California HOA Bard not following Executive Session notification rules

Started by TanyaW1 • 28 replies • 3143 views

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TanyaW1 (California)
Posts: 15

Posted:

Looking for some perspectives on my options as a Board member of an HOA Board (California) that disregards the Davis-Stirling Act rules for notifying members of Executive Session meetings.

I've only been a board member for 3 months but an association member for 10 years. There's tremendous apathy in our association and, unfortunately, the board president is bullying and secretive. Many decisions don't come out until after the fact and only at the poorly attended Annual meeting. I volunteered for the board to be part of the solution to the problem.

It's a technicality, but, here's my issue:

The Board decided late last year to update the CC&R's. It was announced at the Annual Mtg in February. The update will cost of about $7,000.00. I checked back over the minutes for 2012 and saw no mention of this decision in what should have been a regular open meeting setting.

Fast forward to today, the board decided to move forward with this update and hire an attorney to help. At a meeting outside of the regularly scheduled Board meeting, two of the five board members decided it was necessary to approve the attorney's proposal for a contract. In an email, the property manager asked for a vote on the proposal.

I declined and stated that all meetings and voting need to occur at a duly notified and convened board meeting. Since this would be considered an Executive Session meeting, I sent an email with links to the Davis-Stirling site where it explains in plain language how the board should proceed on these things.

The board president disregarded the law, stating it was okay for board members to email in a vote or telephone in a vote to the property manager since the issue had already been disclosed at the Annual Mtg and in the approved budget. She said the vote can be "ratified" at the next board meeting - and directed the property manager to contact the attorney and tell him to proceed (and I assume to pay him as well).

It's nit-picky, I know, but, I believe she's wrong. The association should be notified two days prior to any Executive Meeting - with an agenda publicly available. And, a quorum must be present for a vote.

Sorry for the lengthy post, but, I'm the secretary. This puts me in an awkward position at the next board meeting when it comes time to record this 'ratification.' Any advice on how to handle this?

TimB4 (Tennessee)
Posts: 21,061

Posted:

If the vote was done by e-mail, it sounds like an action without meeting request.
Actions without meetings are legal. Per Davis-Stirling's web site such action is no longer allowed.

I would point this out now in an e-mail and then bring it up as a topic of discussion at the next board meeting.

TanyaW1 (California)
Posts: 15

Posted:

Hi Tim and thanks for the reply.

Your correct, no action is allowed without a meeting - except for an emergency meeting.

To your suggestion, I see what you mean. Just for the record, I suppose.

I will have to bring it up at the board meeting but, honestly, this person is extreme in her bullying and condescension and the all the other board members cowtow to her rule. It's absurd, but that's what I'm dealing with.

I expect everyone to go along with her - I'm just not clear, as Secretary, how to sign off on something like this without implicating myself. I expect this behavior to continue.

Thanks for your feedback!

TimB4 (Tennessee)
Posts: 21,061

Posted:

Quote:

Posted By TanyaW1 on 07/05/2013 6:29 PM

I will have to bring it up at the board meeting but, honestly, this person is extreme in her bullying and condescension and the all the other board members cowtow to her rule. It's absurd, but that's what I'm dealing with.

I had a fried who, as a young lawyer, won many cases using a simple process. Perhaps it will work in your situation:

He would simply state that he knew he was new at this and perhaps he misinterpreted the law. He would then bring out the law, read it and ask how he might be misinterpreting what the law says.

You might want to try this at the meeting with your property manager in attendance. Direct the initial question to the President but then shift it to the property manager when you ask if you are interpreting it correctly. This will show that you have done your homework and place the PM on notice that you trust what they say but are willing to verify it.

CarolR11 (Colorado)
Posts: 2,563

Posted:

Welcome to HOATalk, Tanya. First: why does the Board think voting to pay any attorney should be done in executive session? While it's true that contracts information CAN be discussed and decided (voted on ) in ES, there seems to be no need in your case.

