Posted:
Right, Tim--it's old. I hadn't noticed back in mid-'19 that there was so much interest* in this topic. Or, maybe different readers checked in on it over the years. My dismay in my OP way above was that the Board legally COULD approve a proposed contract in executive session! Worse, they were terming anything to do with contracts as "contracts in formation," e.g., change orders to an EXISTING contract. Even decisions to seek contracts proposals to handle x , y, or z were done in Ex. Sess.
I believed & still do that CA boards may approve a contract in Ex. Sess. based on the opinion of the attorneys at Davis-stirling.com that Tim cites: "...When it comes to approving a contract, the vote itself is part of 'contract formation' and can be done in executive session. However, many boards prefer transparency and, even though not obligated to, vote on contracts in open session." Our Board resumed this practice at the beginning of 2020 with a new much more open Board.*
Even when the Board approves a contract it STILL is "in formation" until "executed" by all parties, i.e., until it's signed. Most of the contracts our Board approves--and we have a lot of vendors and special projects in our twin high rises--are approved with contingencies where sometimes the president or sometimes the PM goes back to the vendor to re-negotiate typically one family nor matter. Approval at the open meeting also often includes the contingency that the HOA GC scrutinize the contract and makes sure the HOA is protected with his changes. They, in other words, are still being "formed."
I read Kelly Richardson's weekly column religiously and admire his work, but I think he's off base here. In Terri's quote, Richardson apparently wrote: "Civil Code Section 4935(a) permits executive session discussions of 'matters relating to the formation of contracts with third parties.'" But 4935 does NOT use the words "discussion"; it uses the word "consideration." In 4935(a) other matters OK in ex. sess. are listed and often involve Board decision, i.e, owner discipline. So, I argue that "consideration" includes Board decisions/approvals. If it did not, "contracts in formation" would have a separate listing in Civ. Code. Also note that Richardson used the word "should". be in open meetings, not "must."
I believed & still do that is the case based on the opinion of the attorneys at Davis-stirling.com that Tim cites: "...When it comes to approving a contract, the vote itself is part of 'contract formation' and can be done in executive session. However, many boards prefer transparency and, even though not obligated to, vote on contracts in open session." In CA HOAs, disclosure of executive session decisions is required in the next open meeting, but it only need say: "The Board approved a contract with CleanWater to maintain our water feature's pumps, motors and lighting."
So, Riley, don't know if you're on the board now or yet, but recall your & others in your HOA having "issues" with the current or then-Board. I think I remember you wanted to see more openness. I do wish contract approval were required in open meetings in CA, but it is not. No, a submitted bid is not "a contract" which needs Board approval and agreement signatures by all parties--in writing is certainly preferred. For lotsa good tips about finding and selecting vendors from whom your Board wants proposals, the Davis-stirling.com site has excellent advice, checklists, etc. This is one part of their site that can apply all over the USA. I added some details below for you, Riley, in case your group is still trying to dump a lousy Board. Why not start a new thread and bring us up to date!
*And I doubt the interest is in my pitiful attempt to try to understand my sleazebag Board's sudden introduction of "ratification" never used in my HOA. I'd not sought reelection at the end '18 due to an abusive , arrogant Board majority. But their secrecy became even worse in '19 without my lone voice nagging them to maintain the several-years of transparency practiced by previous Boards in my HOA. It became so bad and involved a hugely expensive needless (in the view of many) project they adored, that I ran for election in late '19. 2 new board members & I were elected. The abusive, arrogant, wasteful 3 bullies lost reelection! They'd been so sure they'd win that they ddin't bother campaigning. A few weeks later, into our new Board,their "ringleader," who'd been prez for the two years prior, resigned from the 7-member Board.
At our first open board meeting, the Board majority voted for a Board policy by which the Board votes on which contract to accept in an open meeting. That practice, happily, holds steady today.
*And I doubt the interest is in my pitiful attempt to try to understand my sleazebag Board's sudden introduction of a word never used in my HOA. I'd not sought reelection at the end '18 due to an abusive , arrogant Board majority. But their secrecy became even worse in '19 without my lone voice nagging to maintain the several-years of transparency practiced by previous Boards in my HOA. It became so bad and involved a hugely expensive needless (in the view of many) project that I ran for election in late '19. I & 2 new board members were elected. The abusive, arrogant, wasteful 3 bullies lost reelection! A few weeks later, their "leader," who'd been prez for the two years prior, resigned from the Board.
At our first open board meeting, the Board majority voted for a Board policy by which the Board votes on which contract to accept in an open meeting. That practice, happily, holds steady today.
