Board meetings & lawyer issues

Started by DianeW • 32 replies • 2819 views

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DianeW (Maryland)
Posts: 147

Posted:

At our last board meeting it was agreed we need to get legal help with questions we have regarding lien enforcement and possible foreclosure on liened lots. Our developer is our primary culprit here. We want to have another meeting now to draft our questions to take to the attorney in order to save time and expenses when meeting with the attorney.

My questions is: We know the meeting must be posted but must it be open to all as well? Litigation is not pending but we have contacted a lawyer in the past regarding these same issues and plan on moving forward with litigation at this time.

JohnO6 (Georgia)
Posts: 424

Posted:

Check your by-laws regarding Executive Session meetings of the BOD. The reasons and process for such sessions are generally described. In your case look for statements regarding legal issues/litigation that the HOA is either engaged in or "could be engaged in".

Your answer should be there.

DonnaS (Tennessee)
Posts: 5,671

Posted:

Diane,

This is the only legitimate reason that the State allows for your Board to NOT!! have this meeting open to the members. Make the appointment with the attorney and have at least a quorum of the Board present. Better if they all attend but at least a quorum.

Statute 720: 303,(2a)2) BOARD MEETINGS.--

(a) A meeting of the board of directors of an association occurs whenever a quorum of the board gathers to conduct association business. All meetings of the board must be open to all members except for meetings between the board and its attorney with respect to proposed or pending litigation where the contents of the discussion would otherwise be governed by the attorney-client privilege.

This is only 1/2 of the paragraph but all that pertains to your question.

SusanW1 (Michigan)
Posts: 5,202

Posted:

Establish a committee and they can meet to formulate questions for the attorney. You should invite some homeowners anyway and maybe even some outsider(s) to help you draft the concerns.

I don't know what the obligations is to announce and/or committee meetings to your general members, but I would think it would be of benefit to have open discussions (of course, you are not going to release names or address of the dellinquent persons. You are trying to get some policies and procedures established)

DianeW (Maryland)
Posts: 147

Posted:

We do know the meeting of the Board with the attorney is "closed" but my question pertained to the premeeting discussion to organize ourselves prior to our meeting. One interpretation of state law was that since this will involve litigation, the meeting should be closed, and the other thought is that since a lawyer will not be preset, that the meeting should be open. Our by-laws leave it open for interpretation. I do agree that certain community members could contribute greatly to the meeting. Since there will be no lawyer present, it does appear that we are legal to hold an open board meeting as long as no names are discussed.

Unfortunately, the entire neighborhood knows who we will be seeing the lawyer in reference to.

Thank you all.

TracieS (Colorado)
Posts: 460

Posted:

Quote:

Posted By DianeW on 10/20/2009 11:48 AM
Unfortunately, the entire neighborhood knows who we will be seeing the lawyer in reference to.

Thank you all.

NO...they don't!! They just THINK they know...

AnnaD2 (Florida)
Posts: 960

Posted:

Diane, follow what Donna says, and keep it just with board members. At a later meeting you can openly discuss how you're going to proceed with lien and foreclosure action.

Post a notice that the board of directors is meeting for an "executive session" with the association attorney; include the date time, etc. Include in the notice a statement that the board is meeting to discuss legal matters and in accordance to the Florida Statutes this meeting is not open to the members of the association.

Minutes from that meeting DO need to be recorded and kept; but not distributed to the general membership.

Good luck!

AnnaD2 (Florida)
Posts: 960

Posted:

Oh, now I see what you're saying....I was writing while you were posting.

Sure! Discuss it at an open meeting. All you need to say is that the board needs to set up a strong collection policy that will involve the help of an attorney....then proceed with your "general" discussion.

DonnaS (Tennessee)
Posts: 5,671

Posted:

Diane,
A "premeeting" for the members input sounds to me like a very poor idea. Questions to the attorney are what the Board should prepare ahead of time but not with the members jabbering away. Some will call for heads to fall, they might become too angry because of having to spend association funds, etc. You also gave us conflicting statements that this is not pending.

You said "Litigation is not pending but we have contacted a lawyer in the past regarding these same issues and plan on moving forward with litigation at this time."

The Statute reads "except for meetings between the board and its attorney with respect **** TO PROPOSED OR PENDING LITIGATION *****where the contents of the discussion would otherwise be governed by the attorney-client privilege.

I don't see where this is vague in your case. This is not a neighborhood decision to be made but the Board's call

DianeW (Maryland)
Posts: 147

Posted:

Donna, I agree with you and unfortunately was overruled by the President and Secretary. The meeting has been posted and is open. I didn't agree so posted here to satisfy myself I was correct or not.

We contacted an attorney in 2008 regarding this individual and heard nothing back from him. Very long story I don't need to detail. But the Board had no by-laws at that time so we set to task of getting them. We now have by-laws and plan on moving forward with a different attorney. I explained that I felt it was allowable to have a closed session because of the proposed litigation but because the meeting is not with the attorney, they went ahead and posted the open board meeting. Unless I can find where it is expressly stated that we must have a "closed" session when discussing this, my hands are tied at this point.

