Executive Session - 3rd party contract

Yes, and what's your question?

James,

I agree with you.

You identified something.
The attorney did their job by trying to explain it away.

How are you going to proceed?

Tim
Not much else I can do other than file it away that if I get elected to the Board this summer, we don't need an attorney like that working for the HOA... I just wanted to make sure it wasn't just me that thought his response was BS

Shelia
This isn't the actual situation but this happens in our HOA from time to time, and is similar in nature. 'A car driving through one of the gates, the gate malfunctions and closes before the car clears the gate and the side of the car is damaged'. The fact that something was damaged is not the topic of my concern. I feel these types of decision are required to be made in 'public' and what I really think happened is the Board either made this decision by email or perhaps only the HOA President and the PMC made the decision and indicated it was the entire Board. (I get the feeling that our Pres and the PMC don't pass everything on to the rest of the board, but I have nothing in concrete to backup that feeling).

If they go down the 'what if' road, everything could lead to a possible contract situation, but they are putting the cart before the horse. Shouldn't they have to make the decision first and then start thinking about how to make repairs?

What else can be done? I think that is about it

No, it was a real situation that happened to me. I didn't really want to get into details on this forum, so I used an analogy to try to clarify and to if it was one of those 'is it just me' moments or did others have the same opinion as me

I don't know how this wound up in an IDR - in our community, the homeowner should notify the property manager, provide whatever information will be needed to notify the master insurance carrier, notify the board to authorize that a claim be filed and then the insurance company does whatever it do. If the homeowner filed a claim with his or her insurance, that's fine. Insurance companies duke it out all the time and in this case, it would appear the association insurance should cover this.

This is a situation that could fall under a policy addressing decisions made outside board meetings - if the board held an emergency meeting on this, it could also adress having a very fir look at the gate go see what repairs are needed, perhaps disable the gate so it doesn't happen again and notify homeowners the gates currently disable until repairs are made. The proceedings of that meeting would be summarized in the next regular meeting and added to the minutes.

Would you agree that's a reasonable approach? No need to have an executive session, homeowners are made aware and the matter is documented accuratelt.

I believe you've had other conversations about your board's apparent lack of transparency and you said you were planning to run for the board. Calling for clarification of when, why and how executive sessions should be done could be part of your election platform. It's helpful to know what others think, but we don't live in your community, so this is something you might want to discuss with your neighbors as you walk the community drumming up support. It's better to discuss things that actually happened as opposed to hypotheticals, but that's just me.

Next time just ask the bloody question or request comments from the start - it saves everyone time

People seem to forget, or not understand, that the PM "works" for/with the BOD and many times the PM is simply doing as the BOD wants.

It’s my take that the topic very well could have been a contract in formation & thus suitable for Ex. Sess. In Ca. BUT that requires 2 days posted notic and the agenda item “Contract in Formation.” If the Board just yakked about it on the phone or emailed one another, they were way out of line and the attorney is wrong.

James, I had a nearly identical 2 year battle with our PMC, attorney and the unconcerned BOD. HOA fees of $7,000+ were paid to the PMC/HOA attorney; I hired my attorney for clarification/ pushback and received the "oops" letter from HOA attorney with the same verbage that board was no longer pursuing the issue; "this is between you and your neighbor."
Evil neighbor moved (yippee) and I became President of our Board.

As President of our Board, when we have a situation like that, we list the topic and the resulting vote under the Consent Agenda in our Board minutes.

The board can only meet in executive session if it is THE FORMATION of third party contracts. They can't meet in executive session regarding the implementation of a third party contract.

Also, denying your claim outside an open meeting is another violation: taking action outside a meeting.

Sorry, I missed some of your replies
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Kerry
I am pretty sure this decision was made basically in a 'secret executive session'. One of the board members blabbed on Facebook that the Board had already met (4) times in executive session this year. Well, we only had (2) regular meetings so far, since we are now on an 'every other month' schedule. I started looking around, and I found an agenda for an executive session only, posted on the Web Portal, a month after the date of that meeting. Also, they never posted the proper 2-day notice that is required for executive session meetings in-between regular meetings.

