It’s no secret that helping to run a board of directors or board of managers of a co-op or a condo association is quite often a thankless task. There are a lot of issues to take care of, and board members are strictly volunteers. While there might be some unofficial perks for taking the job, one of the core responsibilities that can bog people down is keeping official records. It’s hard enough to produce them, be the ones to read them closely, and make major decisions based on them at board meetings. But, even with the help of a property manager, the storage and guardianship and past records can be confusing and easily overlooked.
Many of us probably don’t put much stock in older records: our receipts from two months ago, or our bills from last year. Individuals more often than not make sure along with their accountant that tax returns are kept somewhere and leave it at that. But, co-ops and condos have quite a bit more to keep track of to keep their noses clean.
“There are all kinds of records that a co-op or condo is going to have. They’ll have corporate records like bylaws, rules and regulations, tax returns, employment records, insurance records, maintenance and service contracts; they’ll have mortgages, alteration agreements. And in a co-op you’ll have purchase applications, shareholder complaints and incident reports—and you’ll have litigation,” says Attorney Andrew P. Brucker, a partner at the law firm of Schechter & Brucker, P.C. in Manhattan.
Figuring out what documents fall under that classification—and what to do with them—can be a cumbersome process. New York State doesn’t have any specific requirements that obligate corporations to retain their documents other than the responsibilities that those records might relate to taxes or lawsuits. “There may be some provisions, but I think notwithstanding what those provisions are, common sense is a more reliable measure of how record retention should be addressed,” says David Brauner, an attorney and counsel at the law firm of Windels Marx Lane & Mittendorf, LLP in Manhattan.
“The most obvious category is tax returns and other tax-relevant records. Generally, the rule of thumb is that you should keep them for about five years after the date of filing of the tax return to which they relate. The statute of limitations for filed tax returns for the IRS to come back at you is three years, but I think it makes sense to add a couple of years as a cushion. Some may tell you seven years; it's really a judgment call,” he says.