Association Electronic Records – Making Technology Work for your Community Association

We often receive questions from our association clients regarding record retention obligations.  In the past, we’ve discussed the requirements imposed by the Planned Community Statutes, the Condominium Act and the Nonprofit Corporations Act in the context of retaining governing documents, meeting minutes, ballots, accounting records, and the like.  We have also briefly touched upon retention of miscellaneous records, including lot file information of former owners, election materials, etc. that are not expressly covered by these statutes. As to those items, we have suggested that every association should consider adopting a document retention policy as a means of regulating what information and records are retained, how the records are stored (e.g. paper files, electronically stored, etc.), the location of these records, and the length of time that they will be retained by the association. This type of policy would allow records to be destroyed according to the written policy at the appropriate time.

So, once an association knows what records it has to keep, and how long to keep each type of record, how should an association store the information?  The days of paper folders and filing cabinets are no more.  Technology has allowed many associations and management companies to move toward a paperless existence.  However, the electronic storage of records and information can bring with it a new set of questions and complications for associations. 

For example, based on Arizona case law, a record maintained in an electronic format includes the “metadata” embedded as part of the electronic record.  Metadata is information that describes the history and administration of an electronic document.  Electronic documents could include pdfs, Word documents, e-mails, web pages, etc. Examples of the metadata embedded in these types of electronic documents include the file designations or file names, create and edit dates, authorship, comments, and edit history. This matters to community associations because in the event of litigation, this “metadata” can be subject to disclosure along with the paper-versions of the records themselves.

In the community association context, a sophisticated owner might decide to request the metadata embedded in his or her lot file, or even the metadata embedded within an association’s financial records. Based on a 2009 Arizona Supreme Court case, Lake v. City of Phoenix, 222 Ariz. 547, 218 P.3d 1004 (2009), the homeowner could make a legitimate argument that the metadata is part of the association’s “records,” at least as to any records that are maintained in an electronic format. Lake v. City of Phoenix would indicate that the metadata for those association records may be subject to disclosure along with the paper-versions of the association records themselves.

Thus, while technology can speed up association business, facilitate communication between board members and/or homeowners, and assist in many associations’ efforts to be environmentally conscious, a craftily worded discovery request or even a system failure could cause association operations to come to a grinding halt.  Needless to say, a demand for all metadata imbedded in an association’s electronically stored records could create quite a headache for an association, both from a practical and financial perspective. 

Keeping this in mind, then, there are a few practical tips that all associations should consider when opting to incorporate technology into their everyday practices.  First, if there are any concerns about metadata and certain types of records, do not store those records electronically.  Store them in paper form only.  Second, we frequently recommend that board members maintain separate email addresses from their personal emails.  This allows board members to keep association-related communications separate from their personal communications, and greatly reduces the risk of a board member’s personal computer and/or email account being subject to disclosure in the event of a lawsuit.   Finally, as a general reminder, be aware that electronic records are still “records” of the Association, and should be treated as such both from a document retention perspective and in the event of an owner’s records request. Incorporating these tips into an association’s practice will help to ensure that the use of technology by any particular association is beneficial rather than burdensome. 

For more information about record retention contact attorney Kellie Callahan or any attorney in the firm