the secretary, or the association’s registered agent receives a petition stating one or more purposes for such meeting and signed by homeowners holding 10 percent of the voting power, unless other law or the corporate documents state a different percentage. The petition may specify a person to chair the special meeting. Each purpose and, if specified in the petition, the chair of such special meeting shall be stated in its notice.
b. If the directors fail to provide notice and convene the meeting as provided in ¶ 5a, then upon written petition to the ombudsperson (with copy to the association), the ombudsperson shall notice and convene the requested meeting subject to the other provisions of ¶ 5a. The association shall pay costs reasonably incurred by the ombudsperson. Such action shall not disqualify the ombudsperson from exercising any other power.
6. Election and Ballot Oversight. If at least 100 homeowners or homeowners holding 15 percent of the voting power in an election or other ballot provide a written request to the ombudsperson (with copy to the association) at least 15 days in advance, the ombudsperson shall supervise the election or ballot, and if so, shall retain copies of the election or ballot records (including all proxies submitted, whether or not counted). The ombudsperson also has discretion to supervise the election or ballot in one or more homeowners provide a written request at least 15 days in advance. The association shall pay costs reasonably incurred by the ombudsperson. Such action shall not disqualify the ombudsperson from exercising any other power.
7. Recalls. Except for directors appointed by the developer and directors elected by
cumulative voting,  directors shall be subject to recall (without use of proxy votes)
 This does not override obligations under other laws, to keep documents on site or in storage.
 Such charges should take into account market rates for staff, and the principle that neither associations nor managers should profit by such requests. Charges by state or local government may set a good model.
 Cumulative voting systems ensure significant groups of homeowners elect a director, even if the groups do not come close to majority power. “In cumulative voting, voters cast as many votes as there are seats. But unlike winner-take-all systems, voters are not limited to giving only one vote to a candidate. Instead, they can put multiple votes on one or more candidates. For instance, in an election for a five-seat body, voters could choose to give one vote each to five candidates, two votes to one candidate and three to another, or all five votes to a single candidate. If members of minority group work together and get behind a single candidate, "plumping" all of their votes on him or her, they can hope to get someone elected, even if they only make up a small share of the population.” See www.fairvote.org/?page=563.
a. Any director may be recalled without cause by persons holding a majority of the total voting power, provided a homeowner’s voting power for purposes of recall equals that to elect directors, and when only specific homeowners have power to elect a director, only those homeowners have voting power for recall.
b. One or more directors may be recalled by written agreement or ballots without an annual or special meeting.
i. The written agreement or ballots, or a copy thereof, shall be served on the association by certified mail or by personal service under process permitted by state law.
ii. Within five business days after receipt of the agreement or ballots, the directors shall meet--without excluding directors proposed for recall -- and, as the only business, as to each director proposed for recall shall either (A) certify the recall, in which case recall takes effect immediately and the recalled director shall within five business days turn over to the association all association records and property possessed by the director, or (B) proceed as described in ¶ 7d.
iii. If a court or the ombudsperson finds a recall effort defective, written recall agreements or ballots used in that recall effort and not found defective may be reused in only the next recall effort, if any. However, no written recall agreement or ballot shall be valid more than 120 days after being signed by a homeowner.
iv. A homeowner may revoke a vote by recall agreement or ballot, but only in writing delivered to the association before service of the recall agreement or ballot.
c. If corporate documents specifically provide, homeowners may recall a director or directors by a vote taken at an annual or special meeting of homeowners.
i. A special meeting of homeowners to recall a director or directors may be called by homeowners with 15 percent of voting power (as defined in ¶ 7a) by giving notice as required for a special meeting, except that electronic transmission may not be used, and the notice shall state the purpose of the meeting.
ii. Within five business days after the special meeting, the directors shall meet--without excluding all directors proposed for recall--and, as their only business, as to each director proposed for recall shall either (A) certify the vote to recall, in which case recall takes effect immediately and the recalled director shall within five business days turn over to the association all association records and property possessed by the director, or (B) proceed as described in ¶ 7d.
d. Separately with respect to each director proposed for recall, if the directors do not certify the recall, the directors shall, within five business days after their meeting, petition the ombudsperson for arbitration, following procedures adopted by the ombudsperson. For purposes of this arbitration, homeowners who voted for recall shall be considered one party under the petition. If the ombudsperson certifies the recall of a director, the recall will be effective upon mailing the final order of arbitration to the association, and each director so recalled shall deliver to the association all records of the association possessed by the director within five business days after notice of the recall. Such decision shall be subject to review in court with jurisdiction in the county where the association maintains its principal office, but such pending action shall not delay implementation of the ombudsperson’s decision.
