Record Inspection Request Requires Rapid Response — Even if Request Rambles
Owner record requests can prove a hassle for managers and their clients, but courts clearly favor greater access to less — let alone the denial of access. An association in Michigan learned this lesson the hard way when confronted with requests that even the state Supreme Court described as “longwinded” and “often difficult to follow” (Bafna v. Echo Valley Condo Ass’n).
Repeat Requester Goes to Court
Over the course of several months, the owner in the case requested to inspect seven records:
- Bills or invoices showing the cost of past litigation,
- Records related to orders for wrist bands that gave owners access to the pool,
- Work orders or invoices for bulb replacement in the owner’s building,
- Board minutes for April-September 2019,
- Records related to when the owner’s checks from about June-September 2019 were received by the association and posted to his account,
- Board minutes for 2018, and
- Financial statements for 2017 and 2018.
The association denied the requests because they didn’t state a “proper purpose,” as required by Michigan law.
“The reason has to be more than idle curiosity,” says Kevin Hirzel, managing member of Hirzel Law, PLC, a Michigan-based firm that works with numerous community associations. “Owners can’t just try to drum up a reason for a lawsuit.”
The owner here responded to the denial by filing. His lawsuit filing (what’s known as a complaint) gave more detailed reasons for wanting to inspect the records than his initial requests. On the basis of the complaint, the trial court ordered the association to allow inspection, prompting it to appeal.
More Bad News
On appeal, the association contended that the owner had to state a proper purpose when his inspection requests were made. It submitted numerous emails between the association and the owner, arguing that, based on those, it was impossible to determine the documents he wanted to inspect or the purpose.
But, like the trial court, the Court of Appeals analyzed the requests by considering both the owner’s correspondence with the association and his legal complaint. It found that, where an owner clarifies the purpose of the request in the context of litigation, a court can consider such subsequent clarifications or reasons.
To do otherwise, the court said, would force litigating owners to go back to the drawing board. An owner would need to renew the original requests — this time with the specificity stated in the complaint — which the association may or may not grant.
The Court of Appeals found no reason why the trial court shouldn’t simply resolve the question based on the evidence before it and bring the matter to conclusion. It went on to find that all of the owner’s requests had a proper purpose, based on the initial requests and his complaint.
It’s worth noting that the court rejected the association’s argument that the requests should be denied because the owner was difficult to deal with. The court conceded that the requests were numerous and longwinded but found no evidence that they were made in bad faith.
The association couldn’t deny the owner his right to inspect documents in good faith just because he attempted to exercise that right repeatedly and in a “verbose” writing style.
Lessons Learned
The court’s reliance on the complaint to assess the propriety of the requests in this case is striking. “Normally, prior to this case, the standard was that you have to state the proper purpose in the document request itself,” Hirzel says.
“This ruling treats the owner’s complaint as a request under the statute.”
Of course, not every state requires an owner to have a “proper purpose” when requesting documents. “We can’t require a reason for the request in Florida,” says Alessandra Stivelman, a partner/shareholder in Eisinger Law in Hollywood, Fla., who focuses on real estate and association law, “so this wouldn’t even have made it to court.
“Our statute is very clear that you have to allow access within 10 days of receiving a request. We have a presumption of guilt if you don’t comply, with a penalty of up to $50 per day for up to 10 days (beginning on the 11th business day after receipt of the request). If the owner has to enforce, they’re entitled to attorneys’ fees.
“You can’t necessarily deny a request even if it’s very intense. Someone can say they want all of the records.” Florida does, however, permit associations to adopt reasonable rules regarding the frequency, time, location, notice, and manner of record inspections and copying.
Regardless of the particulars of the state law, though, one thing is certain — associations shouldn’t drag their feet when they receive a record request. “You don’t want to sit on it,” Hirzel says.
With the strict statutory timelines, Stivelman advises associations to develop a procedure for handling the requests: “For example, owners should be directed to submit requests to an email address that the manager regularly checks so it doesn’t slip through the cracks.”
Associations and managers need to understand the limits of their responsibilities, though. “You’ll avoid a lot of problems by being transparent and reasonable, but you have to make sure owners aren’t abusing the process,” Hirzel says.
For example, Stivelman says many owners don’t understand what constitutes a “record” under the law. “If an owner asks for a list of all the units that have a received a specific violation, and the list doesn’t already exist, the association doesn’t have to create it.”
What about owners who make repeated requests? “If you get a serial requester,” Hirzel says, “you want to get a lawyer involved to make sure everything is documented.”