Remote Opening of Gates, Obtaining Agendas and Minutes

Dear Kelly, Our board members look forward to reading your columns with great interest. A question was recently posed regarding residents using cell phones to allow entry into our gated, but not guarded, community and the safety issues that may arise; especially, since a cell phone can actually be operated from another location or even another state to allow entry. Nowadays, many people opt to use cell phones over landlines. Is there a civil code that prevents HOA’s from requiring residents to use only landlines for allowing gate entry to non-residents? V.H., Cherry Valley Dear V.H., Technology has brought about a whole new area of questions. Cellular phones are increasingly replacing “land lines,” and younger persons (my children included) often only use their cellular phones as “home” phones. The ability of a homeowner or tenant to “buzz” in a visitor from anywhere is of course very convenient. I am unaware of any law limiting such systems to only land line use. If your association board is concerned about use of the gate from a location other than the residence, then perhaps a different entry system needs to be considered. Common area systems, such as gates, are ordinarily the responsibility of the board of directors, although if a major access change is under consideration, it might be a good idea to notify members that it is under consideration, and seek input from the members. Best,Kelly Kelly, Thank you for your articles on HOA’s in the paper. I would like to receive from the Board the meeting agendas, and after the meetings the minutes and how each board member voted. Is...

Open Meeting Act

Mr. Richardson, Our HOA has regularly scheduled, monthly, closed meetings. Based on your columns this doesn’t seem right to me. What types of topics are to be considered in closed session? S.C.,Temecula Dear S.C., Closed session is strictly limited to a very few topics. It is for discussion of personnel matters (if the HOA has employees), litigation, certain member issues (discipline, foreclosure votes, or payment plan proposals), and “formation of contracts”. If it is not under one of those four categories, it cannot be discussed in closed session. Some associations construe “formation of contracts” very broadly, and change vendors in closed session. However, the formation of contract is different than the selection of the vendor. The vendor selection comes first. That discussion should be in open session. After selecting the vendor which the Board prefers, then the negotiation of the contract ensues, and discussion of negotiation terms should be in closed session. The fact that your HOA board meets in closed session each month does not necessarily mean it is abusing closed session. Larger associations often need a closed session each month, because they have disciplinary hearings and foreclosure votes almost every month. Thanks for your question,Kelly Dear Kelly, We are probably the first (mobile home) park in California to be owned by the members. The corporation which we are now governed by a Board of Directors and our meetings are held every month. We have a nine member Board of Directors voted by the members of the park. Your article regarding Open Forum is at question to some of the members. Our important question to you is, are...

Bad Board Meetings, Settling the Debt

Mr. Richardson, There are Board meetings taking place with little or no advance notice to anyone other than the Board Members. We never have a formal agenda published and minutes of these meetings are not properly documented for circulation to the homeowners. No open forum time is allowed for homeowners to voice their concerns. My question is, what course of action may we take as individual homeowners to insure our Board is following the protocols required by the laws applied to homeowners associations in the State of California? Any input or direction from you is appreciated. Cordially, J.E., Blyth Dear J.E., Boards ignoring the Open Meeting Act (Civil Code 1363.05) are at peril in many respects. Perhaps most important is the failure to respect neighbors, and to lose their trust. Such associations are fraught with conflict, and prone to a poor relationship between board and community. If proper corporate process, including that required by the Open Meeting Act, is ignored, then the decisions of the association might even be set aside by a court. Some would advocate legal action, but frankly, in poorly run associations this rarely accomplishes permanent change. Instead, consider mobilizing your neighbors and elect a new group of volunteers who will respect the process and the community. Perhaps also join CAI. Failures of transparency can take many forms: Failing to publish agendas in advance, abusing closed session, not keeping minutes, or deliberating outside of board meetings. Such failures are all bad for the HOA, and bad for the board. Good luck,Kelly Hello Kelly, I have a question regarding past HOA dues. I have successfully modified my mortgage and am now in...
Corporate Process Is NOT Your Enemy!

Corporate Process Is NOT Your Enemy!

In community association governance, corporate formalities seem to get in the way of “good old common sense.” If someone is doing a good job, and is making good decisions, why allow procedural technicalities to interfere? In almost 30 years of law practice, I find that clients view corporate formalities as a curse and try to avoid dealing with it as much as possible. However, the process is very important to you. Why the Process? The corporate process is there to protect you volunteers and managers. It documents that the actions are by the corporation and not you personally. California law does not recognize actions as corporate if the procedures are not followed. So, a failure to follow proper corporate process may be that an obligation thought to be corporate may be imposed upon the individual who failed to obtain proper corporate approval. That could result in the imposition of personal responsibility for an obligation intended to be corporate. Scrupulously following proper procedures avoids that nightmare. Corporate Action vs. Individual Action Corporations are legal fictions recognized by law as “persons” which act through authorized agents, normally a board of directors. Actions outside the corporate authority are called “Ultra Vires,” a Latin term meaning “outside the powers.” In small corporations, certain officers often act as the primary agents. However, officers have only the powers stated in the bylaws or expressly granted by board. If the officer acts outside those powers, the action is not corporate action. The Importance of Minutes Minutes document the board’s decisions, and should also document any authority to act given by the board to a director or manager....
Open Forum: The Misunderstood Gem

Open Forum: The Misunderstood Gem

Is Open Forum a necessary evil, or a valuable part of your board meetings? The law requires Open Forum to be a part of every open board meeting, under Civil Code Section 1363.05 (aka the “Open Meeting Act”), but often is misused and misunderstood by homeowners, boards and managers. Open Forum can be a powerful and valuable part of an orderly board meeting, but it should not be unlimited, nor continuous throughout the agenda. Open Forum is often viewed negatively because it is not being used properly, and members and directors do not observe appropriate boundaries. Here are some tips to enhance Open Forum as a valuable community communications method. Adopt written meeting rules to inform all attendees how Open Forum works, and incorporating the suggestions below. Have copies of the rules available at meetings. Open Forum is the only part of the meeting when members speak to the board. This part of the meeting is reserved for member remarks only. Directors should never interrupt the speaker, and speakers should understand that directors will not respond to them during their Open Forum remarks. Open Forum should not be a time for arguing or interrogation. Implementation of this might take not only a statement in the rules, but also some patience as all learn the discipline of respecting these boundaries. There should be reasonable time limits on Open Forum remarks. Most associations allow three minutes. If a large number of owners wish to speak, the time can be shortened to two minutes, so all have time. Open Forum comments, just as any speaking during a board meeting, must be subject...