Reader Questions - Committees

Mr. Richardson,

I am the treasurer of a committee, which is the bank for funds raised by our various clubs and organizations. We use those funds to pay for projects. This year, our board told us that we had to hand over any funds over our budget at the end of the year to the board because the funds represented “profit”, and therefore did not belong to our committee. 

Could you explain this?

B.H., Cherry Valley

Dear B.H.,

Committees normally serve by board appointment and typically do not have independent legal authority – they make recommendations to the board and operate within authority specified by the board. Because the funds collected by the committee are association funds, they are under the board’s jurisdiction and control.

To prevent misunderstandings, boards should provide each committee a written charter, clearly specifying its responsibility and authority. This should include how funds are handled. These charters should be adopted by the board in an open meeting and provide to each newly appointed committee member.

Best,
Kelly

Dear Kelly,

I have requested copies of the architectural committee minutes. They reply that I am not entitled to them. Am I not understanding Civil Code §5200(a)(8) stating that meeting minutes must be made available for inspection by the membership?

K.M., Newport Beach

Dear K.M.,

Civil Code 5200 lists, among the records a member is entitled to review, minutes of committees formed under Corporations Code 7212. Section 7212 references “committees of the board.” These less-common committees are created by the board as sub-committees composed entirely of directors. However, most committees are committees of the association. Rather than minutes, they make recommendations, which hopefully the board relies upon. Those recommendations should be in the form of written reports to the board.

Thanks,
Kelly

Kelly,

Civil Code 5210(a)(5) requires that committees with decision-making authority keep minutes. Our architectural committee has such authority but does not meet. The submittal is sent to each committee member who then signs a page approving or disapproving the submittal. 

If committees have decision making authority, must they hold meetings open to the membership? Should the approval forms be contained in a “book of architectural approvals” so members can see what was approved or disapproved easily?

P.W., Laguna Niguel

Dear P.W.,

Does your committee truly have decision-making authority or are its decisions subject to board review? If it is required to keep minutes which are open to member inspection under Section 5210(a)(5), those minutes should be quite brief. Minutes should only record actions taken, not the reasons behind each decision. The action is approval or disapproval.

The Open Meeting Act (Civil Code 4900-4955) applies to board meetings, not committee meetings. However, if a quorum of the board participates in a committee meeting, it has become a “board meeting” under the definition of Civil Code 4090, and all the requirements of board meetings then apply.

Well-managed associations should have a record as to the architectural approvals given to each property, but those records are not included in the records subject to inspection under Civil Code 5200. Civil Code 5215(a)(5)(F) states that interior architectural plans are confidential and not to be produced. So, it would not seem that a member would be able to inspect the architectural approvals, for example, given to neighbors.

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®.