{"id":2731,"date":"2023-05-26T17:18:15","date_gmt":"2023-05-26T21:18:15","guid":{"rendered":"http:\/\/blog.tarleyrobinson.com\/?p=2731"},"modified":"2023-05-26T17:18:15","modified_gmt":"2023-05-26T21:18:15","slug":"requests-inspect-copy-community-association-company-records-complicated","status":"publish","type":"post","link":"https:\/\/blog.tarleyrobinson.com\/?p=2731","title":{"rendered":"Requests to Inspect and Copy Community Association or Company Records: Should it be this complicated?"},"content":{"rendered":"<p>A Virginia Beach jury found a condominium association liable for failing to permit unit owners an opportunity to inspect and copy association records. Not only must the condo board allow inspection and copying, they must pay for an audit of the association records\u00a0<strong>and<\/strong> pay $50,000 for the unit owners&#8217; attorneys&#8217; fees.<\/p>\n<p>These questions arise frequently. This blog post reviews the various Virginia statutes that address the right to inspect and copy records for companies, HOAs and condominium associations.<\/p>\n<p style=\"text-align: center;\"><a href=\"https:\/\/blog.tarleyrobinson.com\/wp-content\/uploads\/2014\/04\/MP900409031.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter  wp-image-2672\" src=\"https:\/\/blog.tarleyrobinson.com\/wp-content\/uploads\/2014\/04\/MP900409031.jpg\" alt=\"HOA Filing Information\" width=\"221\" height=\"221\" srcset=\"https:\/\/blog.tarleyrobinson.com\/wp-content\/uploads\/2014\/04\/MP900409031.jpg 1024w, https:\/\/blog.tarleyrobinson.com\/wp-content\/uploads\/2014\/04\/MP900409031-150x150.jpg 150w, https:\/\/blog.tarleyrobinson.com\/wp-content\/uploads\/2014\/04\/MP900409031-300x300.jpg 300w\" sizes=\"(max-width: 221px) 100vw, 221px\" \/><\/a><\/p>\n<p><!--more--><\/p>\n<p>There are <strong><span style=\"text-decoration: underline;\">five different statutes<\/span><\/strong> that address a right to inspect and copy company records.<\/p>\n<p>1. <a href=\"https:\/\/law.lis.virginia.gov\/vacode\/title55.1\/chapter19\/section55.1-1945\/\"><strong>Virginia Condominium Ac<\/strong>t<\/a>. A unit owner in good standing has the right to\u00a0examine and copy association records &#8220;so long as the <em>request is for a proper purpose<\/em> related to his membership in the\u00a0unit owners\u2019 association, and not for pecuniary gain or commercial solicitation.&#8221; This statute was applied in a case in which the <a href=\"https:\/\/law.justia.com\/cases\/virginia\/supreme-court\/1992\/910871-1.html\">Virginia Supreme Court permitted a unit owner<\/a> to inspect and copy salary information which identified the precise compensation paid to certain employees.\u00a0Generally, an association can withhold records relating to<\/p>\n<ul>\n<li><span style=\"font-size: 13px;\">Personnel matters;<\/span><\/li>\n<li><span style=\"font-size: 13px;\">Contracts, leases, and other commercial transactions to purchase or provide goods or services, currently in or under negotiation;<\/span><\/li>\n<li><span style=\"font-size: 13px;\">Pending or probable\u00a0litigation.\u00a0<\/span><\/li>\n<li><span style=\"font-size: 13px;\">Matters involving\u00a0state\u00a0or local administrative or other formal proceedings before a government tribunal for enforcement of the condominium\u00a0instruments or rules and regulations promulgated by the\u00a0executive organ;<\/span><\/li>\n<li><span style=\"font-size: 13px;\">Communications with legal\u00a0counsel;<\/span><\/li>\n<li><span style=\"font-size: 13px;\">Disclosure of information in violation of\u00a0law;<\/span><\/li>\n<li><span style=\"font-size: 13px;\">Meeting\u00a0minutes or other confidential\u00a0records\u00a0of an executive session<\/span><span style=\"font-size: 13px;\">;<\/span><\/li>\n<li><span style=\"font-size: 13px;\">Documentation compiled for consideration by the executive organ\u00a0in executive session; or<\/span><\/li>\n<li><span style=\"font-size: 13px;\">Individual\u00a0unit owner\u00a0or member files.<\/span><\/li>\n<\/ul>\n<p>2. <strong>Virginia Property Owners Association Act<\/strong>. A member in good standing can examine and copy certain HOA records &#8220;<a href=\"https:\/\/law.lis.virginia.gov\/vacode\/title55.1\/chapter18\/section55.1-1815\/\">so long as the request is for a proper purpose related to his membership in the\u00a0association<\/a>.&#8221; This right is limited similarly as set forth in the Virginia Condominium Act.