EDITORIAL: Why did the orientation plan for PMC’s new board members appear to scoff at following the law?

  • Rory Worster, general manager for the Pine Mountain Club Property Owners Assn. (PMCPOA) speaks with the seven (7) board members who attended the orientation session. William Gurtner (blue shirt) is the current chair of the board. Worster and Gurtner organized and conducted the orientation meeting. On the screen is reference to the Davis-Stirling Act (misspelled as 'Sterling'). Thorough understanding of the evolution of the Davis-Stirling Open Meeting Act elements is vital for smooth and lawful PMCPOA governance.

    Rory Worster, general manager for the Pine Mountain Club Property Owners Assn. (PMCPOA) speaks with the seven (7) board members who attended the orientation session. William Gurtner (blue shirt) is the current chair of the board. Worster and Gurtner organized and conducted the orientation meeting. On the screen is reference to the Davis-Stirling Act (misspelled as 'Sterling'). Thorough understanding of the evolution of the Davis-Stirling Open Meeting Act elements is vital for smooth and lawful PMCPOA governance.

Some mornings just seem to start out wrong. This Monday, July 28 I had two publications to get to printer and much too much work on my desk, all on deadline, but suddenly I realized that no itemized agenda for an orientation session set up for newly elected board members of Pine Mountain Club’s POA had been sent to members nor was an agenda posted four days in advance as required by the Davis-Stirling Open Meeting Act (Civil Code Sections 4900-4950). I hurriedly dashed off a statement to share with the board. Here it is. —Patric Hedlund, Editor

Good morning,
I am here this morning to share a concern about the fact that our new board members—and our existing board members—are being asked to attend an orientation session that unfortunately is in violation of the Davis-Stirling Act.

A full agenda for this orientation training was not posted and distributed to the members at least four days in advance as the law requires. The notice that was posted said only that you would meet at 8:30 a.m. in open session and then adjourn for nearly two days of orientation in executive session.

One of the most fundamental concerns of the Pine Mountain Club Property Owners Association (POA) membership is potential abuse of executive session by board members.

What is proper to discuss in executive session is extremely limited, and very specific. That is for very good reason.

The restraints on the use of executive session were put in place in recognition that property owners associations (POAs) in this state have grown to become quasi-governmental bodies.

The duty of this board is not just to be a custodian of corporate interests of the POA. Our board is the primary governing body of this little community.

It has become clear to judges and legal analysts that you have a duty to serve the interests of the families who live here.

For this reason, California’s Davis-Stirling Act has increasingly begun to parallel California’s Brown Act—the law that says people who are governed have a right to know what their elected representatives are doing, and how and why they are doing it.

In this very first meeting with the new board members, they are being led—perhaps by well-meaning accident—into a very unfortunate misunderstanding of what is proper to discuss in executive session.

Lessons of 2005
What is most alarming is that this community has already fought this fight…in 2005.

In 2005 a reform board was elected in large part because of concern in this community over possible abuse of members’ rights and concern about possible abuse of executive session to hide important proceedings and discussion from the public eye.

Since then it was decided that orientation retreats to distant locations, and adjourning orientations for two days into executive sessions, is not acceptable to this community.

Since 2005 members have been invited to orientations which were held largely in open session. Closed session—executive session—is to be reserved for:
1) Briefing of new directors about specific current litigation or threat of litigation;
2) Specific  personnel decisions related to specific individual staff members;
3) Specific  current contract negotiations;
4) Specific member discipline;
5) and specific lien foreclosure and payment negotiations.

Discussion of past litigation, general issues regarding personnel policies, payment policies, discipline policies and past contracts are all items intended for open session discussion.

We all need to learn from our past mistakes. And this association has definitely made its past mistakes.

Some inexperienced board directors—and even board presidents—have leaped into legal conflict rather than good faith negotiations with our own members. This proved to be very expensive for our community…and very lucrative for attorneys.

Your duty is to the members. You took an oath of office and swore to serve the law and the members.

As much as we appreciate your service—and we do—the law is not written to serve you and your convenience. It is not written to serve your need to bond or to tell private jokes to each other. Personal bonding is enjoyable, and important, but it is not what the law of the state of California is set up to protect.

The law is written to protect the rights of those whom you serve, the people who live here.

Please correct this error of proposing to spend two days largely sequestered in executive session. It was probably a well-intended suggestion, but it is not what the community or the law has asked of you.

Speaking about things that defy the Davis-Stirling Act’s narrow definition of executive session topics sends the wrong message to our new directors; the wrong message to directors continuing to serve; the wrong message to the new officers you will soon elect; the wrong message to the general manager whom you must supervise; and the wrong message to the members who elected you.