e. Vacancies created by recall shall be filled by homeowner vote held within 30 days after the recall is certified by the directors or by the ombudsperson, except that a director whose term expires within 30 days need not be replaced, provided
i. for recall pursuant to ¶ 7b, no separate vote shall be held if the written agreement or ballot specifies one replacement director for each director recalled, and homeowners holding a majority of the voting power vote for the named replacements; and
ii. for recall pursuant to ¶ 7c, the homeowner vote for replacement may take place at the same meeting held for the recall.
f. If the directors fail to meet within five business days after service of a written recall agreement or ballot pursuant to ¶ 7b, or within five business days after adjournment of a recall meeting pursuant to ¶ 7c, the recall shall be deemed effective and the directors so recalled shall immediately turn over to the association all records and property of the association. Any homeowner may petition the ombudsperson for certification that directors have been recalled pursuant to this ¶ 7f.
g. If a director who is removed fails to relinquish office or turn over records and property as required under this ¶ 7, a court in the county where the association maintains its principal office may, upon the petition by the ombudsperson, the association, or homeowners, summarily order the director to relinquish office and turn over all association records and documents to the association.
h. Minutes of the meeting where directors decide whether to certify the recall are an association record. The minutes must record the date and time, each decision, and the vote count separately taken as to each director proposed for recall. In addition, when the directors decide not to certify a recall, as to each rejected recall, the minutes must identify any rejected vote and the specific reason for each such rejection.
i. When recall of more than one director is sought, the written agreement, ballot, or vote at a meeting shall provide for a separate vote for each director sought to be recalled.
j. Nothing in this ¶ 7 prevents a recalled director from retaining documents lawfully obtained under ¶ 1.
Wide consensus supports homeowner rights to open records.122 CAI recognizes “a quality community association should … [keep the] association’s legal documents, resolutions, books and records … in a location that is open to inspection by owners on reasonable notice during regular business hours.”  State laws typically favor disclosure, with some variations. 
The model statute in ¶ 1 likewise favors disclosure absent strong reason for confidentiality.
Existing laws notwithstanding, homeowners frequently experience difficulty in obtaining records when disputes arise with their association. For example, associations sometimes impose prohibitively expensive hourly charges. The model statute limits what associations can charge, and provides for penalties and attorney fees if associations improperly withhold records. 
The limitation to actual costs in ¶ 1a(iii) means that associations cannot impose charges for copies made by digital cameras, portable scanners, or other equipment homeowners themselves provide.
In addition to independent review by homeowners, state law typically authorizes directors to
review documents.  Homeowners may contact directors to exercise this right, and directors
retain their rights as homeowners.
Fiscal disputes often arise within common-interest communities, and states often require specific financial records.  The model statute in ¶ 2 aims to reduce incidence of such disputes, and misconduct, by requiring disclosures, following Nevada’s example. This provision is not intended to address the full range of required financial reports, the extent of which depends on association activities, both operating and capital programs.
Wide consensus also supports homeowner rights to open meetings, including rights to address
Accountability requires that directors and other decision-makers vote on the record. The model statute in ¶ 4 follows Florida law with respect to limits on proxy votes and secret ballots, and on the extension of such rules to committees and agents. 
The model statute in ¶ 5 ensures homeowner rights to convene special meetings. A separate specific provision permits 5 percent of homeowners to call special meetings on operating rules. See Section 105, The Right to Stability in Rules and Charges (¶ 3e). For other purposes, special meetings should be available when a reasonable percentage of homeowners recognize the need for immediate action.  The open records provision in ¶ 1 specifically includes the right to obtain homeowner lists, which may help locate homeowners who support a special meeting. 
The model statute in ¶ 6 provides for election oversight by the ombudsperson, because of the
importance of fair elections to select directors. 
The model statute in ¶ 7 provides for recall of directors, based on Florida law, but does not
follow that statute’s mandatory binding arbitration of election disputes.  The ombudsperson
can take a position on recall, so the model statute relies on the courts for impartial review.
 E.g., Restatement § 6.13(1)(d) (homeowners deserve “reasonable access to information about the association, the common property, and the financial affairs of the association”); UCIOA § 3-118 (“[a]ll financial and other records must be made reasonably available for examination by any unit owner and his authorized agents)”; see also, e.g., Fla. Stat. Ann. 720.303(4) (records to be retained for up to seven years).
 Foundation for Community Association Research, Governance, Resident Involvement and Conflict Resolution (Best Practices Report #2), www.cairf.org/research/BPgovernance.pdf, last visited 11/6/05 (“CAI Best Governance Practices”) at 3; see also CAI “Public Policies,” supra n.59 at 3 & 13 (eff. 4/25/98) (“CAI also supports full and open disclosure to owners”).
