Reader Questions - Contracts, Telephone Participation

board members community managers h o a homefront reader questions Apr 21, 2014

Dear Kelly, 

I understand from reading my local newspaper that you specialize in answering HOA questions. I hope you can entertain mine.

My HOA signed a new contract. I asked to read it and the HOA responded that it had a confidential clause in it and they couldn’t let me see it. Two questions: Isn’t it illegal keep contracts secret from HOA members? What is my remedy?

Thanks in advance for your help,

D.A., Indio

Dear D.A.,

Contracts are generally something that association members have a right to see. Civil Code Section 5200(a)(4) states that “executed contracts not otherwise privileged under law” are “association records” which under Section 5205 are to be available for inspection or copying by members. Under Section 5210, if the contract was executed during the current fiscal year, it is to be made available within ten business days. If the association refuses, Section 5235 permits you to ask a Small Claims Court Judge for help.

Going to court rarely truly solves the problem, because most of the time the problem is that the board (or homeowner) simply does not know what they are supposed to do. So give the board a copy of the statutes mentioned here, or this column – allow them the chance to know and do the correct thing.

If there truly is a confidentiality clause in the contract, your association’s attorney may require you to sign a confidentiality agreement in which you promise not to share the contract or its contents. However, 99% of the time, contracts are not at all legally privileged, and boards should not be reluctant to allow members to review them.

Thanks,
Kelly

Hello Kelly,

We have a 5 member Board. Although we had a quorum (4 were present including me) at a recent Board Meeting, a director who was not present said he would be available by phone if his vote was required on any issue. This Board Meeting included on the agenda electing Officers for the year. There was a tied vote for President. Our Management Agent called this director on the speaker phone who then made the deciding vote. He did not have his telephone on during the entire meeting. Is this allowed by any code? Our CC&R and By-laws only address written proxy to cast a vote if a director is not able to attend meetings. There is nothing in the by-laws about directors’ “presence by telephone”.

Thank you for your column,
L.H., Wildomar

Dear. L.H.,

A board may allow a director to participate by telephone, but only under specific circumstances. Civil Code 4925(a), part of the “Open Meeting Act”, allows a director to participate in a board meeting telephonically so long as all the people in the room (audience included) can hear the director, and the director can also hear the people in the room. Associations are not required to allow phone participation. Using cell phones as a speakerphone can often be frustrating for all concerned, so if your board intends to allow directors to call in, invest a few dollars in a speakerphone that will allow the members to hear the caller. The fact the director only called in for a part of the meeting is OK, just as if the director stepped into the meeting and then had to step out again.

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®.