In any civil litigation, the parties are entitled to make their adversaries produce documents upon request, and this can be a huge undertaking for a Condominium or Homeowners Association of any significant size. Your files, and your managing agent’s files, may contain a great deal more than meeting minutes. There are contracts with vendors, your Public Offering Statement, Bylaws, Master Deed, insurance policies (sometimes going back many years), correspondence with members, your attorneys, accountants and consultants. There are lots of bills, vendor bills, utility bills, legal bills, cancelled checks, ledgers, budgets, forecasts. Also, the definition of “documents” includes electronic documents, meaning emails, instant messages, and other forms of written communication. In short, there are probably thousands upon thousands of documents you are saving, and all of these will likely need to be numbered, copied and produced in a litigation. Think about your document retention policy, and try to imagine the expense of dealing with all of this paper. Try to think if it is useful to you. Is it potentially harmful to you?
In New Jersey, as in most states, certain types of documents are subject to privileges, meaning that they need not be produced in litigation, even if they are requested. Generally speaking, any documents that are confidential communications (letters, emails, etc.) between the Association and its attorneys is subject to the Attorney-Client privilege, and should not be disclosed. Of course that privilege is waived if the documents are not kept confidential. If the Board shares a letter from its attorney with a vendor, or the builder, or a municipal official, the privilege is lost. Be careful with these documents. Another privilege which you should be aware of is the Work-Product privilege. This covers documents created by a party or a party’s attorney or agent, which are prepared in anticipation of (and during) litigation. Your attorneys will act appropriately to protect their own work product. It is up to the Association to protect its work product. We recommend that, as soon as the Association reasonably anticipates that litigation may occur, all documents that contain discussions of the transition process, negotiations with the builder and otherwise should be kept separate from the Associations regular files. The Association should be careful who sees these documents. You should consider labeling such documents as “Confidential: Work-Product Privileged”. You may also want to send carbon copies of everything to your attorneys, in order to bring the documents under the Attorney Client Privilege as well. We can give you more specific advice on how to protect your privileged documents, and how to minimize the burden of dealing with all of your documents if and when you get into litigation with your builder.