TPC 209

What would y'all do. I was reading Tx law and see that our board elected someone in a closed meeting.

No. 13 below. Do you let it go? Bring it to the attention of the board? And I'll admit, I am that board member who has been elected in a closed meeting. What is my duty?

(h) Except as provided by this subsection, a board may take action outside of a meeting, including voting by electronic or telephonic means, without prior notice to owners under Subsection (e), if each board member is given a reasonable opportunity to express the board member's opinion to all other board members and to vote.  Any action taken without notice to owners under Subsection (e) must be summarized orally, including an explanation of any known actual or estimated expenditures approved at the meeting, and documented in the minutes of the next regular or special board meeting.  The board may not, unless done in an open meeting for which prior notice was given to owners under Subsection (e), consider or vote on:

(1) fines;

(2) damage assessments;

(3) initiation of foreclosure actions;

(4) initiation of enforcement actions, excluding temporary restraining orders or violations involving a threat to health or safety;

(5) increases in assessments;

(6) levying of special assessments;

(7) appeals from a denial of architectural control approval;

(8) a suspension of a right of a particular owner before the owner has an opportunity to attend a board meeting to present the owner's position, including any defense, on the issue;

(9) lending or borrowing money;

(10) the adoption or amendment of a dedicatory instrument;

(11) the approval of an annual budget or the approval of an amendment of an annual budget that increases the budget by more than 10 percent;

(12) the sale or purchase of real property;

(13) the filling of a vacancy on the board;

(14) the construction of capital improvements other than the repair, replacement, or enhancement of existing capital improvements;  or

(15) the election of an officer.

(i) This section applies to a meeting of a property owners' association board during the development period only if the meeting is conducted for the purpose of:

(1) adopting or amending the governing documents, including declarations, bylaws, rules, and regulations of the association;

(2) increasing the amount of regular assessments of the association or adopting or increasing a special assessment;

(3) electing non-developer board members of the association or establishing a process by which those members are elected;  or

(4) changing the voting rights of members of the association.

By "closed Meeting," do you mean executive session? And that the board members sat around and discussed various candidates? Or were you the only candidate? Were you present?

This is a delicate matter because if you want to serve your community's best interests, you don't want to start out by possibly annoying other board members with your "discovery" that they acted illegally.

Since your board in TX is permitted to take action without a meeting, you might write a casual friendly email to the board members saying something like: "In trying to learn my new job as a director, I accidentally bumped into this in TPC 209: 'The board may not, unless done in an open meeting for which prior notice was given to owners... consider or vote on:... (13) the filling of a vacancy on the board..."'

"I hope it's OK with all of you that I be appointed director at an open meetings or that the Board take action without a meeting to appoint me to later be recorded in the minutes. "

This is just off the top of my head. You want to know your "duty," part of it is to abide by your governing documents and TX law. If it were me, I'd definitely try to correct this "unintentional mistake."

I do always appreciate your advice, AugustinD. I will let this go. I just don't understand why our PM doesn't know the TX laws already.

Might be a good time to read your assn's contract with the manager or management company. Ours, for instance, with a large CA firm does not require the PM to be knowledgeable of CA HOA law (which is substantial).

I see Aug & I agree--our replies crossed--that your appointment to the Board should be referenced and, I might dd, "ratified" at an open meeting. This, of course would be placed in the minutes as would any board action.

Btw, Trista, when does your term end? At the next annual meeting? Or?

I know a number of Association managers that actually know the law, sometimes better than HOA attorneys themselves.

On the issue of appointing directors in executive session, while wrong, happens quite a bit. The issue I have with the appointments, especially when the association has difficulty with making quorum, is you can have a full board that were never elected. This happened where I lived for 8 years, the only people on the board were appointed as "friends of the board".

My opinion is do it the right way - why put the Association and yourself, personally, at risk when the burden is low to do it the right.

For example, I know an Association that appoints the Board officer positions (President, treasurer, secretary etc.), in closed session, each year after the annual meeting, which according to what you cited, Texas law prohibits - it should be done in an open meeting.

If I were on a Board I would not be comfortable with this, and would write a letter of decent, not accept an officer position and possibly resign because if the Association found itself in a legal mess, where all parties are pointing at each other, I would want all "Is" dotted and "Ts" crossed. For example, one could make arguments that an officer, picked in closed session, was not legally in that position and therefore did not have authority to do something that is at the heart of a suit. Perhaps you would prevail, but I would not want to be subject to that extra headache, so I would demand it got done correctly in the first place to mitigate my own personal risk and to avoid hassle.

Think of it this way: doing it right does not cost much as giving proper notice and allowing members to attendthe meeting where the appointment is made is no big burden but the downside, which would be during a legal mess when everything is already stressful, is a much bigger burden. So even though that risk is low, and you do not expect to get into a legal mess, the cost of doing it right is low, so just do it the right way. If other Board members complain that one is requesting it be done right, those other should not be on the Board in the first place in my opinion.

Most say the same thing but the question raised is can/should the BOD make the selection in Executive Session or must it be done in an Open Session?

Trista,

Not knowing the board, I'm going to give them the benefit of the doubt.

Procedure is typically that the board recesses from an open meeting to an executive meeting to discuss the issue (personnel issue). They should then return to the open meeting and make a vote of who to appoint.

I suspect that your board met in executive session to discuss, agreed to a decision and announced the results. Simply forgetting that they should take a formal vote in open session.

I expect that most boards that do follow the proper process would have agreed who to vote for in the executive session. Even if it's a simple question - are we in agreement it's candidate x vs. y or do we want to discuss it more? Typical human nature.

Again, not knowing your board, I'd give them the benefit of the doubt and simply remind them of the procedure (as it likely wouldn't change anything if they officially took a vote). A process of correcting the issue for the future and moving forward.