How Long Should An Association Retain Its Records?

It is in the best interests of every Association to have an official records retention policy. A well-written and well-implemented policy can help protect the Association in the event that a dispute arises. But how long do you really need to keep your records? Unfortunately, there is no easy answer. It really depends on what kinds of records you are talking about. Some records may be destroyed after a set number of years, while others should be retained forever.

Here is a brief overview of Association records that should be kept and the relevant time-frame for each:

Accounting Records

7 years:

Accounts payable

Accounts receivable

Expense records

Inventory records

Loan payment schedules

Permanent: Audit Reports

Chart of accounts

Depreciation schedules

Annual Financials

Fixed asset purchases

General ledger

Tax returns

Bank Records

2 years:

Bank reconciliations

7 years:

Bank statements

Cancelled Checks

Electronic payment records

Corporate Records

7 years: Bids/Proposals (minor)

Permanent: Board minutes

Bylaws, Articles

Master Deed

Board Resolutions

Business licenses

Contracts (major)

Insurance policies

Leases/Mortgages

Patents/Trademarks

Bids/Proposals (major)

Unit owner records

Other: Contracts (minor)

Life of the contract

+ 6 years

Employee Records

7 years:

Ex-employee files

Employment taxes

Payroll records

Permanent:

Benefit plans

Pension plans

Profit sharing Plans

Other: Applications

Life of employment

+ 3 years

Real Property Records

Permanent:

Construction records

Leasehold improvements

Real estate purchases

Other:

Lease payment records

Life of lease+ 6 years

In addition to identifying which records the Association must retain and for how long, there are a number of other factors that your Association may wish to address in its record retention policy. For example, you may want to designate where the records will be maintained and in what format.

Will you keep originals of all of your records? Or will you maintain them in electronic format?

Additionally, you may want to delineate precisely how records will be destroyed once they no longer need to be retained. Addressing such issues upfront will help to combat any allegations of impropriety down the line.

The recommendations made herein are meant to serve as a general guide to records retention and should not be considered comprehensive. If you would like help drafting a more complete policy, please contact our office.

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