Reader Questions – Closed Sessions (part 3)Jul 05, 2021
By Kelly G. Richardson, Esq. CCAL
When will it be legal for HOA boards to handle any business they want in closed sessions? H.F., Banning
The Open Meeting Act limits what can be discussed in closed session. Boards that violate this by going beyond the limited topics allowed by Civil Code Section 4935 risk not only the mistrust of their neighbors, but also risk the argument that the board’s decisions are legally invalid because they were outside the association’s legal boundaries. The Open Meeting Act is not perfect, but it is generally good for HOA governance, and there is no reason to suspect it will go away in the future.
Dear Mr. Richardson: The board closed meeting agenda is posted on the window of the HOA office as follows: “Legal, contracts, personnel, members matters.” There is no detail under those categories. My contention is that the posted closed session agenda is not an actionable agenda and that the detailed agenda provided to each board member should be the one posted but with redacting names. Would you please provide your position in this matter. Sincerely, H.M., Murrieta
The posted agenda should be sufficiently informative so that homeowners can know generally what is planned for discussion, even in the closed session. Some more specificity than just listing the blanket categories is necessary to provide some transparency while still protecting the privacy of the members involved. Since the minutes of the next open meeting must per Civil Code 4935(e) “generally note” the “matters discussed in executive session,” it would seem reasonable that the posted agenda should match this level of specificity.
Dear Mr. Richardson: Does the summary of executive session minutes need to show how long session was? C.L., Pasadena
The Davis-Stirling Act does not specify if the starting or ending time of a board meeting (closed or open session) must be recorded in the minutes. Corporations Code Section 1500 requires corporations to “keep minutes of the proceedings of its shareholders, board and committees of the board…” Civil Code Section 4935(e) requires only that the minutes of the next open meeting contain a “general note” of actions taken.
Minutes serve to document board motions and outcomes, reports received by the board, and which directors were in attendance. When I take minutes, I customarily note the beginning and ending times, but I cannot find any provision in the Corporations Code or Civil Code requiring this.
Kelly: Is an HOA management company a third party so the board can discuss its contract in executive session? Our new manager says so. I disagree. M.M., San Diego County
A manager who is not a direct employee of the association is not “personnel” but is a vendor, so discussions about the management contract should ordinarily be in open session. Per Civil Code Section 4935, the only discussions properly in closed session about any vendor would be attorney-client discussions, possible litigation risks, or “formation of contracts.” “Formation of contracts” within the meaning of Civil Code Section 4935 does not mean EVERYTHING to do with contracts but only FORMATION of contracts. Therefore, what should be in closed session is the discussion of negotiating strategy and contract contents. Selection of vendors should occur in open session, with the confidential issues saved for closed session.
Best regards, Kelly