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Directors talking association business outside of noticed meetings

Started by JanetB9 • 40 replies • 949 views

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JanetB9
Posts: 68
Posted:
What is the point of having civil code about things having to be talked about at a meeting and what have you. We have directors here at my association who don’t care and even though they know they do it anyway. talking about association business in emails on the regular. i am in the minority so even though we call them out on it, they keep doing it. Is there anything that can be done to stop this? Or is it just the way it is. If so then what’s the point of the civil codes? We’re in Sacramento in California.
KellyM3 (North Carolina)
Posts: 2,239
Posted:
Directors do discuss community issues outside of meetings as part of community management. If they're making decisions and policy changes outside of public meetings or authorized online processes, that would be an issue. Likewise, policy debates should be withheld until public forums.

Granted, my opinion comes from having to engage in on-the-ground management issues and the fact I've never been able to stop issues and gossip from being discussed in the community.
MaxB4
Posts: 3,513
Posted:
It is just the way it is, as long as NO action is taken from those discussions. Unfortunately many people in California misinterpret the Open Meeting Act that was re-done starting with the 2012 calendar year. The person I would contact is the US Congressman from your neck of the woods, Mark DeSaulnier, who was in the California Senate and was the author of SB563.
TimB4 (Tennessee)
Posts: 21,059
Posted:
As we know there are criminal laws and civil laws. Only the State and Federal government are authorized to enforce criminal laws (granted a citizen can make a citizen arrest but it's the government that follows through).

The State COA/HOA and Corporate laws that apply to Associations are considered civil laws. The contract (CC&Rs) you entered into with your neighbors when you purchased your home is considered a civil matter. If the parties involved in a civil dispute can't bring the dispute to resolution amongst themselves, the issue is solved within the court system.

Ways to resolve:

1) Talk to the board and see if they will comply
2) Gather support and talk to the board as a group (many complaining vs. one complaining)
3) Gather support and replace the board (through recall or simply don't reelect)
4) If the State has an ombudsman, talk to them (they may or may not be able to assist).
5) Take legal action (talk to an attorney on this one)

MaxB4
Posts: 3,513
Posted:
Quote:
Posted By TimB4 on 03/05/2021 10:52 AM
As we know there are criminal laws and civil laws. Only the State and Federal government are authorized to enforce criminal laws (granted a citizen can make a citizen arrest but it's the government that follows through).

The State COA/HOA and Corporate laws that apply to Associations are considered civil laws. The contract (CC&Rs) you entered into with your neighbors when you purchased your home is considered a civil matter. If the parties involved in a civil dispute can't bring the dispute to resolution amongst themselves, the issue is solved within the court system.

Ways to resolve:

1) Talk to the board and see if they will comply
2) Gather support and talk to the board as a group (many complaining vs. one complaining)
3) Gather support and replace the board (through recall or simply don't reelect)
4) If the State has an ombudsman, talk to them (they may or may not be able to assist).
5) Take legal action (talk to an attorney on this one)


Resolve what?
MarkM19 (Texas)
Posts: 1,459
Posted:
Janet,
When they got elected to the board they did not agree to never talk outside a board meeting to neighbors or board members. Things do come up and casual conversations can't be stopped. Many times over the years I will run things past my fellow board members just to get a feeling if they would support an idea I am considering. I never ask for a vote or any action from them and never expect it. Same thing with HOs who ask me about ideas they have. I always remind them that just because I may like an idea it takes a majority to make things happen.

On my first board many years ago our then President would call me and ask if I could meet him while he was out walking his dog. He would run his thoughts bey me and say what do you think. Usually I would say that it sounded like a decent idea. He would then leave and bring the idea to the meeting. He would get so visibly mad when after hearing everyone's opinion I would not support his idea. I always waited till I heard all sides before making my decision during the meeting. After several of his ideas it was very easy to see that I was the swing vote and he was trying to influence before the meetings started.

