Overview

AI has revolutionized how many of us write emails, search for information, take notes, and handle countless other routine tasks, and it isn’t going away. California HOAs and their management companies have adopted it too, using AI tools to record board meetings, generate minutes, draft letters, and handle other routine paperwork. There’s no doubt that those tools save time. But AI makes mistakes, and they can be serious mistakes. AI transcription and summary tools sometimes invent statements, discussions, and decisions that never happened. These hallucinations, as the tech industry calls them, don’t present a problem as long as someone reviews the output and catches them before the HOA approves or distributes it. But when nobody does that, and those errors become part of the HOA’s official record, it creates a very serious problem.

Minutes carry real weight. The Davis-Stirling Act treats them as HOA records that homeowners have the right to inspect, and it requires sellers to give buyers the prior 12 months of board meeting minutes when buyers ask for them. Buyers and lenders read those minutes for signs of litigation, special assessments, and structural problems. In one of the current cases at my law firm, MBK Chapman, an HOA’s AI-generated minutes described a board discussion about hiring a contractor to fix serious structural defects in the HOA’s common area. That discussion never took place. When the buyer received the minutes during the due diligence period and the lender saw them, the lender refused to fund the loan, and the condo project became ineligible for Fannie Mae financing. The homeowner lost the sale over a conversation that never happened regarding structural defects that didn’t exist.

AI also creates privacy problems. Civil Code 5230 bars HOAs and their managing agents from transmitting homeowners’ personal information to third parties without consent unless the law requires it. When HOAs or their management companies upload meeting recordings, violation files, or other records containing homeowners’ personal information to outside AI services, they may violate that statute.

Problems caused by AI-generated HOA records are still emerging, but they’ll grow as more HOAs and management companies turn routine work over to AI tools. This Fact Sheet explains why HOAs remain responsible for the accuracy of minutes and records they prepare with AI, how inaccurate minutes can harm homeowners in sales and other transactions that depend on the HOA’s records, how Civil Code 5230 applies to homeowners’ personal information, and what homeowners can do to catch and correct AI-generated errors before those errors cause damage.

Key Points

The Davis-Stirling Act doesn’t mention AI, but the rules that govern HOA minutes, records, and homeowners’ personal information apply whether a person or an AI tool prepares them. HOA directors still have to exercise care before approving minutes, HOAs still have to provide accurate records to the homeowners and buyers who rely on them, and HOAs and their management companies still can’t share homeowners’ personal information with third parties without consent. As AI takes over more of that work, homeowners have more reason than ever to read their HOA’s records instead of assuming they’re correct.