You deserve the members’ trust. Please follow the law….Please correct the error and serve the people who gave you their votes. I appreciate the opportunity to speak with you this morning.
A Summary of Davis-Stirling Open Meeting Act (Civil Code Sections 4900-4950) by Curtis Sproul was referred to in preparing these notes.  (see below)

The good news: I arrived at the PMC clubhouse Pool Pavilion a bit before 8:30 a.m. A lovely continental buffet had been set out for the directors.  PMCPOA General Manager Rory Worster said “she can’t talk, this is a special meeting,” when I asked to give this message to the board that morning. The current chair of the board William Gurtner said I had no right to speak to the 7 members of the 9-member board who were assembled for the training (a quorum and a majority).

I said, “you have opened in general session and a call to the members is required by law.” “No it isn’t,” he said.” “It is the law,” I replied quietly, and sat down at the back of the room to wait for him to consider the situation. No agenda had been distributed to the membership, but an agenda was being handed to the directors by Worster. The meeting was convened.

Director and Secretary Tim Bridwell read the opening to the agenda, which plainly said that the time to speak is at the  ‘members forum.’ Gurtner said, “This isn’t on the agenda but Patric would like to speak before we begin the session.” I stood, and Director Mike DeAngelis said, jokingly, “Use the microphone.”  There was no microphone, but I laughed and walked to the front of the small room so directors would not have to twist in their seats to hear. I thanked them for the opportunity and delivered the message above.

Afterward, Director Cameron Acosta was very emotional, “How dare you!” she said, standing in agitation. She said I was alleging that directors were dishonest. She said that they wouldn’t dream of speaking of improper items in executive session. Yet both she and I had on the table in front of us an agenda prepared by the manager and the chairman which clearly stated they planned to go into executive session to talk about things that are not allowed within the narrow definitions of executive session defined by the 2014 Davis-Stirling Open Meetings Act.

Former PMCPOA Director and member Katherine King also attended and asked to speak. She explained a little about  the efforts of the 2005 board to make the orientations open to the members. “Transparency is my issue,” she said, reminding them that she has also served on the PMCPOA Governing Documents Committee.

Chairman Gurtner said perhaps they had made a small error and that they would stay in open session for the majority of the day. He also gave Director Acosta a comforting hug when she went to the buffet table.

When former director Katherine King attended the afternoon session with the POA’s attorney Len Siegel, he said the best way for POA boards to stay out of litigation with members is for the board (and management) to follow the law regarding their obligations to members, including providing proper advance notice of meetings and proper agendas with the required detail to comply with the law.

This is a small victory for transparency.

The Bad News:   That same afternoon my email requests for an agenda for the following day’s session were not met with a response. On Tuesday, morning July 29 at 8 a.m. I received an agenda for that day’s 8:30 a.m. meeting. The law states a 4-day advance notification is required. Members Edie Stafford (a former PMCPOA director) and Brenda Martin attended the morning session. At about 10 a.m. the board went into a closed session for training on Sexual Harassment issues. The members were “excused” from the meeting (told to leave).

Here is Sproul’s brief on the laws governing POAs:

Prepared by Curtis C. Sproul
(916) 783-6262

One of the  key  provisions of California’s  Davis-Stirling  Common  Interest Development Act (California Civil Code sections  4000-6150)  is the Act’s Common Interest Open Meeting Act (Civil Code sections  4900-4955; hereinafter, the “Open Meeting Act”), a complete   copy  of which  follows  this  Summary.    This  sunshine law  parallels,  in  many respects, the Ralph M. Brown Act (Government Code §§54950-54963) — the principal  law regulating the  conduct  of meetings  by the  boards  of   local  governmental agencies  and requiring that  most  meetings  of the governing board  or council be open  to attendance by the  public, with  published  agendas and  an  opportunity for the  “citizens”  to address the board  on scheduled action  items.  Mandating  that  the  boards  of common  interest owner associations conduct  their  meetings  in much the same  fashion  as a town  council  meeting was  not  always  the  way  that  business was   conducted in the  early  years  of the  Davis­ Stirling   Act, since  the  original   version   of  the  Act  did  not  include   an  open   meeting requirement.  Furthermore,  the   Davis-Stirling   open   meeting   rules   have   evolved   and expanded over time.  Here is the back story of that evolution:

A Brief History of the Davis-Stirling Common Interest Development Act:

In 1983  the California Legislature  appointed a Select Assembly Committee  of knowledgeable individuals 1 to assist  the  Legislature  in drafting the original  Davis-Stirling Act. Early in the Committee’s deliberations the threshold decision  was  made  to focus the new  Act primarily  on  achieving  two  objectives,  namely:  (i)  the  consolidation – in  one location   in  the   Civil  Code  – of  all  real   property  statutory  provisions  pertaining to condominiums, planned  developments and other  forms of common  interest ownership and (ii) to conform  the statutory rules  for forming,  operating and  managing  common  interest developments with  Regulations  of the  Department of Real Estate  (which at the  time  had become more progressive than the then existing statutory rules).