MikeM48 (California)
Posts: 13
Posted:
The laws are pretty clear about this, and there is some excellent related information on the Davis Stirling web site.

In my HOA, we have three long term board members that have established a culture of discussing and making decisions by e-mail. They have been doing this for over two decades, spurred on by a bad property management vendor.

In some years they have only had 1 meeting that homeowners can attend.

I am a Board member and am one of two that is trying to get the culture changed.

In our case, the long term Board members basically know what they are supposed to do, but they don't care.

I have engaged about half of our homeowners-- they want change, but prefer to do it via voting new people in. I think we are headed toward a Board recall.

Another approach I have considered is a legal "shot over the bow." That is to engage an attorney, like the folks at Lubin Pham and Caplin to help "motivate" the bad board to either quit or start conducting HOA business properly. I have spoken to Nicholas Caplin at that firm, though not yet retained his services.

I think the key thing is to make sure that goals are clear. If it is simply to ensure that HOA business be conducted in properly noticed meetings that homeowners can attend.... great.

In our case, they are doing e-mail instead of meetings. So we have a pretty bad situation.
TimB4 (Tennessee)
Posts: 21,059
Posted:
Quote:
Posted By MaxB4 on 03/05/2021 11:16 AM

Resolve what?

Any issues or violations of the governing documents or statutes
MarkM19 (Texas)
Posts: 1,459
Posted:
MikeM,
Having conversations is very hard to prove. If they are discussing board business by email very easy to prove. The open meeting act is pretty clear that this is not allowed. If I were you I would see if you can get another board member to agree to have this put on the next Open Meeting agenda. It only takes 2 board members to make this happen. Be prepared to discuss the dangers of this and have the facts to prove your accusations.

Are the Old timers aware that the Rules changed in 2012? If not they need to be reminded.
DouglasK1 (Florida)
Posts: 2,046
Posted:
I'm not sure what the CA code says in detail, in Florida the open meetings law says that "whenever a quorum of directors meets to conduct association business" it's a board meeting and most follow proper notice and access to the meeting. I've taken that to mean any meaningful discussion about association matters, not just motions and actions.

Fewer than a quorum can talk all they want.
Escaped former treasurer and director of a self managed association.
JohnC46 (South Carolina)
Posts: 14,265
Posted:
There are 3 issues. One is discussing issues no matter how. 2nd is agreeing to a resolution. 3rd is voting on and issue. I say One is fine. The 2nd might be crossing a line in some states. The =third does cross the line is some, but not in all, states.
MaxB4
Posts: 3,513
Posted:
Quote:
Posted By JanetB9 on 03/05/2021 9:17 AM
What is the point of having civil code about things having to be talked about at a meeting and what have you. We have directors here at my association who don’t care and even though they know they do it anyway. talking about association business in emails on the regular. i am in the minority so even though we call them out on it, they keep doing it. Is there anything that can be done to stop this? Or is it just the way it is. If so then what’s the point of the civil codes? We’re in Sacramento in California.

Has any action been taken by email, and outside of a meeting? Don't take our word for it, please the actual act, tow or three times if you have to. Any questions, email the author on his interpretation of his bill.

Here is a summary of the bill and before it got re-interpreted a hundred times.

Open Meeting Act. S.B. 563 amends Civil Code §§1363, 1363.05 and 1365.2. (1) The bill requires that boards now give notice of executive session meetings at least two days prior to meetings that are solely in executive session, i.e., not in conjunction with an open meeting. The notice must contain an agenda for the meeting. (2) 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. (3) Board meetings can be held electronically if it includes at least one physical location where members can attend and at least one member of the board of directors is present at that location. All board members and homeowners must be able to hear one another.
DouglasK1 (Florida)
Posts: 2,046
Posted:
Quote:
Posted By JohnC46 on 03/05/2021 1:32 PM
There are 3 issues. One is discussing issues no matter how. 2nd is agreeing to a resolution. 3rd is voting on and issue. I say One is fine. The 2nd might be crossing a line in some states. The =third does cross the line is some, but not in all, states.

