Florida law 718.111(12) obligates “outgoing board members to return all official records … to the incoming board.” Why did the legislature have to go out of its way to create a specific law to obligate a proper transition from one board to the other? There must be a problem here.
The problem is that community associations have a lot of records and it goes beyond what a board of directors has control of because managers and management companies also have control of essential documents that very often go missing. Let’s take a few examples to demonstrate the problem.
A big wind comes and knocks off a couple of roofs in your association, it happens all the time. Well, the first thing that the insurance company wants are the maintenance records roofs going back seven years before they pay for the claim. No records…claim denied and its lawyer time.
Let’s face the facts and understand that community associations are volatile environments and calling them dynamic is kind. Boards of Directors change, emotions run high, management companies are dismissed frequently, as are attorneys, vendors and whoever else gets an opportunity to work for an association. In the middle of all of this mess records, contracts, ledgers, insurance policies, minutes, proof of mailings, warranties, governing documents, proof of meeting notices, notes and everything else that can be put on paper fall into a deep dark abyss never to be found again.
So what is the solution? First, the board of directors must establish a record keeping policy and protocol (vote on it and put it in the minutes). Said policy should identify all the records that an association must keep and for how long. This is easy because it’s all in the statutes (Florida condos 718.111 and Florida HOAs 720.305). Second, although it might seem to be expensive it is possible that all documents be kept electronically and not just on paper. Have them scanned and put them away on a remote server. This technology also gives an association a backup just in case that big wind comes and blows away your office or the management office. In the Florida statutes relating to condos 718.111(12)(b), it is crystal clear that documents can be maintained in digital format. In Florida HOA statutes 720.303(5) the legality of keeping records in digital form is not so clear but it is still a prudent idea. No matter what your board comes up with you should be able to easily get your hands on the minutes of a meeting from five years ago or all the maintenance records for the roofs. Try it and if you cannot get your eyes on them it proves that your community association has a problem that needs to be fixed right away.
Mitch Drimmer is a licensed community association manager and the Vice President of SNAP Collections by Association Financial Services, a Miami finance, business process outsourcing, and accredited collection agency specializing in community associations www.SnapCollections.com email:mitch@SnapCollections.com Tel: 305.677.0022 ex 804.