California: Governor Brown Signs SB 563

Senate Bill 563 was signed into law on September 6. Following is a summary of the relevant provisions.

Notice of Executive Sessions. The bill requires that "Except for an emergency meeting, members shall be given notice of the time and place of a meeting that will be held solely in executive session at least two days prior to the meeting. Notice shall be given by posting the notice in a prominent place or places within the common area and by mail to any owner who had requested notification of board meetings by mail, at the address requested by the owner. Notice may also be given by mail, by delivery of the notice to each unit in the development, by newsletter or similar means of communication, or, with the consent of the member, by electronic means. The notice shall contain the agenda for the meeting."

Board Decisions Via Email. Except for emergencies, boards are no longer allowed to make decisions by email. Emergency meetings may be held by email if all members of the board, individually or collectively, consent in writing to the action, and if the written consent or consents are filed with the minutes of the meeting of the board.

Teleconference Meetings. SB 563 also defines a "teleconference" meeting to be one in which a majority of the members of the board, in different locations, are connected by electronic means, through audio or video or both. The bill requires that a teleconference meeting (other than executive sessions) be conducted in a manner that protects the rights of members of the association. It requires that notice of the teleconference meeting identify at least one physical location so that members of the association may attend and at least one member of the board of directors be present at that location. All board members and homeowners must be able to hear one another.

And this is an improvement over the original proposal - prohibiting any and all communications between board members outside of a board meeting. According to that proposal you wouldn't be able to say hello to another fellow board member if you met them on a street.

Richard, I missed reading the part about no email communications. Can you provide the relevant citation for that, or point it out to me?

For ease, here's a link to the new law: http://www.leginfo.ca.gov/pub/11-12/bill/sen/sb_0551-0600/sb_563_bill_20110906_chaptered.html

thanks...

I saw that too, but never consider sending an email asking my board members if they are free to have a meeting two weeks from Friday to be equivalent to having a meeting. I strictly interpret, i guess, the idea of "action".

What if you were discussing by email, without making a decision, three proposals to upgrade your irrigation controllers?

I believe the new law addresses executive sessions the same way as open meetings. I don't think you can discuss any business by email any longer.

Tell me more, Jeff! I don't interpret the new legislation as we directors cannot discuss Executive Session matters outside of meetings. Help me understand! Thanks.

Thanks, Jeff, for your clear logic. Looks like you may be right re: no discussions of items scheduled for executive session outside of that session. Our board rarely has such discussions online anyway as some directors share computers with their spouses so we're concerned about confidentiality.

Because until the the end of '06, boards here were secretive in a paranoid way, the more recent board(s) and current board never discusses open meeting agenda items among a majority of directors online. We have been totally transparent for quite some time now.

Re: transparency, Richard, our board believes that it's only achieved when owners can see and hear the deliberative process. Though, with 200+ residences and a couple of commercial units, our HOA isn't huge, we do have two 25-story twin towers in an urban setting. Our HOA, then, is very complex with elevators, boilers, pumps, cooling towers, computerized secure access systems, 35 common area heat pumps, 3 levels of underground parking, etc.

We have about 20 contracts in place, including a MC that provides us with a PM & assist. mgr. We generally renew these in Open Meetings and also review bids on them in open meetings.

We currently are in the midst of forming two contracts in the mid-six-figure range and will seek proposals for a third of that size by the end of the year.

Our board of 7, of which I'm prez, has engaged in all discussion, deliberations, etc. at executive sessions at which we've interviewed 3-4 contractors. These back-to-back interviews take about 2 hours. We have had no discussion about these online.

Our monthly open meetings last about 1-1/2 hours and executive sessions about an hour except for the interviews mentioned above.

So, I'm still puzzled, Richard, why the board you're on can't abide by the new legislation. And it's a shame that the boards of the HOA's that you manage don't abide by the laws. As I've noted elsewhere, our MC has clauses in its contract with us that the PM will not do anything that opposes state law or our governing documents.

Carol

The board I am on, which I am the President, is one of the most transparent boards you will find. Our discussion are in the open, after we have done our research. The key is, unless in an emergency, we take no action until a meeting, whether executive or open. If we had taken action between meetings, we have a resolution placed into the minutes of the next meeting.

I'll give a short example of a project we're working on. We are in the process of add smart water controllers to our existing irrigation controllers. This may have a yearly savings of $50K-$75K on our common area water. A few of us did some research, idenified the brands and models opf the conrollers we had and the compatible of the smart controller with each unit. This information was shared with our Board and our PM, to make sure that we were bidding apples to apples. Once are the research is done and preliminary questions answered, the item can be discussion at an open meeting and responsible action taken.

Under some peoples interpretation, you shouldn't be able to have discussions bewteen meetings. You come to a meeting, unprepared and without any research done to take action. Because you don't have the right information , the item is tabled.

While I am not an attorney, I work for one, our interpretation and advise would be, to not take action unless it is at a duly noticed executive or open session. There should be problem with email communication as long as NO ACTION or DECISIONS are taken or voted on. Remember, email is not real-time communication, or online as someone mentiond.

How do we make sure that this Board is transparent to the community for which we serve. We post agendas four days before the meeting. We send two email blast to over 200 of our residents. We put signs out. After the meeting, an email blast is sent with a summary of the meeting that just place. Monthly financials are given to attendees at monthlyBoard meeting. Agendas, Minutes, Financials, Governing Docs, Reserve Studies, etc, are posted on two secure homeowner websites. We are very transparent.

Carol, we have the same type of clause in our management agreement, but as the governing documents state, the ultimate responibility of running an Association lies with the Board of Directors. They can do whatever they decide to do regardless of what their PM advises them.

Thanks whoever has been keeping on top of these new laws. Fascinating. My board and HOA pretty much do business only by email and I hate it. A resident writes an email to a board member, just whoever they are the most comfortable writing, maybe the other board members hear about it, or maybe not. A board member gets a financial statement via email from the property manager, maybe they email it to everyone else, or maybe not..... Yes, I know most of this has to do with the fact that protocols of communication are entirely absent.

Thomas, the new law doesn't prohibit board contacts by email from members, or receiving your financials by email. It only addresses discussing board business and making decisions.

You may need to talk to other board members on establishing some protocols that works for all of you on how to handle your situation.