Record Retention: What HOAs Must Keep and for How Long

Record retention is one of those compliance areas that seems simple until you're standing in front of a judge who asks for a document from three years ago that no one can find.

Why Retention Matters

HOAs are legally required to maintain certain records for specific periods. Failure to produce requested documents can result in:

• Statutory penalties per day of non-compliance.
• Adverse inferences in litigation — the court assumes the missing document was unfavorable.
• Loss of insurance coverage if D&O policy conditions aren't met.

What to Keep and for How Long

While retention requirements vary by state, here's a general framework:

• Governing documents (CC&Rs, bylaws, rules): Permanently.
• Meeting minutes: Permanently (or 7+ years minimum).
• Financial records (ledgers, invoices, budgets): 7 years.
• Tax returns: 7 years.
• Insurance policies: Life of policy plus 7 years.
• Contracts: Life of contract plus 7 years.
• Violation records: 7 years.
• Homeowner correspondence: 3-7 years depending on state.
• Board resolutions: Permanently.
• Reserve studies: Permanently.

Common Mistakes

• Keeping everything forever — creates storage costs and makes relevant documents impossible to find.
• Tossing records too early — destroying documents that are subject to a litigation hold is itself a legal violation.
• No retention policy — without a written policy, retention decisions are ad hoc and indefensible.
• Storing records in one person's email — when they leave, the records leave with them.

Building a Retention Policy

1. Identify all document types your HOA produces or receives.
2. Assign a retention period to each based on state law and best practices.
3. Set a destruction schedule — review and dispose of documents past their retention period.
4. Implement a litigation hold procedure — when litigation is anticipated, suspend destruction.