Opinion
Opinion By: Jack Conway, Attorney General; Amye L. Bensenhaver, Assistant Attorney General
Open Records Decision
This matter having been presented to the Office of the Attorney General in an open records appeal, and the Attorney General being sufficiently advised, we find that the Department of Revenue erroneously relied on KRS 131.190(1)(a), incorporated into the Open Records Act by KRS 61.878(1)(l), in denying Kenneth L. Bobzien's April 27, 2011, request for copies of "all available tax records of The Belknap Condominium Association." Because Mr. Bobzien is the owner of record of a condominium in The Belknap, he is a member of the Condominium Association pursuant to KRS 381.9165 1 and Article VI 2 of the Association's Articles of Incorporation, and he or his authorized agent is entitled to examine " [a]ll financial and other records." KRS 381.9197. This specific grant of authority to unit owners/association members to examine financial records of the association, without exception, overrides the general confidentiality provisions codified at KRS 131.190(1)(a). Hughes v. Commonwealth, 875 S.W.2d 99 (Ky. 1994) (holding that the provisions of a statute as it relates to a specific subject controls over enactments of general applicability). Revenue's reliance on KRS 131.190(1)(a) was therefore misplaced, and its denial of Mr. Bobzien's request was legally unsupportable.
In a response dated May 5, 2011, Revenue invoked KRS 131.190, 131.081(15) and 133.047 as the bases for denying Mr. Bobzien's request. Additionally, Revenue cited KRS 61.878(1)(a), (h), and (k) as statutory authorization for denying the requester access to the association's tax records. It was the agency's position that "shareholders of the condominium association, which is organized as a corporation, are not considered to be agents of the corporation . . . 'an entity separate, apart, and distinct' from its shareholders. " Miller v. Paducah Airport Corp., 551 S.W.2d 241 (Ky. 1977). Absent "proper written authorization from the Corporation," Revenue asserted, "shareholders do not have any authority to receive copies of the returns . . . by virtue of their status as shareholders. " In supplemental correspondence directed to the Attorney General after Mr. Bobzien initiated this appeal, Revenue acknowledged the application of the Kentucky Condominium Act, KRS 381.9101 to 381.9207, but reiterated that The Belknap Condominium Association is an entity separate from its owners, that the owners have designated an executive board to govern the Association's affairs, and that "condominium owners not currently on the executive board do not have the authority to receive copies of the tax information returns from the Department of Revenue." We disagree.
This office has frequently deferred to Revenue in its interpretation of KRS 131.190(1)(a) and recognized the nearly impenetrable barrier to access to "information regarding tax schedules, returns, or reports required to be filed with it . . . hav[ing] to do with the affairs of the person's business" that it erects. See, e.g., 11-ORD-062 and authorities cited therein. Resolution of the issue presented in this appeal, however, does not turn on the interpretation of that general confidentiality provision, but on the specific right of access to "all financial and other records" reposed on "any unit owner and his or her authorized agents" by KRS 381.9197.
KRS 381.9197 is found in the Kentucky Condominium Act which took effect in January 2011. One of the aims of that Act was to "strike[] a balance between creating more clarity, transparency, and accountability among the various stakeholders in a condominium project without creating an overly burdensome legislative structure . . . ." Scott W. Brinkman, The Kentucky Condominium Act (pt. 1), 99 KY.L.J. Online 1 (2010); http://Kentuckylawjournal.org/m/PDF/KLJO_201012_Brinkman1.pdf. "This legislation," the author of the referenced article, and legislative sponsor of the Act, comments, "was drafted with the intent and purpose of ensuring thatcondominiums in Kentucky are well-managed by informed unit owners acting through the association and the executive board . . . ." Id. at page 22.
KRS 381.9195(2) requires the association to furnish the unit owner with a certificate, within ten days of the unit owner's request, that contains, inter alia:
. A statement setting forth the amount of the monthly common expense assessment and any unpaid common expense or special assessment currently due and payable from the selling unit owner;
. A statement of any other fees payable by unit owners;
. A statement of any capital expenditures anticipated by the association for the current and, if known, the next 2 fiscal years;
. A statement of the amount of any reserves for capital expenditures, if any, and of any portions of those reserves designated by the association for any specified projects;
. The most recent regularly prepared balance sheet and income and expense statement, if any, of the association;
. The current operating budget of the association;
. A statement of any unsatisfied judgments against the association and the status of any pending suits in which the association is a defendant; and
. A statement describing any insurance coverage provided for the benefit of unit owners[.]
Inasmuch as the tax information maintained by Revenue mirrors information to which the unit owner is statutorily entitled upon request, its argument that the unit owners are shareholders rather than agents of the association, and therefore not entitled to inspect the tax records, is unpersuasive. Revenue's insistence that Mr. Bobzien obtain "written authorization" to inspect and copy the association's tax records abridges his right of access to all financial records codified at KRS 381.9197 and 381.9195(2). Invocation of KRS 131.190(1)(c) to impede Mr. Bobzien's right of access was therefore improper. While this right of access does not extend to open records requesters who are not unit owners, we cannot affirm the Department of Revenue's denial of Mr. Bobzien's open records request on the basis of the general confidentiality provision found at KRS 131.190(1)(a) 3 in light of the specific right of access to association financial records, including tax records, vested in him by separate statutory enactment.
A party aggrieved by this decision may appeal it by initiating action in the appropriate circuit court pursuant to KRS 61.880(5) and KRS 61.882. Pursuant to KRS 61.880(3), the Attorney General should be notified of any action in circuit court, but should not be named as a party in that action or in any subsequent proceeding.
Distributed to:
Kenneth L. BobzienSarah E. PenceGreg A. Jennings
Footnotes
Footnotes
1 KRS 381.9165 provides:
Unless stated otherwise in the declaration, a unit owners' association shall be organized no later than the date the first unit in the condominium is conveyed. The membership of the association shall at all times consist exclusively of all the unit owners or, following termination of the condominium, of all former unit owners entitled to distributions of proceeds under KRS 381.9157, or their heirs, successors, or assigns. The association shall be organized as a for-profit or nonprofit corporation or as an unincorporated association.
2 Article VI provides, in part:
All persons who are owners of record of units in The Belknap shall be members of the corporation, and the membership in the corporation shall be limited to such owners of record of units.
3 The Department of Revenue does not elaborate on its position relative to KRS 131.081(15) and KRS 133.047, granting taxpayers the right of privacy with regard to the information. Nor does it explain how KRS 61.878(1)(a), (h), and (k), the latter two exceptions authorizing nondisclosure of law enforcement records and records made confidential by federal law or regulation, apply to the records in dispute. Whatever privacy rights might attach to the association's tax records as to the public generally have no application to Mr. Bobzien, an association member.