Second, why does the PM agree to this especially since only two of the 5 directors want this? Why was that particular meeting outside of a regular board meeting?

Tim correctly points out and you seem to know that actions without a meeting in Cali only can be done in cases of emergency.

Just because it helps me think: what size is you HOA?

Sorry; gotta go .More tomorrow.

TanyaW1 (California)
Posts: 15

Posted:

Thanks Tim and Carol,

Tim, I'll try that tactic. Sounds like a great way to keep things as objective and fact oriented as possible.

Carol, I agree that the issue isn't necessary for an ES, but I wasn't sure from the wording from Davis-Stirling on that, since, technically, it's in the category of 'formation of contracts', but, yes, I agree that in this case it isn't necessary. I'm not sure what the boards position on that is, but clearly the board pres thinks this isn't an issue at all.

The board president initiated draft revisions to the CC&R's that were submitted to the previous property manager who was let go a few months ago. I only know this because I came on board as a volunteer to fill a vacancy and was privy to that PM's monthly report, which stated the president had submitted draft revisions.

I brought this up to the board during the previous meeting: why hasn't the lawyer advised on admissible updates first instead of the other way around? The board pres said that the lawyer instructed the board to work on the revisions first, then he/she would advise. I commented that that was odd, and seemed backwards.

Regarding the revisions already drafted, when I asked, "Don't you think it'd be a good idea to share them with us?" (in a polite way, mind you). The president's response was, "No. No one else did any work on this but me." I'm paraphrasing, but that's the gist. I got the impression no one else on the board showed up at previous mtg to work on it or something. I didn't see anything mentioned about it in the minutes in the last four or five months so I'm assuming it was an outside mtg.

That conversation is what initiated the latest outside meeting. A time was set to meet to work on revisions this past Monday. I understood it to be non mandatory and just who ever could make it. I wasn't aware, at the time, that this was a no-no, or constituted an actual 'board meeting.'

I missed that meeting because I got the times mixed up. Then I get an email from the PM saying the people who showed up (the PM, the board pres, and the treasurer) decided things needed to proceed with the attorney, and that it was best to get the attorney's advice about updates beforehand. In the email, the PM asked me to vote cast my vote re: proceeding with the contract.

That's what got my attention, because I did at least know that voting on things outside of official board meetings was inappropriate.

Again, sorry for the lengthy reply. Just trying to make it all clear.

Update: I went ahead and sent an email this evening telling the PM, the board pres, and the treasurer (the other board members don't have email) that going ahead with the contract was not legal (because of how the vote was conducted) and formally requested the issue of meetings and notices per Davis-Stirling be placed on the agenda at the next Board Mtg.

I'm sure I've really incurred some wrath now. Very awkward.

TanyaW1 (California)
Posts: 15

Posted:

Sorry - forgot to mention - my HOA is 87 units.

TanyaW1 (California)
Posts: 15

Posted:

Sorry again - the PM defers to the board president. The entire board does. As I mentioned earlier, she rules the roost.

To give you some perspective. When I was just a lowly association member and attended a board meeting recently, she refused to discuss my concerns about shoddy paint touch ups along our corridors (Throughout the entire building, the touch up paint doesn't uniformly match the walls. Looks really shoddy.). Admittedly, it got a bit heated on both sides and I told her she wasn't "the Queen."

She laughed and said, "You're the only one who seems to think I'm not."

God as my witness.

TanyaW1 (California)
Posts: 15

Posted:

One more thing - to clarify, a majority vote was cast for this action. The treasurer emailed it in, and, according to the Board President, the two other board members telephoned the PM.

My issue is - as I said - nit picky, but in light of the board's history of secrecy - I believe it's important. The manner of the vote was inappropriate.

The association was not notified, and there was no actual meeting with a quorum present to vote on it. Davis-Stirling doesn't allow for emailed votes or separately phoned in votes, and requires a 4 day notice for regular meetings and a 2 day notice for ES meetings. I emailed and told the board pres this.

