Reader Questions - Closed Sessions, What Is an Owner

Richardson,

Is it legal for the board of directors to hold meetings with an agenda and exclude all other homeowners. These meetings are therefore secret meetings. Minutes are taken but not made available to others.

Your opinion please,

H.F., Fullerton

Dear H.F.,

It might be. It depends upon what is happening in those meetings. Almost all board deliberations must be in open session, with members able to quietly observe the proceedings.

The exception is usually called “closed” or “executive” session, authorized by Civil Code 1363.05(b), (found starting in 2014 at Civil 4935). The Open Meeting Act authorizes a board to deliberate in secret only on very limited topics, which are:

1. Personnel matters (HOA vendors are not “personnel”);
2. Litigation;
3. Member hearings regarding discipline or HOA reimbursement claims;
4. Foreclosing upon an assessment lien or meeting with a member regarding a member’s arrearage, or
5. Matters relating to the formation of contracts with third parties.

Confidential attorney-client discussions are normally also held in closed session.

The topic of “formation of contracts” is often used too expansively, so that all vendor hiring or firing is handled completely in closed session. The vendor selection process should be in open session, and discussions about possible counter-offers or contract terms should be in closed session. This preserves the board’s ability to negotiate the best deal with the vendor.

Boards overusing closed sessions often do so because it is more convenient, or to avoid unruly meetings. This not only breaks the law, but also abuses the trust of the neighbors.

Closed session should be used sparingly – only when necessary and authorized by law. Do it right – and openly.

Thanks,
Kelly

What Is an Owner?

Hi, Mr. Richardson,

Say a husband and wife decide to purchase a residence in a HOA. However, they only have the wife’s name on the deed to the property as the owner. Is the husband deemed to be a recognized homeowner for the purposes of election to office of the association even though his name is not on the deed? Our CC&R’s specify that an officer or committee chair be a homeowner.

Our problems go much farther than this, but your input will give us a starting point. Thanking you in advance for your response and looking forward to more articles,

Sincerely,

D.N., San Juan Capistrano

Dear D.N.,

There could be a difference between an “owner” and an “owner of record”. If your governing documents only refer to the qualification of “owner,” someone who has an interest by virtue of community property laws, or who holds an unrecorded deed, could present themselves as an owner. The problems from this are prevented by governing documents which define “member” as an “owner of record”. In this context, “of record” means that person’s ownership interest has been documented with the county recorder, so theoretically it could be confirmed by checking with the public ownership records on the property.

Check your documents carefully. Better yet, have your association’s attorney examine this question. You don’t want to confer rights on someone who is not truly a “member”, but you also don’t want to mistakenly deny those rights either.

Thanks for your question,
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®.