Reader Questions - Closed Session, Member Participation

Kelly Richardson,

I read your article in the paper, referencing homeowner association meetings and the Open Meeting Act (Civil Code 4900-4955). Prior to open board meetings, our board has closed door meetings, restricted to attendance by the board of directors.

What can the board of directors of a homeowners association discuss in a closed door meeting? Is the board required to discuss the closed door items at the open board meetings?

Sincerely,
C.S., Placentia

Dear C.S.,

Closed session is a very important part of HOA board process, but it is sometimes overused. Boards are required by Civil Code 4925 to meet in open session, except for executive (closed) session. Per Civil Code 4935, only certain topics may be addressed in “executive” or closed session: Personnel matters (involving HOA employees), litigation (discussing or receiving attorney advice), member discipline or common area damage reimbursement hearings, delinquency payment plans, formation of contracts (developing negotiating strategy and counter offers), voting to foreclose upon assessment liens, and meeting with members to discuss assessment delinquencies.

Any topics other than those listed in Civil Code 4935 must be in open session. However, a number of board actions often are mistakenly handled in closed session, such as appointing Inspectors of Election and filling board vacancies. If one is in doubt as to the whether a given topic should be discussed in closed or open session, a quick call to your HOA lawyer can help make sure a subject is not erroneously handled in closed session.

Under Civil Code 4935(e), the board must generally note the subject(s) of a closed session in the next open session minutes, such as, for example, “personnel matter”, “foreclosure vote” and so on.

Hope this helps,
Kelly

Dear Kelly,

At our board meetings when the board is discussing an issue, we sitting in the audience are not allowed to ask questions. We are told by the president we can’t ask questions, because only the board can be in the discussion. If that is the case, why have an open board meeting?

Thank you,

T.B., Moreno Valley

Dear T.B.,

Board meetings must be open (except for executive session topics) for any member to observe, under Civil Code 4925(a). Furthermore each board meeting must have an open session time in which members can address the board on any topic of their choosing, within a time limit set by the board, under Section 4925(b).

However, open forum comment is different than participating in discussion or interrupting board discussion with questions. Directors are elected to devote the time to comply with the Business Judgment Rule, studying information from committees, management and consultants to make good decisions. If all attending homeowners discuss each item, then it is no longer a board meeting, but a town hall meeting, and the homeowners present will have extra influence by virtue of attending and participating. Allowing free discussion by all attending members may seem neighborly, but everybody in the room will not read the entire board packet and is not willing to be held legally accountable for the decision – so it’s better to allow the board to do its job.

The board should not interrupt your open forum remarks, and the board should not permit interruption during its deliberations, unless the board requests homeowner input.

Sincerely,
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®.