Q&A: A Right to Inspect Books and Records

Q&A: A Right to Inspect Books and Records

For the past few years, the condominium board and management has denied me the right under our bylaws to audit and inspect the books of the condominium. What action, if any, can I take?

—Concerned in Chelsea

“Both New York law and usually, a condominium’s bylaws grant unit owners the right to inspect a condominium’s books and records,” explains attorney David Berkey of the Manhattan-based law firm of Gallet Dreyer & Berkey LLP.

“The statutory right is found in Real Property Law § 339-w, which states: “The manager or board of managers, as the case may be, shall keep detailed, accurate records, in chronological order, of the receipts and expenditures arising from the operation of the property. Such records and the vouchers authorizing the payments shall be available for examination by the unit owners at convenient hours of weekdays. A written report summarizing such receipts and expenditures shall be provided by the board of managers to all unit owners at least once annually.” The bylaws may grant greater rights, such as the right to review the condominium’s insurance policies, but the specific language of the by-laws will govern any additional documents that are subject to unit owner review.

“The unit owner is entitled to make notes concerning the documents that are reviewed, but the statute does not require that copies of documents be provided to the unit owner. Some managing agents and boards will permit the unit owner to make copies of relevant documents, upon request, provided the unit owner pays the copying expense.

“The unit owner seeking inspection should write to the managing agent or board, citing the statute, and request an appointment to review the condominium’s records and vouchers of receipts and expenditures. If the manager or board fails to honor the request, the unit owner can commence an action in the Supreme Court seeking an order compelling the managing agent and board to produce the records for inspection. Some courts will require the unit owner to show that the request to review such records and documents is made for a proper purpose, such as to confirm that expenses are only being paid for goods and services received by the condominium.

“If the condominium documents provide for arbitration of all disputes between unit owners and the condominium, the unit owner should consider filing a demand for arbitration in which the relief requested is an award from the arbitrators compelling the condominium to permit the inspection sought by the unit owner. Arbitration awards, if not voluntarily complied with by the condominium or managing agent, may have to be enforced in a special court proceeding. Before commencing a lawsuit or arbitration, the condominium bylaws should be carefully reviewed to determine if they require the losing party in the suit or arbitration to pay the attorneys’ fees of the prevailing party. This potential expense should be weighed before a suit or arbitration is commenced.”

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