Recording Meetings, Secret Budget Talks, and a Dictator President

Recording Meetings, Secret Budget Talks, and a Dictator President

Hello Mr. Richardson, Our board announced that audio recordings of meetings would no longer be allowed. What are your thoughts on this? Does this action by the board violate the Brown Act, the Davis-Stirling or some other statute? Thank you, N.D., Rancho Santa Fe Dear N.D., As private organizations, common interest development associations (aka “HOAs”) are not controlled by the Brown Act (which applies to public bodies). The Davis-Stirling Act contains the “Open Meeting Act,” found at Civil Code 4900-4955. The Open Meeting Act does not require that HOA meetings be recorded electronically, but only that draft minutes of meetings be available no later than 30 days after the meeting. I generally recommend against audio or video recording of board proceedings, except in the rare occasion the association has the proper facilities to record and broadcast meetings (typically only in very large HOAs). Recording meetings often creates two negative problems – it intimidates some, and invites others to grandstand. So long as the policy is clearly stated, association boards can take either policy direction. Best, Kelly To Kelly G. Richardson, We have a question concerning our HOA president. The president is running a construction company that controls all maintenance and repairs throughout the community. She runs the community as a dictatorship and no one on the board is allowed to even speak. We have requested financial records – it won’t work. She told us this could no longer be discussed. M.L., Lake Forest Dear M.L., Some HOA presidents simply let the position get to their head. HOA presidents have very little power in most HOAs, aside from calling and chairing meetings. They have...
Improve Your Board Meetings: Drafting a Code of Conduct for the Board of Directors

Improve Your Board Meetings: Drafting a Code of Conduct for the Board of Directors

A common frustration for managers and association boards of directors is dealing with issues that arise out of conflict with individual board members. At some point we have all heard of the board member who is hostile, disagreeable or the proverbial “loose cannon.” Other boards have struggled with how to rein in the director who consistently advances his or her own agenda without regard to the best interests of the association. Finally, there are directors elected, for whatever reason, who feel compelled to reveal confidential information about the association to third parties. Unfortunately, the Corporations Code does not yet contain a provision allowing the board to remove a director for behaving badly. The slap on the wrist that follows improper disclosure or misconduct does little to undo the damage already done. There are, however, viable options available to managers and boards to address misconduct. In most cases, the most direct option to control improper behavior is censure. There is no more effective method of controlling improper behavior than by confrontation by one’s own peers. Like any disciplinary hearing, the director should be advised of the improper conduct committed and be provided with an opportunity to explain his or her actions. The director should also be cautioned that continued misconduct will result in further disciplinary action by the board to protect the association and could include obtaining a court order seeking to enjoin their conduct detrimental to the association. If the conduct committed is improper disclosure of confidential information, the best option is to exclude that board member from executive session meetings, or from receiving executive session material or both....
We Don’t Like Non-Resident Directors, or Pot Farms, in Our HOA

We Don’t Like Non-Resident Directors, or Pot Farms, in Our HOA

Dear Kelly, Are board members required have to own and live on site to become a board member? I am not finding any information on this in my CC&Rs or rules and regulations, and was wondering if you could shed some light on this question for me. Thank you in advance, K.Y., Downey Dear K.Y., Board eligibility standards under the Corporations Code are minimal – a director cannot be a felon and cannot be declared legally incompetent by a court. HOA eligibility standards are usually found in bylaws but can also be found sometimes in the election rules. The Friars Village v. Hansing case from 2013 confirmed that eligibility standards can be placed in election rules, so long as they do not conflict with the bylaws or CC&Rs. Some associations amend their bylaws or rules to bar directors from running for the board or serving as director if they are non-residents, have missed several meetings, are suing the HOA, or have a spouse or co-owner already serving on the board, to give some examples. However, a bill pending in Sacramento may change all that. Senate Bill 1265, authored by Senator Wieckowski, would overturn the Friars Village v. Hansing decision. If SB 1265 becomes law, the only disqualifications for board service will be if the person is not a member, has committed a felony involving financial dishonesty, or is confirmed delinquent after an internal dispute resolution process. If the bill becomes law, all other bylaw provisions regarding board eligibility will be voided, basically amending all bylaws. SB 1265 passed the Senate on May 30 by 25 to 12, and is...
Show Us the Money (Records)!

Show Us the Money (Records)!

Dear Mr. Richardson, Thank you for writing for [our paper]. I find the questions and your answers very informative and useful. Can an owner within a HOA request in writing from the Board that copies of association financial statements be provided on a monthly basis to the homeowner? Or, does the request for the financial statements have to be made monthly? Thank you in advance for your answers. D.G., Redlands Dear D.G., The main statute giving California HOA owners the right to see certain association financial records is Civil Code 5200. Financial statements are included in the list of financial records which can be inspected or copied by members. A member must request copies in writing, and the HOA has ten business days (two calendar weeks) from its receipt of the request to provide the copies. The HOA can charge for copying and mailing the copies. The law does not provide for a standing monthly request for documents, so if you want to see the financial statement monthly, you will need to request it monthly. If you want to review financial records that regularly, run for the board. You’ll get them, most likely, in your board packet each month. An increasing number of associations post financial information on their web sites, in the “members only” area. This provides for transparency, at little cost. Thanks, Kelly Dear Kelly, I appreciate your weekly column in [our paper] and find it helpful. I have been charged with looking into the possibility of establishing an endowment fund for our HOA. We believe there are members of our community who would be willing to make donations...