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On and Off the Record Confidentiality is a Tightrope for Association Boards

To disclose or not to disclose? That is the question community association boards wrestle with on a regular basis. If homeowners want to see the association’s financial records, should the books be open to them? What about a list of owners who are in arrears with their condo fees? Or details of the current snowplowing contract? Should boards let neighbors know that a registered sex offender has moved into the community? What if an association employee is under investigation for stealing or other criminal activity?

Balancing the community’s right to know with the individual’s right to privacy can be a challenge – but industry professionals say that for the most part, board members using common sense tend to make the right decision. And when they’re not sure, they should have an attorney handy.

“It’s all about balance,” says David J. Levy, principal of Sterling Services, Inc., a Holliston, Massachusetts, management firm. “The manager and board have to be aware of the mutually-conflictinggoals. You need to be as transparent and open as possible, but on the flip side, some things have to remain confidential. There’s a conflict between the need to disclose, and the need for privacy.”

One job of the association manager, he said, is to “constantly remind trustees about that balance.”

The Community Associations Institute (CAI), in a set of 12 “Governance Guidelines” designed to help association board members “increase harmony, reduce conflict and build stronger, more successful communities,” promotes open communication between homeowners and boards. “Share critical information and rationale with residents about budgets, reserve funding, special assessments and other issues that couldimpact their financial obligations to the association,” the guidelines suggest. “Give members an opportunity – before final decisions are made – to ask questions of a representative who is fully familiar with these financial issues.”

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