A man in White Bear Lake is worried about his townhouse association. He told Whistleblower that the association board has stymied his efforts to find out more about where the money's going.
I mistakenly assumed that homeowner associations, being not-for-profit, had to file the same publicly-available tax forms that charities do. I learned that HOA dues are not tax-deductible, so the tax forms those organizations file aren't public records. But state laws recognize that members of these groups need to know where their money is going.
Condo and townhouse owners should know that state law requires their associations to make financial records available. The board's secretary is the legal custodian of the records, but the management company typically has possession of the records, said Matthew Drewes, an attorney at Thomsen Nybeck in Bloomington.
The Minnesota Common Interest Ownership Act says the "records shall be made reasonably available for examination by any unit owner or the unit owner's authorized agent..." The right of members to organization records is also enshrined in the law governing non-profit organizations.
Still, Evan McKenzie, a law professor at the University of Illinois at Chicago and an attorney who represents people fighting their homeowner associations, said the organizations usually make it difficult for members to obtain records. He said that given the shaky condition of so many associations, it has never been more important for homeowners to exercise their rights to know.
"This is critical for owners to be able to find out the financial status of their association before catastrophe occurs," he said.
How open is your condo association or HOA with its finances?
