Governance of a condominium, townhome, or homeowners’ association requires a great deal of documentation. Budgets, meeting minutes, owner information, voting records, and insurance policies represent a small sample of the records that a board of directors must maintain and archive. Moreover, factors such as board turnover, unit owner issues, and liability highlight the importance of drafting and adhering to a record retention policy.
The Illinois Condominium Property Act (ICPA), the Illinois Common Interest Community Association (CICA) Act, and the Illinois General Not-for-Profit Corporation Act each mandate that certain records be maintained by an association. However, these statutes differ slightly, in part, with respect to the length of time that certain records must be kept.
The following five categories outline how long certain documents must be retained by the Association:
Documents that must be retained for at least twelve (12) months
- Ballots and proxies related to ballots matters voted on by the members of the association including, but not limited to, the election of members of the board of managers
Documents that must be retained for at least seven (7) years
- Minutes of all meetings of the association and the board of managers.
Note: an association which is not subject to the Illinois Condominium Property Act (ICPA) or the Illinois Common Interest Community Association Act (CICA) must maintain these records permanently.
Documents that must be retained for at least ten (10) years
- Books and records of the association, including, but not limited to, itemized and detailed records of all receipts, expenditures, and accounts
Note: a non-condominium association must maintain these records permanently, and the records should be in chronological order, specifying and itemizing the maintenance and repair expenses of the common areas and any other expenses incurred.
Documents that must be retained permanently
- Declaration and By-Laws
- Rules and Regulations
- Plats of Survey
- All amendments to the Declaration, By-Laws, Rules, or Plats
- Articles of Incorporation, and any amendments thereto
- Annual Reports filed with the Secretary of State
- Litigation records and/or files
- Tax returns
- Contracts, leases, or other agreements entered into by the board (for Associations subject to the Illinois Common Interest Community Association Act only).
Documents that must be maintained until they change, or are no longer relevant
- Contracts, leases, or other agreements entered into by the board (for Associations subject to the Illinois Condominium Property Act only)
- A current listing of the names, addresses, email addresses, telephone numbers, and weighted vote of all members entitled to vote
- Current policies of insurance of the association
Document Retention Policy
A well-drafted document retention policy assists with association operations and record keeping organization. It exhibits transparency and allows board members to be prepared in the event of owner issues, litigation, fines, discovery, and local government requirements. A policy can also address the following important factors.
The community’s governing documents (declaration, bylaws, rules and regulations) explain the association’s obligations including assessments, insurance, maintenance, and elections. If the governing documents are inconsistent with current laws, it can cause confusion and lead to legal, managerial, and day-to-day operational issues. Proactively reviewing documents with legal counsel on a regular, established basis ensures the association has correct, up-to-date information.
As many associations are moving towards a paperless environment, defined electronic storage polices are critical. This is particularly important in association documents that have personally identifiable information and protected community business. Accordingly, electronic documents should be stored on computers that have the most recent security updates. Further, board members should safeguard login details, utilize strong passwords, and protect password confidentiality.
Board members should also take measures, as they deem necessary, to properly dispose association records that are beyond their retention period. This could involve an annual records review to identify documents that should be stored or destroyed.
Utilizing shredding or incineration services to securely destroy documents protects confidential business information and complies with privacy laws. Associations should also log the date any documents were destroyed.
If your association needs assistance in reviewing or establishing a records retention policy, do not hesitate to contact our law firm. Since 1985, KSN has been a legal resource for community associations throughout the Chicagoland area. We have multiple offices including downtown Chicago, Mundelein, and Naperville. Call 855-537-0500 or visit www.ksnlaw.com to get started.
This article is made available by the lawyer or law firm publisher for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By reading this article you understand that there is no attorney client relationship between you and the article author. This article should not be used as a substitute for competent legal advice from a licensed professional attorney in your state. © 2019 Kovitz Shifrin Nesbit, A Professional Corporation.