I was told they intend to 'ratify' the vote at the next board meeting. It's over now, but, as the Secretary, I'm going to have to record this 'ratified' vote everyone seems to think makes this all okay.

I'm extremely uncomfortable with this as I believe the original vote is invalid, but services will have already been contracted and paid for by then. The train will have already left the station.

Any advice on how to handle this in the minutes? I believe this action is unethical and, just in case, I don't want to be liable for anything down the line.

That's it! Got it all out of my system!

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Tanya

Right or wrong I believe you will always find fault with the Pres and PM. Your issues with them are personal, not professional.

TanyaW1 (California)
Posts: 15

Posted:

Hi John,

Yes, I have considered that. However, as a Board member, I think it's important to follow CA law and am unwilling to do otherwise.

Thanks for your feedback.

TimB4 (Tennessee)
Posts: 21,061

Posted:

Quote:

Posted By TanyaW1 on 07/06/2013 2:02 AM

Any advice on how to handle this in the minutes? I believe this action is unethical and, just in case, I don't want to be liable for anything down the line.

You simply record the facts.

E-mail was sent by xyz to vote on abc.
The vote was x yea, x nay and x abstain
Copy of e-mails are included as an attachment to these minutes.

TanyaW1 (California)
Posts: 15

Posted:

Simple is always good.

Thanks, Tim.

CarolR11 (Colorado)
Posts: 2,563

Posted:

Since our Board, and i hope most in CA, would never proceed the way your prez & treasurer did, I've never seen how it would look in minutes. How, for example, can the Board decide something without a motion?? Or at a (non) meeting without a quorum?

How can the attorney already have been "hired" given that the Board actually has not voted on this? How can this attorney possibly think his contract with your HOA is valid (in CA)?

But, seems like you're stuck, so enter the votes the way Tim suggests. But it seems to me that your minutes might state: Directors voted in person, online and by phone from xxx (date) - xx (date) to hire XX firm to revise our CC&Rs.
Tonight, the board ratified the vote xx yes, xx, no, xx abstain.

That's the only way I can think to do it. I'm curious: often the PM records the meeting minutes--but not at yours?

By the way, you mentioned that the PM "decided." But PM's shouldn't "decide" anything.

Anyway, as you know, your president did break CA civil code about open meetings. So did your PM. Doesn't your contract with your mgmt. co, (MC) say that the PM doesn't need to follow directions from the Board that oppose CA laws or your own documents?

I'm afraid you've found yourself in quite a mess, Tanya. At your next open meeting, as Tim suggests, place the Open Meeting Act on your agenda for discussion so at least you can go on record as wanting the Board to abide by the Davis Stirling Open Meeting Act.

TanyaW1 (California)
Posts: 15

Posted:

Carol, thanks for the advice. Between you and Tim I have a good idea on how to handle this very uncomfortable situation. I can't imagine, though, that they'll let it fly (especially with the attached emails as a record). I might just find myself booted off the board in a hurry (they voted to allow me in to fill a vacancy).

The secretary, as far as I know, has always recorded minutes. I'm still not clear on who has been posting the agenda. I've been to two board meetings as a board member and the president prepared and posted the agenda each time. I only just got the key to the bulletin board last week.

The PM didn't decide - he was reporting, in an email, what the treasurer and the pres decided they want everyone to do. That was my take on that, but he definitely does weigh in on things.

I'll have to go over the PM contract again to check on his liability with CA law. Still learning these things.

Thanks again everyone for your feedback. Very much appreciated.

MikeR15 (Massachusetts)
Posts: 389

Posted:

Tanya,

You are being given bad advice, which is not unusual here.

Your board will viciously attack you for daring to quote the law, governing documents or any other fundamental democratic principle.

