Understanding the Right of Association Members to Review Management Agreements

Common disputes within homeowners associations involve issues regarding the agreements that the association has entered into with a management company or an individual property manager. In dealing with such issues, homeowners will frequently request that the association provide them with a copy of the written management agreement entered into between the association and the management company or individual manager, and quite often the association will refuse to provide the member with a copy of the agreement taking the position that the member is not entitled to review or receive a copy of the management agreement. Whether or not an association member has a right to review and receive a copy of the association’s agreement with a property manager depends on whether the agreement is classified as a “privileged” document or a contract.

Determining whether a management contract is deemed “privileged” requires a review of applicable state statutes and the association’s governing documents. Some state statutes will specifically address the issue, such as in California where the Civil Code defines “association records” to include “executed contracts not otherwise privileged under law.” (Civil Code §5200(a)(4). The Code also provides that for the purpose of member inspections, “contracts for management” are not “privileged contracts.” (Civil Code §5215(a)(5)(D).)  These statutes make it clear that management contracts entered into with independent contractors are not “privileged” and are subject to inspection by the members of the association.