Transparency Trend Reaches HOAs

A Must-Have for HOA Homeowners and Managers: A Fair, Unbiased Records Disclosure Policy.

Written by Marianne Schaefer for Read full article here.

Nov. 16, 2017

The trend toward greater transparency in cooperatives, condominiums and Homeowner Associations (HOA) continues its relentless march. On October 23, Gov. Andrew Cuomo signed a new law amending the state’s Not-For-Profit Corporation Law. This new amendment expands the rights of homeowners in HOAs to inspect the association’s invoices, ledgers, bank accounts, reconciliations, contracts, and any documents related to the expenditure of HOA dues.

“Generally speaking I see a trend to more and more transparency and a full disclosure of just about all documents,” says attorney Marc Schneider, a managing partner at Schneider Buchel. “I was very surprised that the legislature did not simultaneously amend the Business Corporation Law, which covers co-ops. But I think that, too, will come.”

[R]ecent court decisions have granted co-op shareholders and condo unit-owners greater access to documents. And the new law on HOA documents follows a recently enacted law requiring co-op and condo boards to prepare annual reports on all awarded contracts, plus any financial stake a director had in those contracts. Even if there was no conflict of interest, boards must prepare and distribute an annual report of all contracts.

“I think this is all going a bit too far,” Schneider says of the new HOA law. “It opens up the door for unnecessary scrutiny. The people who want access to these documents might have good intentions and want to help. But anybody who is looking at these documents will come up with their own interpretations….”

Cynthia Lovecchio, board president at The Legend Yacht & Beach Club (LYBC), a 47-unit HOA in Glen Cove, Long Island, is not worried about the current trend in laws and court decisions. “Even though I haven’t read the legislation, I’m a big advocate for transparency,” Lovecchio says.

Alvin Wasserman, director of asset management at Fairfield Properties, which manages LYBC, says, “I think increased transparency will take some of the mystery out of how boards conduct business.”

Schneider emphasizes that “review” does not mean a homeowner has the right to copy documents or take them out of the office. “The law says ‘review,’ which by definition means examine and not copy,” he says. “At best, the homeowner is allowed to take handwritten notes. This will protect boards somewhat from the improper dissemination of the information.”  He advises having someone present during document inspections to make sure no electronic devices are used.  Non-disclosure agreements are not required under the new law. The law does require that the requesting member must have been a homeowner of record for at least six months immediately preceding the inspection request.

Will the new law be a burden to boards and their management companies? Wasserman doesn’t think so. “As for extra work,” he says, “all boards have to do is post their monthly financial reports on the password-protected HOA website.”

This entry was posted in CMCA by CMCA ~ The Essential Credential. Bookmark the permalink.

About CMCA ~ The Essential Credential

CAMICB is a more than 25 year old independent professional certification body responsible for developing and delivering the Certified Manager of Community Associations® (CMCA) examination. CAMICB awards and maintains the CMCA credential, recognized worldwide as a benchmark of professionalism in the field of common interest community management. The CMCA examination tests the knowledge, skills, and abilities required to perform effectively as a professional community association manager. CMCA credential holders attest to full compliance with the CMCA Standards of Professional Conduct, committing to ethical and informed execution of the duties of a professional manager. The CMCA credentialing program carries dual accreditation. The National Commission for Certifying Agencies (NCCA) accredits the CMCA program for meeting its U.S.-based standards for credentialing bodies. The ANSI National Accreditation Board (ANAB) accredits the CMCA program for meeting the stringent requirements of the ISO/IEC 17024 Standard, the international standards for certification bodies. The program's dual accreditation represents compliance with rigorous standards for developing, delivering, and maintaining a professional credentialing program. It underscores the strength and integrity of the CMCA credential. Privacy Policy:

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s