Another  threshold decision  that  was made  by the Select Assembly Committee  was that   the   new  Act  should  not  delve  too  deeply   into   matters  relating   to  the  internal governance of owner  associations (such as the conduct of board and member meetings, the required notices  for meetings,  member discipline,  the  election  and  removal  of directors,

The Select Committee  included academics  (Katharine  Rosenberry),  several lawyers  representing  primarily common  interest real estate developers, a lawyer representing  the perspective of owner associations, title company representatives, bank/lender  representatives  and property managers, and a senior representative from the California Department  of Real Estate.  I  was a member of the Committee
and director and member inspection rights). The judgment  call to not expand  the original Davis-Stirling  Act to  include   a provision   regulating internal  association governance was based  primarily  on the fact that only a few years  prior to adoption of the Davis-Stirling Act the  Legislature   had  promulgated a  new  Nonprofit  Mutual  Benefit  Corporation  Law (in
1980)  that  was considered to be a progressive and  model statute throughout the  Nation. Most community  associations were formed  pursuant to the Nonprofit Mutual Benefit Corporation Law and therefore the trade-off  was to give those  few associations that were unincorporated the powers  of a mutual  benefit  corporation under  section  7140 of the Corporations Code (Civil Code section 1363(c); now Civil Code section  4805(a)). As signed into law by Governor  Deukmejian  on September 18, 1985,  the original  Davis-Stirling Act was only 25 pages long.  In contrast, the 2014 version of the Act is now 101 pages long. 2

Almost before  the ink had dried  on the original  version  of the Davis-Stirling Act critics  of the  concept  of private  governance and  regulation of personal real  property rights  administered by  neighbors began  to  voice  their  concerns  to  their  local representatives,  advocating for a Homeowners Bill of Rights and  other  amendments to Davis-Stirling  imposing  specific  constraints on  the  powers  and  authority of the  elected board  members.  Like the  corporate laws  of many states, California’s  Corporations  Code was crafted  with  input,  guidance  and  recommendations from leaders  of the  Corporations Committee  of the State  Bar of California at a time when the composition of that Committee was dominated by lawyers  from  large  corporate firms  in   California’s  three  major  cities (LA, San Francisco,  and San Diego).  As a result,  there  is a bias in those  provisions of the Corporations Code dealing  with  corporate governance and  decision-making in  favor  of incumbent boards   of directors, rather than  the  rights  and  interests of stockholders or members3.

That rather paternalistic foundational principle of the supremacy of the board  under corporate law  principles is articulated most  emphatically in Corporations Code sections
300  (for-profit corporations) and  7210  (nonprofit mutual  benefit  corporations):   “[T]he activities  and affairs of a corporation shall be conducted and all corporate  powers shall be exercised by or under  the direction of the  board”,  unless  the Code, itself, or the articles  or bylaws  of the corporation expressly reserve some  action  or decision  for approval  by the members  or   the   shareholders4.    Other   provisions    of  the   General   Corporation  Law

Actually, the 20 14 Act is about 200 pages long if you count the Commercial  and Industrial Common
Interest Development  Act which, effective January  I, 2014 replaces Civil Code section 1373.
1            Certainly  there have been pro-shareholder reforms over the years, such as cumulative  voting in the election of directors  under Corporations Code sections  708 (General Corporation  Law) and 7615 (Mutual  Benefit
Corporation  Law), however the essentially  oligarchic structure of corporate governance and decision-making remains the same.
4    And the list of action items requiring  member or shareholder  approval  under the Corporations Code is limited to very significant  actions affecting the corporation  such as the election of directors,  approving amendments
to the Articles or Bylaws, approving  mergers or the dissolution of the corporation.
(Corporations Code sections 307(a)(6)  and  307(b))  and  the  Mutual Benefit  Corporation Law (Corporations Code sections  7211(a)(6) and  7211(b)) permitted boards  to conduct their  meetings  electronically or by the use of conference telephone technology(i.e., without any  physical  location  that  could  be attended by the  members) and  even  to  take  action without any meeting, by unanimous written consent of all directors.