I dug into Davis-Stirling to get some CA specific info. A board meeting is defined thus:
"A congregation, at the same time and place, of a sufficient number of directors to establish a quorum of the board, to hear, discuss, or deliberate upon any item of business that is within the authority of the board", there is also a provision for teleconference meetings.

My take is that if less than a quorum is discussing association business, that would be allowed.
Escaped former treasurer and director of a self managed association.
JohnC46 (South Carolina)
Posts: 14,265
Posted:
Janet

Remember this is a diverse crowd. We are not all in CA. CA and FL are the the most "controlling" states when it come to owner associations.

SC Non-Profit Corporations (what most HOA's are) Rules and Regulations (and the For Profit also) are riddled with "unless ones Bylaws say different". SC believes in letting BOD's control.
JanetB9
Posts: 68
Posted:
They are talking all three of them about all sorts of association matters via emails back and forth. Sometimes they decide, sometimes they just discussing trying to prove their points. I understand the civil code just like Douglas states it from the Davis Stirling Act. These three old timers say hush and they will do as they want.
KerryL1 (California)
Posts: 14,550
Posted:
Any bets, Tim, what Max's names used to be?
KellyM3 (North Carolina)
Posts: 2,239
Posted:
Hi there, Augustin!
KellyM3 (North Carolina)
Posts: 2,239
Posted:
Quote:
Posted By JanetB9 on 03/05/2021 2:40 PM
They are talking all three of them about all sorts of association matters via emails back and forth. Sometimes they decide, sometimes they just discussing trying to prove their points. I understand the civil code just like Douglas states it from the Davis Stirling Act. These three old timers say hush and they will do as they want.

The Old Timers won't stop talking about HOA matters among themselves. For many, HOA operations are an addiction and they must stay engaged, stressed, complaining or inspecting.

I wouldn't care as long as votes are taken at open meetings and in accordance with the law.
KerryL1 (California)
Posts: 14,550
Posted:
What size is your Board, Janet? It sounds like 5. When you write that sometimes they decide, what do you mean? They vote via emails? how do these votes get into minutes? Please provide 2 examples of things they "decided" and whether those things got done

What kinds of things do they discuss?? Give examples. How do you know they do this?

I agree with you, Janet, that a quorum of directors in CA HOAs may not discuss or deliberate about upcoming HOA business except at properly noticed meetings. I honestly don't know what penalties there are, if any. Try looking up that question at Davis-stirling.com. Maybe "Violations of the Open Meeting Act."

But if they oppose you on everything, it won't matter if they "meet" when they're not supposed to--they'll oppose you anyway.

What size is your HOA? Do you have a property mgr.?

Tim hs some good ideas, but CA has no ombudsman (I don't think). I sympathize with Mike too. In both your cases, and what worded here with abusive secretive boards was go gather support and vote out the jerks.

JohnC: Some of us in truly open meeting states call them "owner-friendly" states, not "controlling" states.

Kelly--Nope--I'm guessing it's not Augustin.

JohnC46 (South Carolina)
Posts: 14,265
Posted:
Kerry

SC is BOD friendly. SC will side with business owners versus the employees. SC is a right to work state which means anti-union.

I am not defending SC. I am just stating the way it is. Personally those things are contrary to my personal thinking but they are what they are and being on the BOD makes me thankful that SC stays out of our way.

Is the glass half full or half empty? The answer depends on what my job is.
KerryL1 (California)
Posts: 14,550
Posted:
To me, a long time HOA director & officer, my open meeting state is a glass half full.