The PM will sit there with an obtuse look on his face, or worse spout some of the inane nonsense you are already getting here.

Your BOD has no reason to obey the law or anything else....I had a board president tell me when caught red handed violating the law "so sue us, we have insurance!" She said it with a smirk on her face which was only rivaled by the smirk on the face of the association attorney.

These HOAs are designed to get the most pathological personalities in positions of power (your Alice in Wonderland Queen for example)...and then the money REALLY will begin to flow into the service provider's pockets.

The most likely result of your efforts will make you a target for the board, a clear and present danger so to speak.You may start to find your vehicles towed or getting fined for whatever reason the board can dream up once they understand what you are up to...which is trying to diminish the power of those people...but worse....attempting to take the food out of the mouths of the service providers children.

Yes, welcome to HOA board membership, and the pathological world of wonderful Davis Sterling law which conveniently forgot to include any enforcement of all those meaningless laws.

TanyaW1 (California)
Posts: 15

Posted:

Mike,

Actually, I think I've received very good advice. I do appreciate your input though, and I think you are absolutely right as far as my board responding negatively.

I happen to live, unfortunately, in a condo complex with a board president and vice president who have confused their purpose and function. It's sad, really, because both of them are actually quite dedicated to the building. Generally speaking, the complex has run decently over the last 10 years I've been here. The bills are paid, yada yada. I give credit where it is due. But the bullying and secrecy (and law breaking) is a serious problem.

For years I've heard some pretty far out rumors. The president's reputation is legend among the neighborhood associations in our community. I didn't believe any of it until I personally witnessed some of the deceit, vitriol, and secretiveness for myself.

That said, I've decided to be proactive. After this latest incident, I'm very clear that my best bet may be to work from without rather than from within for now. I'm pretty certain that I'm spinning my wheels with this current group. The attacks have already begun, trust me.

Resigning (or getting booted off?) might save me some wasted energy that might be better directed at creating awareness and helping to vote in some new members for the next term. In a smart and ethical way of course. I'd certain run. If i stay on now, my gut tells me I'll have to grin and bear blatant unethical behavior for 6 more months or have a fight on my hands every 30 days. Who needs that?

I believe most people can 'govern' on an HOA responsibly, just not these particular people.

CarolR11 (Colorado)
Posts: 2,563

Posted:

You really do seem to be in a dicey situation. Do you have any support at all from other directors? That you're a board appointee sure does make your position less stable.

You may have to rally homeowners to pressure the board to follow thee laws, i.e., invite them to your open meetings and encourage them to participate in open forum. If you can do that, you may be able to generate the support needed to throw the bums out. That's exactly what we did in my HOA, and in one year, we had a brand new Board that quickly turned things around. "Power to the people" works!

If you do get thrown off the Board and have the energy--get your people together to make change.

But it took a lot of effort in our case, lining up our ducks, learning our docs inside & out, etc.

Now that you have a key to the bulletin board, perhaps you'll be able to post the agendas in a timely manner.

TanyaW1 (California)
Posts: 15

Posted:

That's exactly what a group of us are trying to do - change the board. I'd thought, maybe, volunteering would be a good way to start the process and, like I'd said befer, be a part of the solution and not the problem.

It's been disturbing to witness, up close, how dysfunctional it all is. Only one board member seems to have any sort of professionalism, but she defers to the president. When the previous PM was fired recently that was alarming, because she was a decent, ethical person. The new guy - not so much (he worked for us before).

It's a mess.

Slowly, our little group is successfully encouraging more people to attend meetings - and, frankly, I've let everyone know that I need their support and can't do all of this on my own. They're listening but only time will tell who'll really go the distance.

That $7000 price tag for updating the CC&Rs is an eye opener. I'm no lawyer, but, it doesn't seem to be a necessary expense to me. DS is clear: governing law prevails over the CC&Rs. Seems pretty simple. I haven't figured out why the Board is so gung ho on updating it. It's a scary proposition.

