March 2010 – Does your state require that your condo or homeowner association board have open meetings? If so, what does that mean?
What about executive sessions? Can your board sometimes announce it’s HOA board meeting is going into executive session, which means you’ll shoo members out of the room and discuss items without owners’ knowledge? If so, what can you discuss privately, and what must you discuss in front of homeowners who wish to attend? Here’s a rundown.
State Laws Can Require Open Meetings
How open your meetings must be—and what that means—is governed by your state law and your governing documents.
California’s statute governing community associations, called the Davis-Stirling Act, directly addresses board meetings. “California requires the board to meet at an open meeting, defines what a meeting is, and requires that notice of the meeting go out to membership,” explains Robert DeNichilo, an attorney at Neuland & Whitney APC in Rancho Santa Margarita, Calif., who specializes in representing community associations. “It also has a time for executive sessions and what types of issues can be discussed in executive session. Those are litigation, contracts with non-owners, owner discipline—and the owner at issue is entitled to attend that portion of the meeting—and personnel matters.”
Florida has a similar open meeting requirement. “Every board and committee meeting needs to be open to the membership,” says Bill Worrall, vice president of The Continental Group, which is based in Hollywood, Fla., and manages 1,300 condominium and homeowner associations totaling 310,000 residential units. “There’s one exception, when the board is allowed to have a closed-door meeting with association counsel and exclude membership when the purpose of the meeting is regarding sensitive association litigation in progress. To my knowledge, that’s the only time the board can do anything, if there’s quorum present, without being open to the membership.”
Texas has a bit of a hybrid open meeting law. “Homeowners are entitled to attend board meetings in condo associations, but not in homeowners associations,” says David Regenbaum, founder, chairman, and CEO of Association Management Inc. in Houston, which manages 239 communities with about 62,000 units. “They’re not entitled to participate—it’s ‘attend,’ and they’re not entitled to notice. They can ask when the next meeting is, but they’re not entitled to notice.”
“Most of our boards in Texas don’t announce board meetings, but they also don’t tell people they can’t come,” says Jenny Key. Jenny Key is vice president of the Austin, Texas-based RealManage, an association management firm that oversees properties in Arizona, California, Colorado, Florida, Louisiana, Nevada, and Texas. “There are times the board does need to adjourn into executive session because some issues should be discussed privately. Other than those issues, I’d advise the board to discuss issues in open session and to have a record of their discussions in the minutes.”
According to Regenbaum, an executive session is proper in Texas for specific topics. “It’s matters involving personnel, pending litigation, contract negotiation, enforcement actions, invasion of privacy, and a catchall for whenever the board and the affected party agree to have executive session.”
If your board needs to go into executive session, Regenbaum suggests you politely ask members to leave the room. “Boards typically have executive sessions at the end of their regular meeting,” he explains. What if owners refuse to leave? “On occasion, boards have left and gone to meet in one of the units.”
When Boards Meet in Secret
Despite rules in some states prohibiting secret meetings, they still happen behind closed doors. “Do boards have secret meetings?” asks Worrall. “Sure, it happens all the time, but it really shouldn’t.”
It sometimes happens by accident. “What happens is that when meeting in executive session, the discussions are a little looser, and the board ends end up discussing something that’s an open session item,” explains DiNichilo. “Boards have to be very cognizant of the fact that they’re in executive session and what items can be discussed.
“Boards should also keep executive session minutes because members have a right to certain documents, which doesn’t include executive session minutes,” adds DiNichilo. “Executive session should generally be noted in the board’s meeting minutes. It should include a description of what was discussed, but not in detail: ‘The board went into executive session to discuss litigation and personnel matters.’ Then, in the executive session meeting minutes, it might state: ‘The board discussed a settlement offer and accepted it,’ or rejected it or made a counteroffer, whatever the outcome was.”
Even if your state doesn’t have specific rules governing open meetings, open board meetings should be the rule. “The key is transparency,” says Regenbaum. “There’s a reason to go into executive session, and if the board respects the fundamental reasons and explains them, there’s no problem. It’s when the board uses executive sessions as an excuse to have secret meetings that there’s a problem.”
Key agrees. “It’s always a good idea to have open meetings. I’d be suspicious of any board that’s unwilling to have an open meeting.”
Matt Humphrey is president of the Alameda, California-based HOAleader.com, from which this article was adapted.