Record retention is a tricky subject. Keep too much or for too long and opposing counsel in litigation will have all the documents they may need to prove that your association’s actions were discriminatory or amounted to selective enforcement, at least compared to its old records. Keep to little or for too short of time and in your deposition or trial testimony you will be forced to admit that records that should have been kept were “not kept in the course of regularly conducted business-activity.” Judges do not look kindly on that answer. There are many other pitfalls as well, including some basic misconceptions:
- Electronic storage is cheap, so let’s just store everything. This is a BAD idea. It simply means that you get to pay about three times as much when an issue arises, as it will require you to go through more data, then potentially have your attorney review the data, and finally potentially produce the data that you kept to the other side, when you could have legally and properly destroyed the data years ago. I know some of you are thinking – “I’ll just destroy it when the issue arises, which will save our association the document management costs.” Sorry that won’t work. Once the issue arises, you have a duty to preserve the evidence, and experienced lawyers will also send out preservation of evidence letters. Destroying it at that time, could result in contempt of court, resulting in even more costs to your association;
- Technology makes us more efficient. Although this can be true, storing too much data can result in the opposite result because it makes finding what you actually want more difficult, it makes locating the information less efficient, and because of the volume of information and the inefficient way it is stored, you may miss relevant items;
- If we all keep what we use, we will have what we need. The truth is that if everyone keeps their stuff, you will end up with multiple copies of various items, including drafts that appear to be final documents, and some documents will not be saved by anyone. The key is to make someone from your association responsible for storing only relevant data for a relevant time period. Everyone wants to put this job on the secretary for the association, but it might be best to simply have an information officer, whose sole role is to accumulate the data and store it for the required time period.
Have an information officer who implements a document retention system. Properly administered, it limits the amount of data that your association maintains, thereby lowering storage and transition costs, promoting the organization of the data itself, and makes litigation more manageable and less expensive. Your attorney should be able to help your association draft and implement a reasonable and useful document retention policy. A good document retention policy, depending on the size and needs of your association, may include:
- A requirement of directors and officers to meet certain record keeping obligations and to document those efforts.
- An obligation to forward all relevant information to the information officer to maintain for the required retention period.
- A requirement to discard sensitive information, like medical information, as soon as it is no longer required.
- A procedure for saving or discarding emails and a categorization of which documents to save and which to discard.
- A structure that facilitates quick searching for relevant records.
- A check of electronic security rules and procedures that protect retained records.
The workload to maintain an effective document retention system is manageable when saved records are limited only to those necessary to keep. Download our Condominium & HOA Record Retention Schedule for a brief schedule of some of the more common documents and a proposed recommended retention period.
**This blog was originally published in the Community Associations Institute-Wisconsin’s Community Leader Magazine Volume XIX, Issue 1-Spring 2020*