EXECUTIVE SESSION MEETINGS IN HOAs – WHAT CAN THE BOARD TALK ABOUT?

In California, there is specific law on the subject of what can be discussed at executive session meetings. It is not exactly the same as the “Brown Act” which applies to public entities like the government offices, city councils, etc. But it is similar. The idea of course is to preserve protections for certain subjects that deserve confidentiality for specific reasons. For example, if the association is threatened with litigation, it has the right to discuss the situation, facts and strategy with the association’s attorney, or without, in executive session. That means of course that owners are excluded from the meeting. It is in the best interest of the association to have things like that treated with confidentiality for many reasons which I will not go into here. It is sufficient to say that the following subjects are ones that can be discussed in executive session:

This is one of the subjects:

”   (g) When the board of directors is to meet to consider or impose discipline upon a member, the board shall notify the member in writing, by either personal delivery or first-class mail, at least 10 days prior to the meeting. The notification shall contain, at a minimum, the date, time, and place of the meeting, the nature of the alleged violation for which a member may be disciplined, and a statement that the member has a right to attend and may address the board at the meeting. The board of directors of the association shall meet in executive session if requested by the member being disciplined.”

Naturally this protects the privacy of the individual subject to being disciplined, which is appropriate.

This is the main paragraph in the meetings area of the Davis Stirling Act (all these sections are found within the Open Meetings Act in Civil Code Section 1363.05):

“(b) Any member of the association may attend meetings of the board of directors of the association, except when the board adjourns to, or meets solely in, executive session to consider litigation, matters relating to the formation of contracts with third parties, member disciplinepersonnel matters, or to meet with a member, upon the member’s request, regarding the member’s payment of assessments, as specified in Section 1367 or 1367.1. The board of directors of the association shall meet in executive session, if requested by a member who may be subject to a fine, penalty, or other form of discipline, and the member shall be entitled to attend the executive session. As specified in paragraph (2) of subdivision (k), a member of the association shall be entitled to attend a teleconference meeting or the portion of a teleconference meeting that is open to members, and that meeting or portion of the meeting shall be audible to the members in a location specified in the notice of the meeting.”

So you can see, executive session meetings are limited to about 5 topics (the bold emphasis is mine).

The law requires transparency to a degree – by requiring boards to include information letting owners know that an executive session meeting has been held, and what topic was discussed. See the following section:

“(c) Any matter discussed in executive session shall be generally noted in the minutes of the immediately following meeting that is open to the entire membership.”

With the latest new law on meetings, boards must now prepare an agenda for executive sessions and let owners know at least 2 days before the executive session is to occur if it will be held at some time other than in conjunction with an open board meeting.

So what does the agenda and what do the minutes reflect, if the matter discussed is confidential? The answer is that they need to reflect the purpose of the meeting – i.e., to discuss litigation, a personnel matter, a disciplinary matter, negotiation of a contract, etc. Nothing more specific than the purpose need be stated as anything more could take the disclosure into the uncomfortable area of disclosing confidential informatioon. The important thing for members to know is what the subject of the session is going to be, or was, so that they can see that it was within the subject matter that is appropriate for discussion in executive session.

And last but not least, the question arises as to what exactly can a member do if the board is meeting in secret and does none of these things? Or meets and discusses matters other than what is allowed.

There is a remedy for that in the law. Civil Code Section 1363.09 provides:

1363.09. REMEDIES.  (Operative July 1, 2006.)

(a) A member of an association may bring a civil action for declaratory or equitable relief for a violation of this article by an association of which he or she is a member, including, but not limited to, injunctive relief, restitution, or a combination thereof, within one year of the date the cause of action accrues. …

(b) A member who prevails in a civil action to enforce his or her rights pursuant to this article shall be entitled to reasonable attorney’s fees and court costs, and the court may impose a civil penalty of up to five hundred dollars ($500) for each violation, except that each identical violation shall be subject to only one penalty if the violation affects each member of the association equally. A prevailing association shall not recover any costs, unless the court finds the action to be frivolous, unreasonable, or without foundation.”

If a board makes a mistake, and commits a technical violation innocently, I do not believe that is cause to run off to court and seek a penalty. On the other hand, if a board, especially after being warned and informed about the law, blunders ahead without regard for the law, then they are probably doing some other questionable things as well. See how they add up; see if warnings will work; and if not, consider all your options.

 

 

 

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2 Responses to EXECUTIVE SESSION MEETINGS IN HOAs – WHAT CAN THE BOARD TALK ABOUT?
  1. Cynthia
    October 17, 2011 | 5:07 pm

    Is a board member treated any differently than a memeber when it comes to discipline or IDR? At the last executive meeting, the board voted “to censure” another board member for violating the code of conduct. In turn, management reflected such topic (which occured in executive session) in the latest newsletter and even printed that board members name. Is that legal?

    • Beth Grimm
      November 9, 2011 | 5:31 am

      In my opinion, board members are subject to discipline but they also deserve due process before any is imposed. And I do not recommend public censure as a rule. However, admonitions and possibly censure in executive session can be useful if the board member breached his or her fiduciary duty. There are other remedies as well.