That agenda had four items:

>>> Contracts and Discussion <<<
Collection Matters
Miscellaneous
Legal

So along with not providing the proper notice, it looks like they are trying to say that the actual decision to install the stop signs was part of the 'Contracts and Discussion' item...

I found an excellent article from an attorney who writes a HOA type blog that is published in several newspapers in S Cal - (KELLY G. RICHARDSON):

"The “contracts” subject is the most misused executive session topic.

Civil Code Section 4935(a) permits executive session discussions of “matters relating to the formation of contracts with third parties.” Many boards and even HOA attorneys overlook “formation,” and focusing only on “contracts” they erroneously expand the use of closed session. “Formation” means the negotiation of the contract, not the decision identifying the vendor with which the HOA intends to form a contract. The selection of the preferred vendor should be in open session and then the discussion of the contract terms (including counter-offer and negotiation strategy) should be in executive session. Finally, budgets are not contracts

https://www.sandiegouniontribune.com/business/story/2021-06-19/hoa-homefront-closed-sessions-often-misunderstood

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Teri
I agree with you, but I already brought up the topic of them denying my claim when I had an IDR with the HOA's attorney being there. The attorney went down the road that it was the formation of a contract thing and what can I do at that point - sue or try to make the homeowners aware of what is going on and get a new board elected.

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Keri
If I get elected, I already know this is not the kind of attorney our HOA should have hired. IDR is supposed to be an informal, meet and confer type situation where you try to resolve a problem. This attorney only made a bad situation worse. He would not answer any of my questions, "I am not explaining the law to you", when I brought up the 5-year statute of limitations or the fact that we had permission in writing from the ARC. Nor did he make any attempt to explain anything. It was his way or the highway. Well he overplayed his hand and the HOA ended up with nothing except about a $15k legal bill (best guess from looking at the monthly ledgers)

You are not this attorney's client. Attorneys are prohibited from giving legal advice to someone who is not their client.

They can give legal information, but the line between "information" and "advice" is often not a bright one.

You think IDR should be done one way. A HOA attorney has to look down the road and protect his or her client's interests. This HOA attorney may very well wanted to force you to lawyer up and go to court. This is the HOA's right.

I presume the attorney was taking his orders from the Board, and the Board's position was to make this hard on you. I see nothing particularly unusual here.

James, it is so clear that a rogue Board has a worthless attorney trying to wear you out. Like you, I thought the HOA attorney was to keep volunteer directors on tract "to do the legal
thing." What I'm hearing (and hopefully wrong) is they work for the BOD (not HOA). Frosting this issue is pityful! Bottom line, get on Board with new quorum Directors who have a strong spine, know your documents, line up/hire a more professional PMC, and return sanity to your community. I hope you are annual elections. Ellen's responses are always clear!

Jackie you hit the nail on the head

At first I thought it was just the HOA president. He was president of a small condo HOA about 40 miles away and during his tenure there that HOA hired his landscaping company to take over the monthly landscaping contract and a couple of years later they replaced their PMC with a new PMC.

In 2020, our community just wanted the old board out and the first 5 people who volunteered to be on the HOA were voted in via write in candidates.(we didn't really know anything about these people) Talk about out of the frying pan into the fire... Two of them resigned withing six months, and you guessed it - the board voted in their replacements

The Pres actually came to my house, unannounced, to inspect my backyard last summer and while he was there he made several statements that were blatantly false – one of them being that we never did receive permission from the ARC in the first place.

At first I thought it was just him and the PMC (this new board that we voted in, hired the same PMC that the president worked with at the other HOA) but then I later realized that the entire Board had to be voting on this stuff...

I thought the HOA attorney was supposed to be loyal to the HOA, not the board or the PMC. (I also found out that our credentialed/experienced community manager quit during that first year and her replacement was the PMC Owner's daughter who appears to have zero experience as a community manager.

It is true that the corporation is the attorney's client, and the attorney is supposed to advise with the best interests of the corporation in mind. But there's often a lot of gray area. HOA attorneys must do as the board wishes, with the limitations TimB4 gave.

Also in my opinion many HOA attorneys promote conflict, since it results in more billable hours.

Jackie, thank you for your kind words.