 E.g., Cal. Civ. Code 1365.2 &1363(f); Nev. Rev. Stat. 116.31175, .31177 & .3118; Tex. Prop. Code 82.114 (b & c); Tex. Non-Profit Corporation Act, Art.1396-2.23; Fla. Stat. Ann. 720.303(4 & 5); Ariz. Rev. Stat. 33-1258 & 33- 1805. See also Grillo v. Montebello Condo. Unit Ass’n, 243 Va. 475, 416 S.E.2d 444 (1992) (right to inspect includes right to see employee compensation); Winter v. Playa del Sol, Inc., 353 So.2d 598 (Fla. DCA 1977) (owner may copy condo records although statute only provides for inspection); White Egret Condominium v. Franklin, 379 So.2d 346 (Fla. 1979) (need for records of other homeowners to show selective enforcement).
 See also Cal. Civ. Code 1365.2(e) & 1363(f); Nev. Rev. Stat. 116.31175, .31177 & .3118 (no charge greater than 25 cents per copy and $10 per hour to review); Tex. Prop. Code 82.114 (b & c); Tex. Non-Profit Corporation Act, Art.1396-2.23; Fla. Stat. Ann. 720.303(4-5) ($50 per day penalty, 50 cents per page, or actual cost).
 E.g., Cal. Corp. Code 8334; cf. Tex. Bus. Corp Act 2.44B; Committee for a Better Twin Rivers, supra n.7, 890 A.2d at 951-52 & 970 (rejecting vague, arbitrarily applied resolution governing director-disclosure of information).
 E.g., Fla. Stat. Ann. 720.303 (6 & 7) (including budgets and financial records) & 720.3086 (financial report); Ariz. Rev. Stat. 33-1243D & J & 33-1810 (budget and annual audit); Cal. Civ. Code 1365, 1365.5 & 1368 (annual budgets/year end reports/financial statements).
 Nev. Rev. Stat.116.31083(6); see also id., 116.31151 & UCIOA § 3-103(c) (budgets approved by homeowners).
 E.g., Restatement § 6.18; “CAI Best Governance Practices,” supra n.131, at 3 (homeowner rights to “attend board meetings, except when the board meets in executive session”).
 Nev. Rev. Stat. 116.3108(3 & 10) & 116.31083 (4 & 11) (right to attend and speak outside executive session, and right to tape-record meetings) & 116.31085 (executive session limited to privileged matters in litigation, certain nonsalary matters relating to employees and agents, violations of governing documents--unless the owner requests a public hearing); Cal. Civ. Code 1363.05 (b, d, g & i) (executive session limited to “consider litigation, matters relating to the formation of contracts with third parties, member discipline, [or] personnel matters,” and to protect homeowner privacy re certain violations, with homeowners’ rights to speak); Fla. Stat. Ann. 720 .303(2) (a & b) (open meetings, with homeowner rights to speak, except for attorney-client privilege and personnel matters), 720.306(10) (right to tape meetings) & 718.112; Ariz. Rev. Stat. 33-1248A & 33-1804A (right to speak; executive session limited to legal advice/litigation and personal, health, and financial information about homeowner or employee, including job evaluations/pay); Va. Code Act 55-510.1 (open meetings with broad right to record). Compare Tex. Gov. Code 551.0015 & 552.036 (government open meetings and open record rules apply only to three categories of large associations).
 Fla. Stat. Ann. 720.303(2)(c)(3).
 Compare Cal. Corp. Code 7510(e) (5 percent can call special meeting); Nev. Rev. Stat. 116.3108(2) (10 percent can call special meeting, fewer if provided in bylaws); Fla. Stat. Ann. 720.306(3) (10 percent) with Ariz. Rev. Stat. 3-1248B & 33-1804B (25 percent) and UCIOA § 3-108 (20 percent, fewer, if provided in the declaration,can call special meetings). Cf. Fla. Stat. Ann. 720.303(2)(d) (20 percent can force consideration at a board meeting). 133 Cf., IBS Financial Corp. v. Seidman & Assoc., L.L.C., 954 F.Supp. 980 (D.N.J. 1997), aff'd in part and rev'd in part, 136 F.3d 940 (3rd Cir. 1998) (proper purpose to seek shareholder lists by group entitled to make nominations).
 See Fla. Stat. Ann. 718.5012(9).
 Fla. Stat.Ann. 720.303(10); compare Nev. Rev. Stat. 116.31036 (requires a majority vote that includes at least 35 percent of all homeowners); UCIOA § 3-103(g) (two-thirds of quorum); Ariz. Rev. Stat. 33-1813A & 33-1243H (majority vote at special meeting); Cal. Corp. Code 7222 (depends on size of corporation).
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