Again, thanks for everyone's input.

DonnaS (Tennessee)
Posts: 5,671

Posted:

Diane,

The best that you can do is to hope that the Board does not lay all of their cards on the table in front of the membership. Yes there are issues that the membership is entitled to know and are public record but someone should be required to read and interpret the Statutes correctly. That is the Board that I am referring to. Good luck with this.

MaryA1 (Arizona)
Posts: 7,043

Posted:

Diane,

IMO, if the board is meeting to discuss proposed or pending litigation without the presence of their attorney it is not a meeting that qualifies as a closed session. An attorney must be present for any attorney-client privilege discussions!

DianeW (Maryland)
Posts: 147

Posted:

MaryA1 - Are you saying that even if we had already contacted the attorney, that unless he was present we would be unable to discuss the case at a closed board meeting? That seems a rather hard interpretation.

AnnaD2 (Florida)
Posts: 960

Posted:

Diane could you please do us all a favor and post after your board meeting? I'm sure we'll all be interested in how your meeting goes/went.

Years ago we initially had a meeting where we decided how we would handle delinquent owners. THAT meeting was out in the open....all others were executive session when dealing with legal/lawyer issues.

If anyone at your meeting screams because you're using association funds to pay an attorney remind them that you have a duty to collect delinquent funds....or THEY will have their maintenance fees go up to pay the fees of the non-paying members.

DonnaS (Tennessee)
Posts: 5,671

Posted:

Diane,

No you may not discuss it at an OPEN meeting but must be closed or as others call it, executive session. Discussion of any pending litigation is closed. It's in the Statutes.

MaryA1 (Arizona)
Posts: 7,043

Posted:

Diane,

According to the statute which Donna posted, it explicitly says ". . .meetings between the board and its attorney. . ." The way I interpret it is that there are no grounds for a closed session if the attorney is not present. AZ law is not that explicit in that it only says "legal advice from an attorney and pending and contemplated litigation" with no mention that an attorney must be present at the meeting.

DianeW (Maryland)
Posts: 147

Posted:

We had our meeting tonight and it went well. We only had 3 homeowners attend besides the board. Unfortunately one of those members is a good friend/employee of the owner we were discussing. Although no names were mentioned, he was well aware of who we were discussing and what our intentions are. We are going to an attorney with the option in mind to head towards foreclosure on this owners lots - one by one until all 45 are accounted for. We'll see what transpires now.

MicheleD (Kentucky)
Posts: 4,491

Posted:

Best of luck to you.

Also, chances are the homeowner about whom you were discussing probably already knows what to expect for not paying his assessments.

My guess is he/she is probably surprised it has taken this long!

DianeW (Maryland)
Posts: 147

Posted:

Just a quick addendum to my question. Today we had our meeting with the lawyer and asked the question about closed meetings. In Florida, a closed meeting can ONLY occur when you are discussing litigation with an attorney present. All other meetings must be open to all. We had 3 of our 4 board members present. Initially only 2 of us were going to be attending so as not to constitute a quorum and at the last minute, a third decided to come as well. We were technically not supposed to do that since the closed meeting with our lawyer had not been posted prior to the meeting. But our meeting was productive and we now have a lawyer working with us as we proceed with our actions re liens and foreclosures. Step in right direction!

DonnaS (Tennessee)
Posts: 5,671

Posted:

Gads Diane,

Would you please ask your lawyer again when a meeting in Florida can legally be closed to the members.

This is what you said---"We were technically not supposed to do that since the closed meeting with our lawyer had not been posted prior to the meeting. But our meeting was productive and we now have a lawyer working with us as we proceed with our actions re liens and foreclosures. Step in right direction!

You do NOT post meetings with the lawyer unless it is an OPEN MEETING with the membership in attendance. In your case, the lawyer meeting is legally a closed meeting.

AnnaD2 (Florida)
Posts: 960

Posted:

Hey Donna! We always post our Executive Session Meeting Notices. We make it in very bold print stating that this is a CLOSED meeting because we will be discussing legal matters.

That also explains why some people may see three or four of us piling into one car and taking off together.....so it doesn't appear that we are sneaking off together to have a "secret" meeting somewhere offsite.

DianeW (Maryland)
Posts: 147

Posted:

The board cannot meet in a closed meeting unless the attorney is there and you are discussing pending litigation. We also were supposed to post that we were going into a closed session because of the meeting with the lawyer - but that part didn't happen because the other officers present did not realize it needed to be posted and I hadn't known there would be a quorum present.

All meetings must be posted prior to the meeting and can be closed only if your lawyer is present to discuss litigation.

MaryA1 (Arizona)
Posts: 7,043

Posted:

Diane,

Whether or not the closed meeting must be posted is dependent upon how the open meeting law is worded. In AZ meetings of the BOD must be noticed 48 hrs prior to the meeting. It does not say a notice is not required if it is a closed meeting; therefore, ALL meetings should be notied whether open or closed.

