Rules on Records Importance of Good Record-Keeping

When it comes to ensuring that important association documents are private and secure, board members and managers have to follow specific protocols. However, thanks to ignorance or negligence those guidelines aren’t always followed. And problems often occur as a result. To keep on the right side of the law—and to avoid costly legal issues and annoyed owners—it's imperative that boards and managers handle their community's records and documents in a coherent, systematic way, and one that respects both privacy and disclosure.

“One of the most common record-keeping missteps I see is the failure of associations to maintain complete copies of the recorded declaration and all amendments, including all exhibits,” says David Bendoff, principal with the Buffalo Grove-based law firm, Kovitz Shifrin and Nesbit. “Another relatively common mistake is the failure to keep an organized and complete set of minutes of meetings of both the board and the association.”

There are state regulations that can help boards and managers traverse related issues that at times are cumbersome. Ian Duni, co-founder of the Chicago-based Westward Management, explains that laws exist detailing the creation, storage and access of association records and pertinent documents. These stipulations, he notes, can be found in Section 19 of the Illinois Condominium Property Act (735 ILCS 605/1). “Chapter 13 to 72 of the Municipal Code of Chicago also contains statutes pertaining to owning and maintaining a condominium, but its provisions concerning records and documents are minimal and are controlled by the Illinois state statutes,” says Duni.

And while managers and board members have access to this information, confusion still results. “Sometimes, a board of directors may be lax in ensuring that a complete set of records is maintained by the management company along with an appropriate backup if those records are damaged, destroyed or withheld from the association,” says Attorney Michael Kim of Chicago-based Michael C. Kim and Associates. “In addition, there should be a clear, written document retention and destruction policy, which would govern the board and management as to the handling of records.”

Storage Location

The all-important first step is determining what files and records are considered sensitive, and require secure storage. The second equally important step is determining where and in what fashion the documents are to be stored.

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