Far too often association documents are passed to new Board members in a box or as rubber-banded papers. Each Board member may retain the records for their area of responsibility because there’s no central storage location. This is just the active documents. If you need to find older HOA documents, your search may take you into basements, garages and attics. While not all HOA documents are of equal importance, following records retention guidelines is critical.
For most Board members, the thought of redesigning the filing system has zero appeal. You’re already busy and overworked. But, you know it’s time well spent if you’ve ever followed the needle in the haystack technique to find an important document. Small improvements that don’t take a lot of time can yield big results.
Boards need to establish procedures to ensure the safe storage and retrieval of all HOA documents. Here are a few tips that can help you get started.
Establish an on-site file location. If space is at a premium in your community, you may want to store only active files on-site for easy access. A central location that is easily accessible to all Board members is key to keeping your HOA files in filing cabinets instead of boxes in members’ homes.
Sort files according to retention guidelines. Retention requirements vary from “retain forever” to “hold a 3-7 years” to “destroy at will”. Your HOA attorney and/or accountant can advise you on timeframes to keep specific HOA documents. While every association has different needs, you may want to consult the standard industry guidelines as you develop the retention schedule for your HOA.
Identify an off-site storage facility. Permanent records can be retained off-site because they are accessed infrequently. The location should be resistant to rain, floods, fire and other hazards. For example, documents stored in a cardboard box in an attic may be subject to mice or squirrels. This is also a good place to keep a backup copy of important active records.
Use caution when storing electronic documents long-term. Two things threaten the accessibility of computer records: obsolete software and deteriorated or obsolete hardware. Your HOA may not have the software or computer to access a document that has been stored for 15+ years. While you may find someone who can retrieve the document, but it’s a hassle and expense that can be avoided by keeping a printed copy in addition to the electronic file.
It requires a little time to set up a proper filing system for your association. But, it’s a necessary task that saves time in the long run and helps you meet legal requirements. If your HOA is using the boxes and rubber-band filing system, get started today so you can find your records in minutes….not weeks.