Reader Questions - Board Education, Elections, and Contracts

Dear Kelly,

I’ve been thinking of running for our association board. Is there a manual or other detailed, comprehensive source of information that describes how boards must conduct business and what liabilities the board, and/or individual members, could face if business is not conducted properly?

Thanks,

M.N., Redlands

Dear M.N.,

There is no official source of information for homeowner association directors. The California Association of Realtors® published its “Owner’s Guide to the Common Interest Development”, and the Bureau of Real Estate has a pamphlet. The best source for education regarding volunteer board service is your local Community Associations Institute Chapter. To find your local Chapter, check www.CAIonline.org – there are 8 in California.

CAI offers classes including the “Basic Board Education” course, a three hour class offered live or available on demand on the web (at the CAIonline.org site), and the “Leadership Essentials” class, an all-day class typically occurring on Saturdays. CAI’s Orange County Chapter offers a “Leadership Training Program” curriculum, offered in several three hour installments. The cost is typically low – and sometimes free.

Best,
Kelly

Hi Mr. Richardson,

The election for 2013 was held to be invalid. We have not had a Board Meeting since the attempted election early last year. We have an election scheduled, and I just received the ballot. There is a return envelope with my name and address in the upper left hand corner, but no envelope to keep the ballot secret.

I had a friend look at the year-end documents and the financial document prepared by an accountant is not an audit.

J.M., Northridge

Dear J.M.,

In an election for directors, you should have received TWO envelopes – one envelope to contain the ballot and an outer envelope into which you place the inner envelope containing the ballot. You can correct the mistake with your own blank envelope, but you should notify the association of the incomplete ballot mailing. The error, if not corrected, does not necessarily invalidate the election – that decision is for the Inspector(s) of Election, or, if challenged, by the court.

As to year-end financials, few associations can afford a true audit. What many call an “audit” is actually a “review”, and a review is not a verification of the data.

Thanks,
Kelly

Hello,

Does the Davis Stirling Act require that procurements of services contracts be opened to comments from homeowner? At least, I would hope, divulged after the fact of signing such an agreement. Specifically, does the Act require that such vendor contracts and associated documents sent to the HOA Board by such a 3rd party, including a Management Company, be made available upon request to homeowners?

Thanks,

J.L., Playa Vista

Dear J.L.,

While the Open Meeting Act (Civil Code Section 4925(b)) provides for a time for members to speak, it does not guarantee members can speak on each board motion. Vendor selection decisions should be made in the open. Negotiation strategy (such as a counter-offer) should be in closed session, but interviewing, discussing and selecting proposed vendors should be in open session. Members are entitled to see or copy vendor contracts under Civil Code Sections 5200(a)(4) and 5205.

Thanks,
Kelly

Written by Kelly G. Richardson

Kelly G. Richardson Esq., CCAL, is a Fellow of the College of Community Association Lawyers and a Partner of Richardson | Ober | DeNichilo LLP, a California law firm known for community association advice. Submit questions to [email protected]. Past columns at www.hoahomefront.com. All rights reserved®.