Don't get caught off guard: The importance of association record-keeping in Georgia

Friday May 17, 2024

Every business has records, and the rules around keeping and maintaining those records vary from business to business and from place to place. Condo and homeowner associations are no different. Georgia law requires associations to maintain certain records related to the association. Transparency and accountability from the board help maintain a healthy, happy association.
 
“Associations are obligated to keep accurate and complete records of all official association activities, transactions, and decisions,” explains Anthony Gragnano, a vice president in FirstService Residential's high-rise division. “Meticulous recordkeeping is imperative to ensure regulatory compliance and transparency. Some board members may unintentionally overlook the rules due to a lack of understanding or oversight.”

What records must an association maintain in Georgia?

For a condominium association or an association that has adopted Georgia Property Owner’s Association Act (the “POAA”), Georgia Code Section 44-3-106 (for condominiums) and Georgia Code Section 44-3-231 (for associations governed by the POAA) both provide that “the association shall keep:

  1. Detailed minutes of all meetings of the members of the association and of the board of directors.

  2. Detailed and accurate financial records, including itemized records of all receipts and expenditures.

  3. Any books and records as may be required by law or be necessary to reflect accurately the affairs and activities of the association. 

Section 3, above, uses fairly broad language to capture all records that accurately reflect the “affairs and activities of the association.”
 
“Read plainly, Georgia statutes requires condominium associations and POAA associations to maintain written records related to the operation of the association and all decisions that the association takes,” says Ruari J. O’Sullivan, a partner at Berman Fink Van Horn P.C.
 
In addition, Georgia Code Section 44-3-100 requires associations to keep copies of the articles of incorporation and bylaws of the association, and all amendments thereto at the principal and registered offices of the association.

What kinds of items are generally considered to be covered?

  • Governing documents: The declaration of condominium/covenants, articles of incorporation, bylaws, and any adopted rules and regulations.

  • Financial records: Detailed accounting records, financial statements, budgets, and contracts.

  • Meeting-related documents: Meeting minutes (board and membership), agendas, notices, ballots, voting proxies, and sign-in sheets.

  • Maintenance and project records: Bids for work, warranties, permits, plans, and other documentation relating to repairs, improvements, or purchases.

  • Correspondence: Communications with owners, residents, vendors, and governmental agencies.

  • Official rosters: Lists of unit/homeowners, contact information, and voting rights.

Georgia Code Section 14-3-1601 says that all Georgia associations, even if not governed by Georgia’s condominium code or the POAA, are subject to Georgia’s nonprofit corporation code. Under that code, an association must keep “as permanent records minutes of all meetings of its members and board of directors, executed consents evidencing all actions taken by the members or the board of directors without a meeting, a record of all actions taken by a committee of the board of directors in place of the board of directions on behalf of the corporation, and waivers of notice of all meetings of the board of directors and its committees.”
 
Additionally, Georgia’s nonprofit corporation code requires associations to maintain appropriate accounting records and a record of its members in a form that permits preparation of a list of the name and address of all members in alphabetical order, showing the number of votes each member is entitled to cast.

What official records can association members see?

Any member of an association may inspect and copy the following association records if they give at least five days notice:

  • Its articles or restated articles of incorporation and all amendments to them currently in effect.

  • Its bylaws or restated bylaws and all amendments to them currently in effect.

  • Resolutions adopted by either its members or board of directors increasing or decreasing the number of directors or the classification of directors, or relating to the characteristics, qualifications, rights, limitations, and obligations of members or any class or category of members.

  • Resolutions adopted by either its members or board of directors relating to the characteristics, qualifications, rights, limitations, and obligations of members or any class or category of members.

  • The minutes of all meetings of members, executed waivers of notice of meetings, and executed consents, delivered in writing or by electronic transmission, evidencing all actions taken or approved by the members without a meeting, for the past three years.

  • All communications in writing or by electronic transmission to members generally within the past three years, including the financial statements furnished for the past three years as required by the code

  • A list of the names and business or home addresses of its current directors and officers.

  • Its most recent annual registration delivered to the Secretary of State of Georgia. 

Additionally, members of an association are entitled to inspect and copy the following additional records of an association if they give at least five days’ notice of the request and if the member’s demand is made in good faith and for a proper purpose that is relevant to the member’s interest as a member and the member describes with particularity the purpose and the records it desires to inspect:

  1.  Excerpts from minutes of any meeting of the board of directors, records of any action of a committee of the board of directors while acting in place of the board of directors on behalf of the corporation, minutes of any meeting of the members, and records of action taken by the members or the board of directors without a meeting.

  2. Accounting records of the corporation.

  3. The membership list.

Best Practices for Record-Keeping

How should you maintain your association’s records? Start by investing in a centralized system for storing and labeling your records. Today, at least part of that will be cloud-based, so make sure you have a reliable, secure solution for your sensitive information. Your professional property management company can simplify that process for you.

However you choose to maintain your records, you must have ways for association members to access them. Options include PDFs in a password-protected area of your community website and hard copies available in the office.

Best practices for record maintenance include having multiple backups for digital records, including local backups and remote (cloud) storage, in the event of power failures, hurricanes, floods, fires or other severe damage. If you use a digital portal for resident access to some information, make sure its security is robust and updated regularly.

Hard copy records kept on site should also be well-organized and updated regularly to align with any digital updates. (For example, make sure the printed budget you have available for homeowner review matches the digital version in your system.)

It’s also important to keep logins for official records separate from personal email addresses and logins. Board members change and property managers change. Using neutral logins and making sure passwords for board business are shared will make transitions easier if there’s an emergency.

Policies around records requests

As noted above, associations may be required to provide access to certain records within 5 working days of receiving a written request. That can become daunting to manage. First, establish a clear policy governing how you handle records requests, if you don’t already have one. Some best practices to make handling records requests easier include:

  • Delegate: Identify a specific person (a board member, manager, or dedicated team member) to handle requests.

  • Outline: Define the acceptable process for submitting requests, including timeframes for providing records and any associated fees for copies, etc.

  • Accommodate: Address how to accommodate individuals with disabilities who may need assistance in accessing records.

  • Track: Implement a system to track requests, responses and any possible disputes.

Board member responsibilities and education

It is part of a board member’s fiduciary responsibility to stay on top of changes in laws and regulations around record keeping and follow any changes as they arise. The right property management partner will assist in making sure that your board’s members are always updated on important changes, so you stay in compliance at all times.
 
To learn more about how FirstService Residential can help you stay informed about regulatory changes and maintain your association’s compliance, contact us today.

Friday May 17, 2024