HOA Blog : Membership Conduct

Should Board Meetings Be Closed?
August 20, 2008By Kelly G. Richardson

Dear Sir:
I read your articles every week. Twice you have mentioned the open meeting law, but you still have not addressed secret meetings called Executive Sessions. Our board has been doing it for years and they even tell every one in attendance to go home while they have their private meeting.
D.P., Anaheim
 
Dear D.P.:
In the HOA world, there is a law which unfortunately is ignored at one time or another by far too many associations. The law, the Open Meeting Act, Civil Code Section 1363.05, confirms members' rights to:

1. Attend meetings;

2. Speak to the board at some time during the meetings;

3. Receive advance notice of meetings,

4. Receive draft minutes soon after meetings, and

5. Know that closed meetings occur only under certain circumstances.

It is this last requirement of the Open Meeting Act which seems to be the most widely abused, as boards all too often conduct important business in closed sessions.

WHY NOT IN THE OPEN MEETING?  Some boards prefer closed sessions to avoid the comments, criticism or even disruption caused by some members.  A closed session insulates them from having to “take any guff,” and is argued to be more efficient.  Business can be conducted more informally, and directors can speak freely without fear of repercussions (whether deserved or not). Some Boards have closed sessions but they call them “working meetings.”  However, the law does not allow this.

NEGATIVE RESULTS.  Illegal closed door meetings produce mistrust and further division.  Such meetings deprive members of valuable information pertaining to their homes, and deprive the Board of member input.

FOUR NARROW SUBJECTS.  Executive ses-sions only address four narrow subjects: Litigation; Personnel issues; Formation of contracts; and Hearings on member discipline or arrearages payment plans.

Everything else must be in open session.

Litigation.  The preservation of the attorney-client privilege in discussions involving actual or potential claims against the association is important, but not all attorney advice involves claims.  Some advice may best be handled in open session, if it provides general legal guidance to all members.  Rule of thumb: If it pertains to discipline, a dispute or to only one member, it is potential litigation and should be kept in closed session.

Personnel Issues.  The statute protects the privacy of association employees, but most associations do not have employees, but hire vendors – and they are not “personnel.”

Formation of Contracts.  This does not mean the Board can hire a new vendor in secret.  The best approach is to conduct the vendor interviews and selection discussion in open session, until the first choice bidder is selected.  Then the Board in closed session discusses what terms will be offered, negotiating strategy, and any legal input on the contract form.  That last step is the “formation of contract” process.

Member Discipline and Dues Arrearages. Members' privacy should be protected.

CONSEQUENCES OF IMPROPER CLOSED MEETINGS.  The Open Meeting Act does not have any explicit penalty for violations.  However, the consequences could be severe.  A court might decide that an action in an improper executive session was not corporate action, but only a personal liability of the directors, or a court might even set aside actions made during illegal closed sessions.

BETTER OPEN MEETINGS. Some tips to help your Board meetings:

1. Have basic meeting rules.  Unruly persons (even directors) should upon majority board vote be asked to leave if they interfere with the progress of the meeting.

2. Require your chairperson to move the meeting in an orderly manner through the agenda.

3. Proceed to a vote when things become repetitive.

4. Dissent is not disloyalty, and questions are not insults.

5. Remember that you as a director are working for your neighbors, and not vise versa.  They have a right to know how you are exercising the power which they have entrusted to you.

Obey the Open Meeting Act.  It is better for everyone in the long run.


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