Forms no substitute for board meetings

Question: Since our Los Feliz-area homeowners board hired an attorney six months ago, it has not held any meetings. Instead of minutes, the board circulates an “activities update” and continues to make decisions using unanimous consent forms.

My requests are met with letters from the lawyer stating, “You are to direct all communications to this law office.”

The association has been sued twice in Small Claims Court for failure to keep and produce books and records. Attached to each activities update is a form titled “Action by Unanimous Written Consent of the Board of Directors” that is signed by the four directors. The attorney wrote me that “the written minutes of the meeting are the only record and the best evidence of the proceedings of said meeting.” If the board doesn’t have meetings and there are no minutes, how can that form be included with minutes?

Answer: Included in deed-restricted ownership is the possibility that boards of directors can evade the law, avoid obligations to owners and place individual titleholder assets at risk. Using a unanimous consent form -- of which there is no mention in California’s Davis-Stirling Act -- as a method of avoiding board meetings is just such a risk and is illegal.

Under Corporations Code section 7211(b) “an action required or permitted to be taken by the board may be taken without a meeting if all board members shall individually or collectively consent in writing to that action. The written consent or consents shall be filed with the minutes of the proceedings of the board.”

Minutes are intended to record board deliberations and association business conducted during that duly noticed meeting. Publishing an activities update is not a substitute for legitimate minutes and is not the best evidence for proceedings of meetings.

Although discussion of litigation might take place in executive session, the association’s business must be conducted in the open and in accordance with the Davis-Stirling Common Interest Development Open Meeting Act (Civil Code section 1363.05).

A board must hold meetings to discuss and implement the business of the association. Because there was no meeting, the board could not have acted collectively in good faith. Without a duly noticed board “meeting” as defined in Civil Code section 1363.05(f), “any congregation of a majority of the members of the board at the same time and place to hear, discuss, or deliberate upon any item of business scheduled to be heard by the board,” a written consent unanimous or otherwise cannot be filed -- meaning the action taken is null and void and the association’s business is not being performed in a lawful manner. Even the “decision” without a meeting must be confirmed at the next actual meeting and reported in the minutes which, under Civil Code section 1363.05(d), must be available to members within 30 days of the meeting.

Corporations Code section 7211 requires at least four days’ notice of the meeting unless the meeting is held on the date and at the time specified in the association’s bylaws. The failure to hold meetings violates the law and can lead to liability. As a consequence, the “unanimous” aspect of the board’s consent must be reached by discussion and deliberation, meaning some form of meeting must have been held and minutes are required.

As described, the unanimous consent form appears to have been invented for the primary purpose of circumventing the Open Meeting Act and impairing or impeding the effective exercise of the association’s business and homeowner rights.

Send questions to P.O. Box 11843, Marina del Rey, CA 90295 or e-mail noexit@mindspring.com.