Executive session can’t be called without board meeting
Question: Some shenanigans appear to be going on at my homeowners association. A group of owners were inadvertently locked out of our clubhouse because management changed the key but didn’t share it with us. The association’s manager called me to apologize and told me to come to the clubhouse and get a new key as he was meeting with the board in executive session to go over our financials.
Owners had no notice of this “executive session,” and it was not called from a regular noticed board meeting. The reason I know it wasn’t called from a regular noticed board meeting is because our association doesn’t have such meetings even though they are required by the covenants, conditions and restrictions.
Owners often find out about meetings because we happen to walk by the clubhouse, where a notice is supposed to be posted stating when and where the meeting is to take place.
Other times we hear about a meeting after it occurs. Even though the management company says they post meeting fliers on the bulletin board, no owners seem to see them. How do we owners know if this was a legitimate executive session? How do owners know there is a legitimate reason for any executive session other than the discussion of “financials”?
Answer: The type of executive session you describe is not legal. The discussion of financials is not an appropriate topic for an executive session. Financials are part of the business of the association that the board is obligated to discuss at a meeting open to all titleholders.
The legitimacy of board meetings in a common interest development is determined by law, the Common Interest Open Meetings Act, Civil Code section 1363.05. Valid executive sessions are defined in Civil Code section 1363.05(b) and may be used to discuss only the five areas specified in that law. Anything not stated in the definition must be discussed at a meeting open to the homeowners.
Executive sessions are designed to keep certain matters confidential, for example, some discussions with the association’s lawyer. But if an outsider, such as the association’s manager, is present, the confidentiality is destroyed and the board can be ordered to disclose the contents of those discussions.
“When and where” board meetings are held are covered in Civil Code section 1363.05(f). If a time and place for meetings are contained in the covenants, conditions and restrictions, or CC&Rs, no additional notice is necessary when the meetings are held as stated. If the date, time or place is changed from that stated in the CC&Rs, the association is required to give every titleholder at least four days’ notice.
To ensure owners receives notice, they must send a specific written request to the board stating they want to receive notice by mail and provide a mailing address. Otherwise, owners will have to continually check the location the association uses to post meeting notices to see whether a meeting has been announced.
An executive session cannot be called on its own because it is not a meeting per se but a session that must be adjourned to from a regularly noticed and convened board meeting. Minutes of the board meeting must contain a general discussion of adjournment to executive session and what occurred during that session. Those minutes must be made available to owners no later than 30 days after the board meeting.
Boards that exclude titleholders from their meetings and other such discussions may have something to hide.
In addition to demanding accountability from their board of directors, owners should demand copies of association financial documents and all minutes pertaining to any board meetings. If after that you are still dissatisfied or suspicious, consider electing new directors to the board.
Send questions to P.O. Box 10490, Marina del Rey, CA 90295 or e-mail noexit@mindspring.com.