<\/p>\n<p>3. <strong>Virginia Stock Corporation Act<\/strong>. <a href=\"https:\/\/law.lis.virginia.gov\/vacode\/title13.1\/chapter9\/section13.1-771\/\">A\u00a0shareholder\u00a0of a\u00a0corporation\u00a0is entitled to inspect and copy certain records<\/a> of the\u00a0corporation. However, this right is limited to when<span style=\"font-size: 13px;\"><br \/>\n<\/span><\/p>\n<ul>\n<li><span style=\"font-size: 13px;\">The\u00a0shareholder\u00a0has been a\u00a0shareholder\u00a0for at least six months immediately preceding the\u00a0shareholder\u2019s demand or is the holder of record or\u00a0beneficial owner\u00a0of at least five percent of all of the outstanding\u00a0shares;<\/span><\/li>\n<li><span style=\"font-size: 13px;\">The\u00a0shareholder\u2019s demand is made <em>in good faith and for a proper purpose<\/em>;<\/span><\/li>\n<li><span style=\"font-size: 13px;\">The\u00a0shareholder\u00a0<em>describes with reasonable particularity the shareholder\u2019s purpose<\/em> and the records the\u00a0shareholder\u00a0desires to inspect; and<\/span><\/li>\n<li><span style=\"font-size: 13px;\">The records are directly connected with the\u00a0shareholder\u2019s purpose.<\/span><\/li>\n<\/ul>\n<p>4. <strong>Virginia Nonstock Corporation Act<\/strong>. Under this act, <a href=\"https:\/\/law.lis.virginia.gov\/vacode\/title13.1\/chapter10\/section13.1-933\/\">a\u00a0member \u00a0is entitled to inspect and copy certain records of the\u00a0corporation<\/a>. However, this right is limited to when<\/p>\n<ul>\n<li><span style=\"font-size: 13px;\">She has been a\u00a0member\u00a0of record for at least six months immediately preceding the demand;<\/span><\/li>\n<li>The\u00a0<span style=\"font-size: 13px;\">demand is made <em>in good faith and for a proper purpose<\/em>;<\/span><\/li>\n<li><span style=\"font-size: 13px;\">She <em>describes with reasonable particularity his purpose<\/em> and the records to inspect; and<\/span><\/li>\n<li><span style=\"font-size: 13px;\">The records are directly connected with the purpose.<\/span><\/li>\n<\/ul>\n<p>5. <strong>Virginia Limited Liability Act<\/strong>. Finally, <a href=\"https:\/\/law.lis.virginia.gov\/vacode\/title13.1\/chapter12\/section13.1-1028\/\">under this Act, a member has the right<\/a>,\u00a0<em>upon reasonable request<\/em>, to inspect and copy any of the\u00a0limited liability company\u00a0records required to be maintained by the Act. However, even that right is qualified. If\u00a0the information demanded is unreasonable or otherwise improper under the circumstances, inspection can be limited. Further, access can be limited by the company&#8217;s operating agreement.<\/p>\n<p>Depending upon the entity, access to records for inspection and copying can be confusing. Generally, we would expect a court to rule expansively on a member or shareholder&#8217;s right to access. Make sure your company, homeowner&#8217;s association, or condominium association is well advised on its obligations to maintain records and provide access to those records.<\/p>\n<p><span style=\"color: #993300;\"><strong><br \/>\nTarley Robinson, PLC, Attorneys and Counsellors at Law<\/strong><\/span><\/p>\n<p><span style=\"color: #993300;\"><strong>Williamsburg, Virginia<\/strong><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>A Virginia Beach jury found a condominium association liable for failing to permit unit owners an opportunity to inspect and copy association records. Not only must the condo board allow inspection and copying, they must pay for an audit of the association records\u00a0and pay $50,000 for the unit owners&#8217; attorneys&#8217; fees. These questions arise frequently. [&hellip;]<\/p>\n","protected":false},"author":5,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[336,6,3,57,75,25,141],"tags":[9,224,40,60,169],"_links":{"self":[{"href":"https:\/\/blog.tarleyrobinson.com\/index.php?rest_route=\/wp\/v2\/posts\/2731"}],"collection":[{"href":"https:\/\/blog.tarleyrobinson.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.tarleyrobinson.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.tarleyrobinson.com\/index.php?rest_route=\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.tarleyrobinson.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2731"}],"version-history":[{"count":3,"href":"https:\/\/blog.tarleyrobinson.com\/index.php?rest_route=\/wp\/v2\/posts\/2731\/revisions"}],"predecessor-version":[{"id":3051,"href":"https:\/\/blog.tarleyrobinson.com\/index.php?rest_route=\/wp\/v2\/posts\/2731\/revisions\/3051"}],"wp:attachment":[{"href":"https:\/\/blog.tarleyrobinson.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2731"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.tarleyrobinson.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2731"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.tarleyrobinson.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2731"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}