HOAs and Records Retention
HOAs tend to generate a great deal of paperwork. Whether it’s statements, receipts, invoices, or the minutes from previous meetings, a lot is being written down and filed away. And here’s hoping that your HOA has already made the switch to virtual paperwork to remain eco-friendly. If not, there’s no time like the present.
Anyway, with all that paperwork, it can sometimes be confusing what can be tossed out and what needs to be retained. Some HOAs hold on to every piece of paperwork dating back to the HOA’s inception. While there’s not anything necessarily wrong with that approach, it is a bit of overkill.
There are only a few types of records that an HOA needs to hang on to. Board minutes, as permanent records, need to be kept forever. (Which is why virtual copies are such a good idea.) Tax returns need to be kept for four years.
The importance of other records varies. For instance, it’s a good idea to keep insurance paperwork around, and documentation regarding repairs and upgrades will no doubt come in handy should anything go wrong in the future. It’s also a good idea to keep records regarding incidents with any homeowners, in case anything ever goes to court. Blueprints and bylaws are keepers too.
If you’re still keeping paper documentation, it should be stored in a cool, dry place on-site under lock and key. It’s also not a bad idea to keep copies of everything at an offsite location, just in case. And of course, if the records exist virtually, they should be regularly backed up onto a separate hard drive or the cloud.
Whether or not certain records should be kept is up to each HOA. But if there’s any doubt, then hang onto it.
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