Condo Media - April 2013 - 54

LEGAL
topics; abusive unit owners; ego; ignorance; sensitive topics; and a perceived
need to protect privacy. Regardless of
the reason for withholding association-related information, this course
of action produces predictable results
including: breakdowns in communication; an “us versus them” mentality;
conditions ripe for misconduct such
as embezzlement; conspiracy theories

issues; and the education of board members for a greater understanding of the
fiduciary role and obligations.
The discussion also included reference to the benefits associated with
transparency beyond the mere avoidance of negative consequences that
result from secrecy.
For example, information sharing
between associations or members of

There are societal, legislative, and courtroom trends
all moving toward the increased accessibility of records to unit owners. Associations would be wise to
utilize techniques for increasing transparency.
among owners; and governmental
intervention by way of legislation.
A review of common law relative
to transparency issues revealed that,
in case after case, courts across the
country are trending toward decisions
favoring the release of information
and association records to unit owners. Indeed, one seminar attendee was
a unit owner. He announced to the
room that he had successfully sued his
association for production of records
and, in addition to the records, was
awarded some $25,000 in legal fees
for his own efforts.
A review of statutory law revealed
that while some states require unit
owners to assert a proper purpose
for obtaining association records, the
trend is away from such requirements.
Additional legislative trends include
limiting the purposes for which boards
can meet in executive session and the
passage of “open meeting” type laws.
Attendees learned of various techniques for increasing transparency of
association boards. Such techniques
include: use of parliamentary procedure
at meetings; frequent communication;
use of experts to perform and explain
applicable tasks; varied methods of communication for reaching the community;
adoption and communication of policies
for consistent handling of association
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Condo Media • April 2013

an association can lead to bargaining
benefits such as economies of scale or
reliable referrals for trusted vendors.
Transparency can also produce collaboration between board members
and owners, such as with the development of committees within an association. Transparency can also increase
the accountability of both board
members and unit owners relative to
the responsibilities all parties have for
the association and its affairs. In the
unfortunate event of a claim or allegation lodged against the association,
transparency can contribute to the information and records available for the
association to use in its own defense.
Bottom Line: There are societal,
legislative, and courtroom trends all
moving toward the increased accessibility of association information and
records to unit owners. Associations
would be wise to utilize techniques for
increasing transparency and may even
reap some rewards from doing so.

The Constitutional
Conundrum

This seminar explored the developing
body of law resulting from the question
of whether or not Federal and/or State
Constitutions are applicable in associations. The issue is one of concern for

various reasons. First, the U.S. population is trending toward community
living. In the 1970s, approximately 10
percent of the U.S. population lived
in community settings. By the 2000s,
this number reached 20 percent. Based
on this trajectory, in the foreseeable
future it could be the case that 50
percent of the U.S. population will live
in community associations. In addition, associations sometimes carry out
what would otherwise be governmental
functions. However, the application of
constitutional principles could restrict
associations’ authority.
A review of notable cases revealed
that the question of the application
of Federal and State Constitutions
has repeatedly arisen with respect to
issues of freedom of speech, freedom
of religion, impairment of contract,
and fair housing. Although decisions have varied and some involve
complex, multi-factor tests, trends
have been toward recognizing some
form of freedom of speech rights
within associations. In addition,
most courts find that exertion of
association authority does not impair
contracts relative to individual unit
owners. In other words, associations
can continue to establish policies regarding items like solar panels, satellite dishes, etc., within the bounds of
the law. Associations have also been
held to be subject to fair housing
principles. As such, there can be no
discrimination on the basis of race,
color, religion, sex, familial status, or
national origin.
Bottom Line: As more of our population settles into community-living settings and as our associations take on
“governmental” type duties, there will
be increasing occasions on which the
question of the application of constitutional principles within associations
arises. Although this body of law is
still very much in development, trends
indicate that at least some of the more
basic and fundamental constitutional
rights may be held to exist within
community associations.

Condo Media - April 2013

Table of Contents for the Digital Edition of Condo Media - April 2013