Homeowners are not employees by any stretch, nor are they comparable to union or nonunion workers. Not sure why you used those terms.
MikeB23 (Louisiana)
Posts: 109
Posted:
10 year member of condo HOA Board with 6 members. We discuss issues among each other all the time, why not? When there are decisions to be made we make those at meetings and keep minutes. Would you have the Board have a formal meeting when one member learns of a new owner and is notifying the secretary? That is just nonsense.
MikeB23 (Louisiana)
Posts: 109
Posted:
10 year member of condo HOA Board with 6 members. We discuss issues among each other all the time, why not? When there are decisions to be made we make those at meetings and keep minutes. Would you have the Board have a formal meeting when one member learns of a new owner and is notifying the secretary? That is just nonsense.
KerryL1 (California)
Posts: 14,550
Posted:
Why would a quorum of the Board need to talk about the fact that you have a new member? Unclear. Board business means items that require decisions by the Board.

LA may not have statutes about open meetings, so it's fine if a quorum of the Board even meets and pretty much does everything but vote on association business outside of noticed board meetings.
MaxB4
Posts: 3,513
Posted:
Quote:
Posted By MikeM48 on 03/10/2021 10:39 AM
I am an HOA board member. We have three long term incumbents and a long term PM. They have a terrible track record regarding transparency and open meetings.

What I am doing is registering my objection each and every time I am looped in on HOA board e-mails that are not appropriate, and forwarding the e-mails to 1-2 additional e-mail addresses so I have redundant documentation.

Soon I will forward all inappropriate e-mails to an special e-mail address with a simple password, then once a month send an message to the membership that includes the e-mail address and password so they can log in and read all of the e-mails. When I do this I will admonish the other Board members that it is being done.

Of course I will not include e-mails that are truly "board confidential" or are in the category of attorney-client privilege.

I have a duty to ensure that our HOA's business is conducted in ways compliant with gubmint laws and our governing documents.

If fellow board members refuse to conduct business withing compliance, homeowners will be able to decide whther to vote for them in future elections or to perhaps recall the entire board and start with a fresh slate.

On my Board, you would be censured in a heartbeat!
NpS (Pennsylvania)
Posts: 4,216
Posted:
Quote:
Posted By MikeM48 on 03/10/2021 10:39 AM
I am an HOA board member. We have three long term incumbents and a long term PM. They have a terrible track record regarding transparency and open meetings.

I think that track record on transparency is an "eye of the beholder" kind of thing.

Here's how CAI defines "governing with transparency" in a new 2021 publication: “Share critical information and rationale with residents about budgets, reserve funding, special assessments, and other issues that impact their financial obligations to the association. Give residents an opportunity to ask questions and engage in dialogue on these matters.”

Do you agree with this CAI definition?
Sikubali jukumu. Read all posts at your own risk.
MaxB4
Posts: 3,513
Posted:
Works for me.
NpS (Pennsylvania)
Posts: 4,216
Posted:
Quote:
Posted By MaxB4 on 03/10/2021 2:03 PM
Works for me.

So which of these things aren't they complying with?

And do you think you can get them to come into compliance?

It seems to me that you are setting yourself up as the opposition. Just wondering if you can find something to work on together that will improve messaging to the community.
Sikubali jukumu. Read all posts at your own risk.
KerryL1 (California)
Posts: 14,550
Posted:
Good questions to Janet NpS, but she's not replying lately it seems.

Mike of CA. I thin you should start a new thread. In it tell us how many are on the Board and what size your HOA is, OK?
MaxB4
Posts: 3,513
Posted:
Quote:
Posted By NpS on 03/10/2021 3:03 PM
Posted By MaxB4 on 03/10/2021 2:03 PM
Works for me.


So which of these things aren't they complying with?

And do you think you can get them to come into compliance?

It seems to me that you are setting yourself up as the opposition. Just wondering if you can find something to work on together that will improve messaging to the community.

I was agreeing with the article
MaxB4
Posts: 3,513
Posted:
Quote:
Posted By MikeM48 on 03/10/2021 4:21 PM
"On my Board, you would be censured in a heartbeat!"

Why would I care?

Our HOA By-Laws state that meetings shall be monthly, or at least once within every three months. Our long term incumbents have not been adhering to these requirements for over two decades. In some years they have had just 1-2 meetings.