I'm a little confused as to whether or not your meeting was closed. Per your statement about the FL open meeting law, you meeting should have been open because the board was not discussing litigation with your attorney.

You mentioned needing info on lien enforcement and foreclosure and said your developer was the main culprit. Is the developer still in control or does he just still own a few lots/homes?

DianeW (Maryland)
Posts: 147

Posted:

MaryA1: This is the law for FL. I certainly have no knowledge of any other states. I am confused by your question about the meeting being open or closed because my original question was for the board meeting last Monday. It was open to all because, although we were discussing proposed litigation, there was no lawyer present. Today's meeting was closed, board quorum and lawyer, to discuss proposed litigation.

Your next question dealt with the developer. He has relinquished control as of early 2006 but still owns a large block of lots so is responsible for dues and assessments as are all owners.

GlenL (Ohio)
Posts: 5,491

Posted:

Diane since you didn't deliberately have a meeting without posting it I wouldn't beat yourself up over it just don't do it again. Since the H/O's wouldn't have been able to attend it anyway you IMO did them no harm. Yes if they find out they can file a complaint with the DPR (or whatever it's called) but I seriously doubt they would do anything other than tell you not to do it again unless your HOA has a history of violating the posting rule.

Studies show that 5 out of 4 people have problems with fractions

SusanW1 (Michigan)
Posts: 5,202

Posted:

Usually, the board meeting is called to order. THEN a motion to go into "closed session" is taken, with the purpose stated. Then the board goes into the session, closes that and then comes back to regular meeting. Any action motions should be announced then and put into the minutes of the regular meeting. Even if there was no acrtion, that should be stated for the minutes.

I've never heard of a gang of board members getting into a car and driving off to a "closed meeting."

MaryA1 (Arizona)
Posts: 7,043

Posted:

AZ has an open meeting law which allow for closed meetngs for 4 particular reasons. However, it is not required to first meet in an open session and it is also not required to announce in an open meeting any actions taken in a closed session. If only a closed session is to take place that would be stated in the notice so that any member wishing to attend won't bother. Otherwise, members might show up only to be told to go home "we are adjourning to a closed session." Different states may have different requirements.

I suggest state laws and bylaws be read very carefully. If there is no state open meeting law and the bylaws are silent, then the board may do as they wish and adopt whatever rules they like governing a closed session. There is no right or wrong way, unless a procedure is outlined in the bylaws or state law.

DonnaS (Tennessee)
Posts: 5,671

Posted:

Mary,
Right on the explaination except that Carol IS in Florida and she does have Statutes that tell her exactly when a meeting is open or closed.

DonnaS (Tennessee)
Posts: 5,671

Posted:

Mary,
Right on the explaination except that Carol IS in Florida and she does have Statutes that tell her exactly when a meeting is open or closed.

MaryA1 (Arizona)
Posts: 7,043

Posted:

Donna,

I was really commenting on Susan's message where she stated how a closed session must be conducted.

Just like the AZ open meeting law, I don't believe the FL statute states how the closed session must be handled. For ex: whether the board must meet in an open meeting first then adjourn to a closed session; whether the actin taken in a closed session must be reported in the next regular session, etc.

AnnaD2 (Florida)
Posts: 960

Posted:

Hi Mary! Hi Susan! Florida can ONLY have closed (executive session) meetings with their attorney. Our attorney doesn't live at our complex so all of our closed (executive session) meetings are held in his office---eight miles away. We never call a regular board meeting, close it for a "private" meeting" then reconvene.

Yes, we DO pile into cars to go to the attorney's office. Different laws/statutes for different states. None right/none wrong....just the way it is.

DonnaS (Tennessee)
Posts: 5,671

Posted:

Anna,

Thanks for jumping in here on this issue of closed sessions--with or without the attorney present.

In the case of my HOA that went to court with the pick-up trucks, we never, ever posted any meetings that the Board was having with the attorney. We are not required to do so. Court suits are like tennis matches. They served, we served back. At $200.00 per hour for legal fees, when the lawyer called, we all jumped into action. Sometimes there was no time for proper notification of a meeting, even if it was required by Statutes---WHICH IT IS NOT.

To wait until a Board meeting and then "close session" it was impossible because of the urgency at times to make a decision on what to do next. Also, these lawyers are not just working on your single case. You are their mercy for time and being available when needed is a primary.

Not this is a vital part of this discussion but the Florida Statutes do not have the words "executive session" anywhere in them. Mettings are open, closed, emergency or special,and that's all.

MaryA1 (Arizona)
Posts: 7,043

Posted:

Anna & Donna,

Some people refer to closed meetings as executive session, but AZ law also refers to them as closed.

The AZ open meeting law requires ALL meetings of the board to be noticed, so that would also apply to closed meetings, except if emergency circumstances require action by the BOD b/4 notice can be given.

Of course, I have to comply with AZ law; however I find it interesting to know what other states require.

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