Your example, Carol, is encouraging!

MikeR15 (Massachusetts)
Posts: 389

Posted:

Tanya,

I think you have hit upon the fatal flaw of HOAs today.

It is not a matter of finding the right people to run the place.

It is a matter of creating a system where, when even when the worst people attain a position of power in these places,they are

are rendered powerless to break the law or held responsible by law enforcement when they do.

This is how our "real" government is works, with checks and balances, separate departments of government (Exec, Leg. Jud.)

and with law enforcement vigorously enforcing the law when it is broken.

We see this all the time when corrupt law makers, judges and even the occasional executive branch member make the news.

None of those protections exist with HOAs today.

If you call the Attorney General and inform them of all the things you mention in your posts.....even provide them with the proof....they will refuse to act.

They will tell you to pony up 10's of thousands of dollars and pursue your "grievance" in civil court.

In short....it is a joke.

Here is an excellent position paper written by an HOA treasurer that went viral a few years ago. It makes some acute observations about the sorry state of affairs that is HOA governance today.

http://pvtgov.org/pvtgov/downloads/hoa_treasurer.pdf

Let me know what you think of this.

MikeR15 (Massachusetts)
Posts: 389

Posted:

TanyaW1 (California)
Posts: 15

Posted:

I'll give the report a look, Mike. Thanks.

CarolR11 (Colorado)
Posts: 2,563

Posted:

Keep at it with your little group (we actually called ours "The Small Group"; boring name but we really changed secrecy and ignorance (old board) to openness, knowledge and fresh ideas). I can see why you would have thought that being appointed to the board would help your community. But you need allies and it's great that some are willing to support you.

We need to revise our CC&Rs soon, too. We're 12 years old and the CC&Rs are full of "developer" language plus we're restricted by them from changing to self management (hire a mgr. as an employee in our case). $7,000 isn't unusual based on prices I've seen on this Board. How old is your HOA? Will the attorney come and discuss the changes with owners & the Board? What percent of owners need to vote for approval? Ours is 67%--alos not unusual, but very difficult to achieve.

A lot of what's in your CC&Rs is specific to your HOA and they often contain an outline or more of your architectural guidelines. So, while it's true that state (& municipal & federal law) may trump your CC&Rs, and other parts of your CC&Rs may be boilerplate, there are important aspects that are unique to your HOA.

Unless your prez has come up with some really whacky revisions, which one hopes your attorney will catch, I'm thinking that you & your group just needs to carefully read & assess the proposed changes. It sounds like you have more important problems to attend to.

I can't recall if you're familiar with davis-stirling.com. This HOA attorney-sponsored site can give you lots of info for CA HOAs. Take a look!

Re: MikeR15, he's posted a lot lately & if you quickly skim them, you'll see a pretty tragic figure.

TanyaW1 (California)
Posts: 15

Posted:

Carol, I am familiar with Davis-Sterling. The site is very helpful.

Thanks a lot for the insights on the CC&R updates. The board has bred so much mistrust that it can be hard to be objective when it comes to anything that might increase their leverage to be unethical. But you are right, the attorney should catch anything untoward. The CC&Rs are 25 years old I think, so long over due based on what you were saying.

We need 2/3 approval from the homeowners. But DS does allow for board to appeal for a lowered % if the homeowners don't participate fully in the vote. This is what concerns me, since it appears the board knowingly benefits from the general lack of participation.

I'll just have to take a deep breath and trust the process and pick my battles wisely.

Thanks again!

JM10 (California)
Posts: 503

Posted:

Hi, Tanya:

I think as secretary you will be able to do at least one thing: accurately record what is happening.

I skimmed through the emails, but I don't think anyone mentioned this.

Your insurance usually has a safety clause which says they do not have to cover any damages, etc. that resulted from breaking California state laws or codes. When I was a member of a HOA, the insurance very clearly stated this and the policy noted that it gave the agency a reason to drop the policy holder. You should therefore also check your full insurance policy. If they send a PDF, that is easy to search.