By contract, the PM is limited to $500 in spending without Board vote. $1k in an emergency, only after they have tried to contact at least two directors. They have frequently breached the contract. All documented.

In many instances, the breaches were committed by awarding business to the long term incumbent board president's company-- usually without even a quote, let alone any competitive quotes.

The long term board incumbent president has been a contracted vendor to the HOA for over 15 years, and during those years her company has frequently benefited from the award of non-contracted business by the PM, without the knowledge of other board members, including yours truly. And as I said, many times the size of the business exceeded the PM's spending authority several fold.

The long term incumbent board president's business(es) share HOA clients with the PM. They are in a position to refer business to one another and thereofre to protect one another.

Two examples:

2016
The last board meeting of 2015 was in August. The next meeting was not until March 29, 2016.

In early March the insurance renewal was due. All discussion was via e-mail as the incumbents were accustomed to doing biz that way. Two board members had questions about the quote which was between $50 and 60k. They all just refused to meet. The result was that the PM just told the insurance broker to "go ahead." No board vote. No official approval. No records or minutes.

2017
The HOA undertook a $250-300k reserve project. No board vote on any contractor's quote. The contractor was reluctant to start. The long term incumbent board president just said "go ahead" by e-mail. No board meeting. No records. No discussion about the quote.

The PM has stated that he will breach his contract by spending beyond contracted limits without proper board approval any time he wants. Including awarding biz to the long term incumbent board president's business(es).

The laws in CA are clear about open meetings and transparency. One approach to "correct" the culture of such a bad board is to share with homeowners:

1. How business is supposed to be conducted. The Davis Stirling web site is a great resource for this. There are others as well.

2. How business has been historically conducted.

3. How business is being conducted by e-mail. They have a right to the e-mails since the board refuses to meet. The e-mails are also discoverable should there be litigation.

When homeowners get better informed in all three of these areas, they can be better-informed voters in HOA elections. Normal elections and/or recall elections.


SO, why are you telling us here, AND not your homeowners?
KerryL1 (California)
Posts: 14,550
Posted:
Say, Mike for CA folks, c will you please site the current correct Civil Code #s instead of the very old ones? That way, interested readers can review them for themselves.

In 2006 and then again in 2019, our HOA of 200+ condos kicked the incumbents off the Board with their votes at the Annual meeting. In 2019, we achieved the Board majority AT the election, in '07, it took a year to get the Board majority.

It took a lot of work, letter writing and campaigning, but it worked and cost almost nothing. In addition, our GMs worked for management companies so were pretty amenable to following the Open Meeting Act. Don't think there was any wrongdoing going on in that regard. Just lots of Board secrecy & untruths in our monthly newsletters written by the former prez. No, she didn't get voted out, but when her buddies did, she resigned a month later. Was wonderful.

So your PM makes your situation trickier. Are you saying that your Prop.mgr is a direct employee of your HOA? Have you read the contract between the PM & your HOA? Is there any way you can nail your PM based on the contract or their prof. org.'s Code of Ethics or whatever?
MaxB4
Posts: 3,513
Posted:
Actually the topic was Directors talking association business outside of noticed meetings. Talking and taking action are two things. You should read twice SB323 and then speak to the author of that bill to understand exactly what the bill's intentions were. They weren't about talking between meetings, it was all about transparency. It was about Action without a Meeting and not placing into the minutes the actions that were taken. I am sure that happens all across the country, not just California.

I am sorry, but the culture you describe is commonplace in California, and going to the CA AG, well, not going to go very far. Go through Civil Court, have deep pockets, Small Claims, good luck with that.

Unfortunately, SB323 created more of a mess than corrected the issues at hand. As such, most HOA's have not complied with the election requirements, but are able to kick the can down the road all in the name of the pandemic.

But, in all fairness, best of luck in the hope of finding the Holy Grail.

MaxB4
Posts: 3,513
Posted:
Looks like someone got MikeM48 booted off , just like they have done others.

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