A condominium association's obligation to maintain records and allow a unit owner to inspect and copy those records; financial audits of condominium association records; access by condominium unit owners to records of an entity controlled by an association; and organizing a condominium association as a for-profit corporation

1. Minutes of meetings of the association and of the board of directors of the association.

2. Records of actions taken without a meeting by the condominium unit owners on behalf of the association or by the board of directors of the association.

3. Certain disclosure documents that the association is required under current law to furnish to a seller of a condominium unit for the seller to provide to a prospective purchaser of the unit.

4. Detailed, accurate records of the receipts and expenditures affecting the common elements of the condominium.

5. Annual budgets prepared by the association.

6. Financial statements.

7. Bank statements and account statements, including statements for reserve accounts.

8. Income and expense statements.

9. Insurance policies.

10. The most recent audit of the association's financial records, if any.

11. Contracts entered into by the association and any bids for those contracts.

12. Invoices and expense records.

The bill also provides that a unit owner may, with certain exceptions, inspect and copy any association records created within the past six years. The association may impose a reasonable charge for copies of any association records, including the costs of labor and materials used to provide the copies, but may not charge an amount that exceeds the estimated cost of production or reproduction of the copies or $50, whichever is less.

Under the bill, an association for a condominium with 100 or more units (large association) must maintain an Internet site on which the large association posts current copies of association records that are subject to inspection and copying by unit owners. The Internet site must include a protected electronic location that is inaccessible to the general public and accessible only to unit owners and employees of the large association. The bill provides that, upon a unit owner's written request, the large association must provide the unit owner with a username and password and access to the protected sections of the large association's Internet site.

Financial audits of association records The bill provides that, beginning one year after the expiration of declarant control of a condominium association, a majority of condominium unit owners may request that the association arrange for an independent audit of the association's financial records at the association's expense. Under the bill, if unit owners request an audit within 36 months after the completion of a previous audit, the requesting unit owners must pay the cost of the audit. Current law provides a similar mechanism for unit owners to request an audit of an association's financial records during the period of declarant control and for one year thereafter. Under the current law provision, the lesser of three unit owners or the owners of 10 percent of the units may request an audit.

Access to records of entity controlled by association Finally, the bill provides that, if a condominium association controls an entity, a condominium unit owner may inspect and copy records of the entity to the same extent that the association may inspect and copy those records. Under the bill, “control” means to directly or indirectly 1) own more than 50 percent of the ownership interest of the entity; 2) have a controlling interest in the entity; or 3) have the power to direct or cause the direction of the management or policies of the entity.

Organization of association entity The bill provides that, after the effective date of the bill, a condominium association may not organize or reorganize as a for-profit corporation. Current law provides that the declarant of a condominium must establish an association to govern the condominium and that the association must be organized as a profit or nonprofit corporation or as an unincorporated association.