Is there a limit how much we can charge to pull, provide and copy requested paperwork? Can we make a profit?

IC 32-25.5-3-3(m) provides that an Association cannot charge a search fee for the first hour spent searching for records and after the first hour can only charge the actual pay rate of the person searching (maximum $35 per hours) up to a total of $200. You cannot make a profit on the search.
The statute doesn’t specifically provide for copying costs, but we have generally used the government public records standard of charging actual copying costs, which allows approximately $0.10 per page.  Again this is not designed to be a profit making venture.   It is only designed to cover the actual costs of producing the records.
Thrasher Buschmann & Voelkel PC
Stephen Buschmann
151 N. Delaware St.
Suite 1900
Indianapolis IN 46204-2505
(317) 686-4773

My response to this is, an Association should only charge owners the actual reasonable cost of copying records requested by owners, i.e., the actual cost to the Association of producing those copies.  It should not be seen as a way for the Association to raise funds.  First, community associations are generally non-profit corporations.  Their purposes is to provide needed services to owners – not to generate profits.  Second, charging more than reasonable copying costs will almost always cause owners to be upset and distrustful toward the Board and/or its property management.  If the Association is running short on revenue, then a serious review of the level of the annual assessment may be called for.  But charging excessive fees for copying of documents and records (as well as fees and fines) will nearly always cause more problems than it solves.
Sean A. O’Connor, Esq.
Finkel Law Firm LLC
4000 Faber Place Drive, Suite 450
North Charleston, South Carolina 29405

In general terms, HOAs are established as non-profit corporations or associations. As such, they are not established to engage in profit making activities. Runnig a for -profit copying business is outside the purposes for which a non-profit corporation is chartered.

An Association ought to be able to recover its actual expenses incurred in “pulling, providing and copying requested paperwork.”  The Michigan Non-Profit Corporation Act provides that a corporation may require that a member desiring to inspect the corporation records may be required to pay a reasonable charge to cover the cost of labor and material for providing copies. This is a relatively new statutory provision and questions have arisen as to how expansive the “cost of labor” may be interpreted. Does the cost of labor include pulling and providing the requested paperwork?  Some Associations have said yes. This question may be answered by the Michigan courts at some time in the near future, but I consider that unlikely. So, we will continue to work with the law that we have until then. We need a much more cost effective means of resolving these every day legal issues than that currently available through our courts.

Edward Zelmanski
Zelmanski, Danner & Fioritto, PLLC
Attorneys at Law
44670 Ann Arbor Road, Suite 170
Plymouth, Michigan 48170
(734) 459-0062    
Fax: (734) 459-5313

In South Carolina, where I practice law, the South Carolina Non-Profit Corporation Act provides that a non-profit corporation can only charge for the actual expense incurred in producing the requested documentation. Therefore, no mark up on the charges incurred may be imposed.

I suspect that the non-profit corporation act in the state where you reside contains a similar statutory provision and advise you to consult an attorney who specializes in the community association law field to provide you with specific guidance.
Nelson Mullins
Patrick O’Dea
BNC Bank Corporate Center, Suite 300
Myrtle Beach SC 29577
(843) 946-5631

The Co-op’s rights depend on the nature of the paperwork being requested. Many Managing Agents do charge fees for performing certain services, like copying an offering plan, filling out a lender questionnaire, or investigating and copying a proprietary lease. Some Co-ops split the fee with the agent, or simply take the fee themselves. However, the Co-op can’t charge for providing the names and addresses of shareholders, for example, or for pulling books and records from current locations in order to allow a shareholder inspection, both of which are statutory rights of the shareholder. Even in that regard, the Co-op can still seek reimbursement for reasonable expenses incurred in making copies, but only similar to any other disbursement.

Kenneth Jacobs
Smith, Buss & Jacobs LLP
733 Yonkers Avenue
Yonkers, NY 10704
914-476-0600 X4102
60 East 42nd Street
46th floor
New York, NY 10165
212-688-2400 X4102

The statute allows a reasonable charge but does not define what that is. First, I note that the statute does not require that any copy be provided, only that owners have access to records. With that said, I believe that a court would look favorably on a small per-page charge (to account for the time to find and copy the page and the paper/ink to copy) or an hourly rate (with the same considerations). An Association should not look at this as a profit center – being hauled in to court on allegations of unreasonable charges for records would cost more than the small profit the Association would hope to make.

Sara A. Austin
Austin Law Firm LLC
226 E. Market St.
York, PA 17403
717.846.2246 phone
717.846.2248 fax