• While nothing in the Davis-Stirling Act prohibits HOAs from using AI to draft their minutes, HOAs remain responsible for every word those minutes contain. Civil Code 4950 requires HOAs to make board meeting minutes available to homeowners within 30 days of each meeting, and Civil Code 5200 makes those minutes part of the HOA’s official records. The Davis-Stirling Act doesn’t control who has to prepare the first draft, so HOAs can assign that task to a secretary, a manager, or an AI tool. Once HOAs approve the minutes, though, those minutes become the HOA’s official account of what happened at the meeting, no matter who or what wrote them. HOAs can’t avoid responsibility for false minutes by blaming the AI tool or the management company that used it.
  • Approving AI-generated minutes without reading them falls short of the care Corporations Code 7231 requires of HOA directors. Corporations Code 7231 requires HOA directors to act in good faith, in what they believe is the HOA’s best interest, and with the care, including reasonable inquiry, that an ordinarily prudent person would use. It lets directors rely on reports prepared by officers, employees, and professionals they reasonably believe are competent, but only when the directors act in good faith and have no reason to doubt what’s in front of them. When directors vote to approve minutes they never read, whether a person or an AI tool drafted them, they haven’t made any inquiry at all. Having attended the meeting the minutes describe, directors are in the best position to determine their accuracy. Because Corporations Code 7231 sets the standard of care at the heart of every HOA director’s fiduciary duty, approving minutes without reading them breaches that duty. [To learn more about a director’s fiduciary duty to the HOA, read my Fact Sheet, “California HOAs and Fiduciary Duty: What It Means and Why It Matters.”]
• Minutes are official HOA records that homeowners, buyers, and lenders rely on. Civil Code 5200 includes board meeting minutes among the HOA records homeowners have the right to inspect and copy. Some HOA records only have to remain available for the current fiscal year and the two fiscal years before it, but Civil Code 5210 keeps minutes open to inspection permanently. Homeowners use minutes to track their HOA’s decisions about assessments, repairs, litigation, and rule changes. When homeowners sell, Civil Code 4525 requires them to give buyers who ask for them the approved minutes of every open board meeting the HOA held over the previous 12 months. Buyers and lenders then use those minutes to judge a community’s condition and finances before committing to a purchase or a loan.  [To learn more about the HOA documents sellers have to provide buyers, and what HOAs can charge for them, read my Fact Sheet, “Why Is My California HOA Charging So Much for Documents When I Sell?”]
• Minutes that describe discussions or decisions that never happened can derail a homeowner’s sale. Many underwriters read an HOA’s minutes for references to structural defects, major repairs, litigation, and special assessments because those issues affect whether they’ll finance units in the community. When AI-generated minutes describe a discussion about structural defects that never took place, the lender has no way of knowing that the discussion is fictional. Such false minutes can, as has occurred in our client’s case, not only result in a lost sale, but even lead to a delisting of the community by Fannie Mae and Freddie Mac. That loss of eligibility affects every owner in the project who wants to sell or refinance, not just the seller whose escrow fell apart. Correcting the minutes also takes time. Civil Code 4910 bars HOAs from taking action outside a board meeting, so even an HOA willing to fix false minutes has to put the correction on an agenda and approve it at a noticed meeting while the buyer’s due diligence deadline keeps running. [To learn more about what happens when Fannie Mae flags a condo project as unavailable, read my Fact Sheet, “California Condo Declared “Unavailable” by Fannie Mae and How HOAs Can Fix the Problem.”]
• Feeding homeowners’ personal information into outside AI tools may violate Civil Code 5230. Civil Code 5230 prohibits HOAs and their managing agents from transmitting homeowners’ personal information to third parties without the homeowners’ consent unless the law requires it. Many AI transcription and drafting tools work by sending recordings and documents to the AI company’s own servers, and board meeting recordings, violation files, and other HOA records routinely contain homeowners’ names, addresses, and other personal details. No court has decided whether uploading that material to an AI service counts as transmitting it to a third party, and the statute doesn’t define “personal information,” so the question remains open. If an HOA or management company does violate Civil Code 5230, the affected homeowners can sue for an injunction and their actual damages, and they can recover their reasonable attorney’s fees if they win.
• As more HOAs turn to AI to prepare their minutes, and the damage from unchecked errors grows, homeowners should read those minutes instead of assuming that they’re accurate. Civil Code 4950 requires HOAs to make the minutes of each open board meeting, a draft marked as such, or a summary available to homeowners within 30 days of the meeting. The HOA’s mandatory annual policy statement has to tell homeowners how and where to get them. You don’t need to attend a meeting to spot problems in its minutes. Compare the minutes with the agenda the HOA sent out before the meeting. Civil Code 4930 generally bars HOAs from discussing or acting on items that weren’t on the agenda, so a discussion or decision in the minutes that the agenda never mentioned is a red flag, especially when it involves structural defects, litigation, or special assessments. [To learn more about the mandatory annual disclosures that your HOA is required to provide you, read my Fact Sheet, “What Documents Does My California HOA Have to Send Me Every Year?”]
  • Homeowners planning to sell should review the prior year’s minutes before a buyer does. The minutes buyers can request under Civil Code 4525 are the same minutes sellers can get from their HOAs today, so sellers have no reason to see them for the first time during escrow. Before listing their homes, homeowners should request the past 12 months of approved minutes and read every entry a buyer or lender could take as a sign of structural problems, litigation, or financial trouble. Starting before the listing gives the HOA time to correct any false entries before a buyer ever sees them.
  • Homeowners who find errors should demand corrections in writing, whether the HOA has approved the minutes yet or not. HOAs typically approve each meeting’s minutes at the next board meeting, and Civil Code 4950 lets HOAs circulate draft minutes in the meantime, which gives homeowners a window to catch errors before the minutes become official. Errors in approved minutes still need correcting, though, and those are the errors sellers are most likely to find. A correction request should identify the specific entry, explain what happened at the meeting instead, and ask the HOA to fix the minutes. When the HOA has already approved them, the request should ask the HOA to put the correction on the agenda for its next board meeting because Civil Code 4930 bars the HOA from acting on items that aren’t on the agenda.
• If your HOA’s AI-generated minutes or records have resulted in errors that the HOA hasn’t corrected, call the HOA attorneys at MBK Chapman. Whether false minutes cost you a sale, your HOA refuses to correct entries describing events that never happened, or your HOA or its management company shared your personal information with an outside AI service, the HOA attorneys at MBK Chapman know how to use the Davis-Stirling Act and the Corporations Code to force your HOA to correct its records and answer for the harm it caused. Contact MBK Chapman today.

AI is here to stay, and as more HOAs use it to handle routine paperwork (much of which it will do well), the damage caused by unchecked hallucinations will grow too. The Davis-Stirling Act and the Corporations Code don’t distinguish between minutes a person drafts and minutes an AI tool drafts. They ask only whether HOA directors exercised care before approving them and whether the records HOAs keep and share are accurate. When directors skip that review, homeowners pay for it in lost sales, damaged property values, and exposed personal information. Until HOAs build real review into their use of AI, homeowners will have to check the records themselves.

FAQs

About Michael Kushner

Michael Kushner is a California attorney with over 30 years of experience representing homeowners in disputes with their HOAs. He is widely regarded as California’s leading homeowner-side HOA attorney, and has built one of the state’s most prominent law practices dedicated to holding HOAs accountable under the Davis-Stirling Act and California law.

In addition to his law firm’s work, Michael is a recognized lecturer, author, and the host of the hit HOA HELL podcast, where he provides homeowners living in HOA-governed communities with clear, practical strategies for dealing with bad HOAs. He’s also the author of the best-selling book, HOA HELL | California Homeowners’ Definitive Guide to Beating Bad HOAs, which has become a go-to resource for both homeowners seeking real-world solutions to their HOA disputes, as well as those good HOA board members who are interested in doing a good job.

About MBK Chapman Fact Sheets

Homeowners searching for answers online will often come across articles that appear authoritative, but are actually written as search-engine marketing content rather than by an experienced HOA lawyer. These pieces tend to prioritize keyword density over clarity, accuracy, or legal context, which often leaves homeowners more confused than informed.

At MBK Chapman, our Fact Sheets are part of our HOA Law Library and are written by Michael Kushner, an HOA lawyer with decades of hands-on experience representing California homeowners. In fact, Michael Kushner is the HOA lawyer who pioneered the systems and strategies used by some of California’s most successful homeowner-side HOA law firms.

Each Fact Sheet is deliberately concise, statute-based, and designed as a quick-reference guide to help homeowners understand key HOA laws and enforcement rules at a glance.

AND DON’T FORGET TO TUNE INTO MY PODCAST, HOA HELL

YOU CAN ALSO ORDER MY GROUNDBREAKING BOOK

HOA HELL | California Homeowners’ Definitive Guide to Beating Bad HOAs

Amazon  |  Barnes & Noble