HOA Q&A: Can a board president withhold community financial info from other members?

Editor’s note: Attorneys at Goede, DeBoest & Cross respond to questions about Florida community association law. The firm represents community associations throughout Florida and focuses on condominium and homeowner association law, real estate law, civil litigation, estate planning and commercial transactions.

Q: I am on the board of the HOA where I live, and the rest of the board recently passed a resolution that said that from now on, only the president and the property manager can view and control the payroll information for the community. I was the only board member that voted against it, and I don’t understand how they could withhold that information from the rest of us. Doesn’t the rest of the board have the right to access that information? K.M., Fort Myers

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A: The board action that you described is not a proper exercise of the power of the board and impermissibly limits access to financial information by certain board members and the members of the Association. The board has certain obligations and responsibilities in managing the Association’s finances. Under Florida law, the board of directors of a homeowners association owes a fiduciary duty to the Association and its members. This fiduciary duty is a high standard of care that requires board members to act in the best interests of the Association and its members, exercise reasonable care, loyalty, and good faith, and avoid conflicts of interest. As fiduciaries, board members must always act with the utmost diligence, prudence, and honesty in managing the affairs and financial matters of the Association. In fulfilling their fiduciary duty, board members have an obligation to exercise reasonable care and prudence in managing the Association’s finances. This includes maintaining accurate and complete financial records, ensuring appropriate accounting practices, and overseeing financial transactions with care and diligence. The actions set forth in the resolution that you described would limit the rest of the board’s access to the payroll information, and therefore hinder their ability to make informed financial decisions on behalf of the Association.

Further, the actions of the board attempt to limit the rights of members to access relevant financial records. Florida law recognizes the right of all Association members to access certain financial records of the Association. Section 720.303(4)(j), Florida Statutes provides that the official records of a homeowners association include financial records, including, but not limited to, accounting records, financial statements and reports, and any other records that identify, measure, record, or communicate financial information. These records generally must be made available for inspection and copying by members, upon written request. As part of their fiduciary duty, board members have an obligation to provide members with access to the Association’s financial records. The board must respond to written requests for financial records within a reasonable time and make them available for inspection and copying as required by law. Failure to provide reasonable access to financial records may constitute a further breach of fiduciary duty. As members of the Association themselves, even if each individual board member were not on the board, they would still be entitled to access to the financial records of the Association upon written request.

In summary, the board owes a fiduciary duty to the Association and its members, including the obligation to manage the Association’s finances. In order to properly do so, the board must have access to all financial records of the Association. Further, the board is required by statute to provide access to those financial records to any member of the Association that submits a written request for same.

Avi S. Tryson, Esq., is partner of the law firm Goede, DeBoest & Cross. Visit www.gadclaw.com or to ask questions about your issues for future columns, send your inquiry to: question@gadclaw.com. The information provided herein is for informational purposes only and should not be construed as legal advice. The publication of this article does not create an attorney-client relationship between the reader and Goede, DeBoest & Cross, or any of our attorneys. Readers should not act or refrain from acting based upon the information contained in this article without first contacting an attorney, if you have questions about any of the issues raised herein. The hiring of an attorney is a decision that should not be based solely on advertisements or this column.

This article originally appeared on Treasure Coast Newspapers: HOA Q&A: Can a board president withhold community financial info?