Board Transparency Let It All Out — Really?

In town and city government, elected officials and committee volunteers are duty-bound and legally required to maintain open meetings and treat every line item of taxpayer funds as public information. Condominium communities, and the way they’re operated, are often compared to municipal governments, but there’s nothing “public” about them, really. Homeowners choose to buy into a community association and agree, by private contract, to abide by rules and regulations and pay fees for services. Does that mean the condo boards that oversee the spending of these fees can be covert about certain operations, or less transparent than government agencies that spend taxpayer dollars? 

Most New England states have addressed this very issue within the condo statutes, part of individual state laws, that evolved from consumer protection (see sidebar). But what, exactly, can and cannot be disclosed?

In Massachusetts, “the condo statute allows unit owners to view certain things, which are specifically listed in Section 10 of Chapter 183A,” explains attorney Frank Flynn, founder and managing partner of the Flynn Law Group in Boston.  “Sometimes, managers and trustees don’t think owners are entitled to see finances but the law is very clear…and a community’s condo docs (rules and regulations) may even expand on Section 10.”

Typically, a request for information comes from residents who realize they don’t know enough about their association finances and are feeling left out of the information loop, or may be growing suspicious for some reason. Flynn notes, “I have drafted demand letters for a unit owner who wonders, ‘where did the money go?’ and I’ve had board members ask, ‘do we really have to show them?’ all the financial records.”

If suspicions rise, board members may become defensive and try to close channels of communication, but statutes mandate “open books” are maintained…literally. Flynn explains, “In an extreme case, you can file an injunctive action to see the association’s records. As an example, we took over a community recently in southeastern Massachusetts, where the property manager was terminated, new trustees were elected, and they asked (us) for legal help. We were able to get the bank accounts turned over and we had to hire a forensic accountant. We’ve had to recreate records and statements.” 

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Comments

  • Our management co loves our board of trustees. After taking out a $2 million loan and doing extensive work on our property consisting of 2 buildings , 30 units in each, we finally had our first actual annual meeting this week in seven trustees were up for reelection our management company said which was totally untrue. They did this because they wanted to seem people to stay on the board of trustees. When the votes were passed in last evening they counted them without any presence , ( meaning the management co ) did this. I win on that board in they are doing the percentage process per condominium in the results do not make sense to me Is it also legal after an owner sends in her valid and the management company calls that person and tells them they have to vote for more people, and they’re filling iT in. This sounds so sketchy to me. Is this a case of deception?