Attorney General's Opinion 1981-82 #429
VIRGINIA FREEDOM OF INFORMATION ACT. DOES NOT APPLY TO HOMEOWNERS' ASSOCIATION NOT SUPPORTED WHOLLY OR PRINCIPALLY BY PUBLIC FUNDS.
February 5, 1982
The Honorable Harry J. Parrish
Member, House of Delegates
81-82 429
This is in reply to your letter of January 27, 1982, requesting an Opinion as to whether members of a nonstock homeowners' association have a right of access to books, records and correspondence of the association. Your inquiry suggests that the Virginia Freedom of Information Act and the Virginia Nonstock Corporation Act may require such disclosure.
Under the Virginia Freedom of Information Act (§§2.1-340 through 2.1-346.1 of the Code of Virginia (1950), as amended), only official records of a public body are required to be open for public inspection. Because the homeowners' association does not qualify as a public body, i.e., it is not `supported wholly or principally by public funds," §§2.1-341 (a) and 2.1-341 (e) its records and books need not be made available to the public pursuant to the Virginia Freedom of Information Act.
Section 13.1-228 of the Virginia Nonstock Corporation Act (§§13.1-201 through 13.1-296) provides that "[a]ll books and records of a corporation may be inspected by any member, or his agent or attorney, for any proper purpose at any reasonable time...." While it is clear that "all books and records" must be available under certain circumstances, two issues remain: (1) is the correspondence that is being sought part of the books and records of the association, and (2) what is a proper purpose for seeking such disclosure?
The requirement that the corporation "keep correct and complete books and records of account and shall keep minutes of the proceedings of its members, board of directors and committees having any of the authority of the board of directors..." relates to official documents necessary to the functioning of this corporation. Correspondence, as such, is not included and would not fall within the designation of "books and records of account" or "minutes" of proceedings. Thus, disclosure of correspondence cannot be compelled under the Virginia Nonstock Corporation Act.
The issue regarding a proper purpose for requesting and being granted inspection privileges of appropriate records etc., has been addressed by the Supreme Court of Virginia in Bank of Giles County v. Mason, 199 Va. 176, 98 S.E.2d 905 (1957). The court held that while a stockholder is entitled to inspect corporate books and records at a proper time and place and for a proper purpose, this right is not absolute and uncontrolled but must be exercised in good faith and for some reasonable purpose germane to his interest as a stockholder. The court further stated that the purpose of the stockholder must be to protect "his rights as an owner of stock, and that to grant the relief will not adversely affect the interests of the corporation.
Bank of Giles County v. Mason, supra, at 181 While the case addresses the disclosure requirements of a stock corporation, the interests of a member of a nonstock corporation and the language of the disclosure statutes for stock and nonstock corporations are so similar as to make the holding in Bank of Giles County v. Mason, supra, relevant to a nonstock corporation. Therefore a member of a nonstock corporation must be able to show that the purpose for which he seeks inspection of the records is areasonable purpose and germane to his interest as a member of the corporation, Otherwise, no such inspection need be granted.
I am, therefore, of the opinion that the association's books and records need not be made available under the Virginia Freedom of Information Act, but, depending on the purpose of the inspection, they may have to be made available under the Virginia Nonstock Corporation Act.
