Must Our Manager Attend The Board Meeting?

By Kelly G. Richardson, Esq. CCAL, HOA Homefront Column

Dear Kelly: Is it legal for the board of a community to host a meeting without including representation from the HOA’s management? A.L., (manager), Laguna Hills

Dear A.L.: There is nothing in the law that specifically requires the HOA’s manager to attend any particular board meeting. Normally the management contract dictates when the manager is obligated to attend. However, if the board for any reason deems the presence of management to be unnecessary, a meeting can be announced without management being invited. Some practical problems can arise, as most HOAs rely on their manager to handle the administrative part of board meetings and often to keep the minutes of those meetings. However, the absence of management does not render the meeting illegal if the HOA board follows the Open Meeting Act and bylaws in the announcing and conducting of the board meeting. Thanks, Kelly

Dear Kelly: What are the procedures for changing property management companies?   Does the Davis-Stirling Act prohibit board members from discussing the management company in private and arriving at a decision to give the current management company notice?  Or must the discussion be carried out in an open meeting in the presence of the company with which the board is dissatisfied? W.E., Carlsbad

Mr. Richardson: My board president recently announced the board would address in executive session my request to review the association manager's performance, although he admitted this was not about formation of the management company contract. I believe it should be an open session item.  Is any director generally entitled to violate a practice of keeping in executive session what's discussed in executive session when topics, not authorized by Civil Code 4935 to be in executive session, are discussed and decided on? Does a director's duty of loyalty to support the majority, and to NOT reveal, outside executive session, differences of opinion, discussions, and decisions made there, apply ONLY to those topics NOT listed by Civil Code 4935? E.T., Yorba Linda.

Dear W.E. and E.T.: Discussing vendor performance is not a topic allowed by Civil Code Section 4935(a) to be in closed session. However, this does not mean the board must discuss management with management present. The board can simply schedule a board meeting and not ask management to attend. Similarly, if the board decides to change management companies, this can and should be discussed in an open board meeting, which the current management is not asked to attend. Discussing a possible change of vendors is not “formation of contracts,” although many lawyers and managers erroneously deem anything regarding contracts to be in closed session. This is an erroneous reading of the phrase “formation of contracts” (one of the allowable closed session topics under Civil Code Section 4935(a)). Decisions to terminate a vendor and to hire a replacement vendor are both open session topics. The formation of the contract is negotiating the contract terms. Clearly, any counter-offer or negotiating strategy as to the cost, level of service, or other key terms should be discussed in a closed session to preserve the HOA’s position in the negotiations.

No director, not even the president, can ignore the law. The duties of loyalty and confidentiality do not extend to matters which are improperly in closed session.

Best regards, Kelly