Second, you should always make a verbal dissent to anything the board does that is illegal. Then make sure that verbal dissent is recorded.

All votes should be recorded. So you would record this not just by numbers (like 2-5), but by the board directors name. This is how a voting record is established.

This does several things. It shows how a particular director has voted and thus whether members would want to support that person as a candidate. It also shows liability. For instance, if you voted against an illegal action or protested an illegal action the minutes should show that the board knew what they were doing was illegal (ignorance of the law is not a defense in any case) and that certain people did not support an illegal action. So should there be a legal problem and the directors are found to have been negligent (willful misconduct) in a manner that is not covered by the insurance, the directors who supported following the law would not be held legally liable.

The Davis-Stirling Act was modeled after the Brown Act which is what journalists call a Sunshine law. You want actions to be so transparent you can see the sunshine or something like that.

For help determining how to write up minutes, particularly for executive sessions, you can usually get copies of your local legislative bodies such as city council or the school board. I went to a community college board meeting and it was very helpful.

CarolR11 (Colorado)
Posts: 2,563

Posted:

Yes, it's not surprising that you & others sou mistrust everything your prez/Board does given their record. But examine each action separately and, as you wrote, pick your battles.

While it will uncomfortable to stay on the board for another 6 months, you can learn a whole lot that way while simultaneously building your base of support to make positive changes. Hang in!

JM makes a good point about minutes and your role as secretary. The Board, of course, approves open meeting minutes at a subsequent meeting. And you can go on record requesting, for example, that the Board adhere to the Open Meeting Act. You can do this with, for example, a motion to comply with that Act. Even if no one seconds or votes on your motion, it must be recorded in the minutes.

Davis-stiring.com has a very nice sample minutes in their Minutes section of their Main Index if you haven't seen it yet.

By the way, I think you'd have gotten more replies from knowledgeable posters if you hadn't had Calif. in your subject line. Some readers easily may have thought that the topic was only about CA state law. But the subject of a secretive Board might attract more replies. There's a lot of good advice available on this Forum! Tap into it.

TanyaW1 (California)
Posts: 15

Posted:

Carol and JM thanks so much for your replies. I've been scouring the site and reading your posts with interest.

What I'm expecting, if I do decide to stay on (or if they don't vote me off), is for them to block me with every accurate minutes I try to record and get approved. That's the fight that seems futile, when I can just direct my energies to rallying support for change as a regular association member - where I can speak freely, communication with fellow association members, question the BOD publicly, etc.

But you're right, each of you, about the benefits of toughing it out regarding official minutes. I guess I'm just doubtful I can really make that happen - even though it would technically be illegal for them to prevent it.

What I do have is detailed email records of two separate violations, including the Open Meeting violation. At least there is that if I ever needed to prove anything. The pattern is documented.

The next board meeting is 8 days away. I'll hold my breath and see if they haven't ousted me by then. I'm realizing a little late that I need to be uber careful in dealing with them.

I do have another question: Now that the CC&Rs update is getting underway, are discussions about it supposed to be conducted in Open Meeting sessions and placed on the agenda? That seems to be the case, since the contract for legal advisement is now a done deal (trying to anticipate what they'd think about it all).

CarolR11 (Colorado)
Posts: 2,563

Posted:

If directors meet to discuss the revisions or restatement of the CC&Rs, yes, the meeting must be posted 4 days in advance, etc., and owners invited. Mind you, probably no one will show up.

If the Board does decide to kick you off, the discussion and vote should be in executive session as it is a personnel matter. You may--dunno if it's a good strategy--suggest to them that many homeowners will be upset that they've umped you.

It is possible they'll remove you from the office of secretary, but keep you on the Board.

TanyaW1 (California)
Posts: 15

Posted:

Ok, thanks for the information, Carol.

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