A homeowner association is a business and, like any business, it generates documents and records. Invoices, bank statements, meeting minutes, contracts, communications with owners and vendors, committee reports ... the list is endless and the document management task can be onerous.

While not all HOA documents are of equal importance, what is and what is not essential can be unclear. However, good business practice dictates which records should be preserved and for how long.

HOA records generally fall under two broad categories, financial and corporate, with retention requirements varying from "retain forever" to "dump at will."

Financial Records. Most financial records should be kept permanently because they chart the financial history and because they could contain information that would have a bearing on current decisions. This list includes the general ledgers and journals along with year-end financial statements, tax returns, audit reports and depreciation schedules.

Financial records that might be subject to an IRS audit or to an accounting-related challenge include: accounts payable and accounts receivable ledgers, expense records, canceled checks, electronic payment records, purchase orders and vendor invoices. These records should be retained for at least seven years. Important financial documents, such as bank statements, deposit slips, budgets and petty cash vouchers should be held for at least four years.

Corporate Records. These represent the HOA's infrastructure and should be permanently retained. These include the governing documents (CC&Rs, articles of incorporation, bylaws, rules and regulations, deeds, easements, contracts and board resolutions). The historical perspective these documents provide is important because as the membership of a board changes, the collective memory remains in tact with these documents. Additionally, new board members need a basis for understanding the policies and procedures established by former boards and long serving board members have a written record to remind them of the reasons for previous decisions.

HOAs should also retain most records related to former employees for at least seven years, with the exception of their medical records, which, some experts say, should be retained for at least 30 years.

Seven years is also a good retention benchmark for expired contracts and old leases, insurance records, accident reports and settled insurance claims. Minutes of board meetings should be retained as long as the policies and decisions they document can be challenged in court, if not forever.

A similar retention policy applies to the recommendations and actions of committees and records documenting complaints filed by homeowners and how they were resolved.

Records relating to individual units or unit owners should be retained in separate unit owner files. General correspondence with unit owners, copies of work orders, complaints and violation notices should all be retained until the expiration of the statute of limitations on any legal action they might trigger. Requests for architectural modifications, decisions on those requests and other documents related to them should become part of each unit's permanent record to provide the background information future owners will require.

Storage and Recovery of Documents. Procedures should be established to ensure the safe storage and rapid recovery of all vital HOA documents. Among other measures, boards should:

• Centralize hard copy file storage for ease of access.

• File storage facility should be weather (rain, floods, etc.) and fire proof.

• Regularly back up computer files in a secure, off-site location.

Records Requests by Members. Most HOA records should be made available for examination by members or a member's representative. Certain records may be withheld such as:

1. Privileged communication between the board and the HOA's attorney;

2. Pending litigation;

3. Meeting minutes or other records of an executive session;

4. Personal, health and financial records of a member or employee, and

5. Records relating to job performance, compensation or complaints against an employee

Properly managing homeowner association records is a mundane but necessary task. Follow these guidelines to get your records in record time.

Excerpts from an article by Beth Mulcahy. For more innovative homeowner association management strategies, see Regenesis.net.

Published: September 5, 2007

Use of this article without permission is a violation of federal copyright laws.

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Broderick Perkins parlayed a career in old-school journalism into a contemporary digital news service that really hits home. The award-winning consumer journalist, originally from Wilmington, DE, is founder, publisher and executive editor of the bootstrap DeadlineNews Group, a Silicon Valley-based editorial content and consulting service specializing in residential real estate, consumer news and related editorial consulting services. The DeadlineNews Group includes the Web site, DeadlineNews.Com, offering real estate editorial content and consulting services, and its back shop, the Deadline Newsroom, an open house on news that really hits home. Perkins obtained his formal journalism education from University of Delaware and a journalism boot camp, the Institute of Journalism Education at the University of California-Berkeley. He went on to 20 years of service as a daily newspaper journalist at the Wilmington, DE News Journal and San Jose, CA Mercury News. Perkins covered housing on the San Jose Mercury News reporting team which earned a General News Reporting Pulitzer Prize in 1989 for coverage of the Loma Prieta earthquake. He has also produced real estate, consumer and small business content for the Wall Street Journal, Los Angeles Times, RealtyTimes.com, Nolo.com, Better Homes and Gardens, the National Association of Realtors, Homestore/Move and Intuit/Quicken among more than three dozen publications. In addition to managing the DeadlineNews Group, Perkins most recently served as chief editorial consultant for "Nolo's Essential Guide To Buying Your First Home" (Nolo $24.99) and writes real estate television scripts for RealtyTimes.com.