Community association activists felt that these statutory biases in favor of the board and management were  inappropriate in the context  of nonprofit associations that  wielded so much  power  over  matters of family, hearth  and  home.   The critics  noted  that  owner associations  were   not   formed   as   profit-making enterprises,  but   rather  as  localized collective  organizations formed  to accomplish  specific tasks  more  efficiently  and economically  than  any one owner  could achieve  on his or her  own behalf.   In the eyes of these  reform  advocates, owner  associations should  function  and  be  controlled under  a model  that  was  much  more  akin  to the  colonial  New England  Townships, whose  virtues and democratic ideals were extolled by James Madison in Federalist  No. 10.

These  critics  of the  corporate model  for  doing  business – a  model  that  favors management and  decision-making by  the  board  —  were  successful   over  the  years  in introducing amendments to the  Davis-Stirling  Act that,  little-by-little, moved  association governance away from the corporate law paradigm and towards a governance model  that more closely local government governing board  protocols  and transparency. The Common Interest Open Meeting Act, which was first added  to the Davis-Stirling Act in 2002,  was one of those  property owner  Bill of Rights reforms.

Evolution of the Common Interest Open Meeting Act:

Generally  speaking,  prior  to the  2012  amendments to the  Davis-Stirling  Common Interest Development Act, the Act’s “Open Meeting Law” applied  to “meetings of the board”
— a phrase  that  was  then  defined  in Civil Code 1363.05Q)).  Under  that  subparagraph (which  has now been superseded by Civil Code section  4090), in order  to come within  the Open Meeting Act requirements and  constraints on the ability of common  interest owner association boards taking actions  by written consent or in meetings  that  were not open  to attendance by the general  membership, the phrase  “meeting  of the board”  was defined  to include gatherings and discussions among board members that had these three  elements:
(i)         ”a congregation of a majority of the members of the board; (ii)      at the same time and place;
(iii)     to  hear,  discuss,  or deliberate upon  any  item  of business scheduled  to be heard by the board, except those matters that may be discussed in executive session.”
Under the original  version  of the Common Interest Development Open Meeting Act (hereafter, the “Open Meeting Act”), the congregation of a majority  of the members of the board  need not be in a formal setting,  but no violation of the Act occurred unless a majority of the members of the board  were  gathered  together and discussing or deliberating on an item  of business scheduled to be heard  by the board  at a later  meeting  or at the time the board  members got together.  As a result  of the  phrase  “scheduled to  be heard” most commentators agreed that  the  pre-2012  Open  Meeting  Act did  not  reach  discussions among  members of the board  regarding matters of importance to their  association so long as the  matter or  topic  in discussion  was  not  a scheduled item  of business or a  pending action item before the board.

Prior to the 2012 amendments to the Open Meeting Act the law was also  unclear as to whether directors could conduct  meetings by written consent or by use of conference phone  technology  – both  of these  methods of meeting being  sanctioned board  meeting methods of conducting board  business under  the  Nonprofit  Mutual  Benefit  Corporation Law (See Corporations Code section  72116).   That open  issue  has now been answered in the  negative  — community association boards  are  no longer  permitted to take  action  by unanimous written consent (see Paragraph 9, below).

Summary of the Common Interest Open Meeting Act As it Exists Today:

Effective January  1, 2014  the  California  Legislature approved a wholesale revision and recodification of the Davis-Stirling Act and under  the new version  of the Act, the Open Meeting  Act provisions are  now found  at  Civil Code sections 4900-4950. It was  not  the intention of the Legislature  to implement substantive law changes  in the  recodification of Davis-Stirling and therefore the goals of the Open Meeting Act remain  generally  the same, namely  requiring community association boards  to  conduct  most  of their  business in a manner that  is open  to attendance and  participation by the  members.  What  follows is a summary  of  the   principal   requirements  of  the   Common  Interest   Development  Open Meeting Act:

1.     Definition of what constitutes a “Meeting of the Board”:

Under the  2014 version  of the Davis-Stirling Act, Civil Code section  4090  defines  a meeting of the Board of Directors of a community association as follows:

“Board meeting”  means either  of the following:

5     As discussed  below, even under the original  version of the Open Meeting Act it was permissible for association  boards to meet, deliberate,  and act on certain enumerated  matters in an executive  session meeting that was not open to attendance  by the general  membership.  That principle has always been part of the Open Meeting Act.
6     Under Corporations Code section 7211 (b) each director can sign a separate written consent,  thus obviating the need to have any of the directors  present in the same room while reaching a decision.
(a)       A congregation, at  the  same  time  and  place,  of a  sufficient number of directors to establish a quorum  of the board, to hear, discuss,  or deliberate upon any item of business that is within the authority of the board.

(b)       A  teleconference, where  a  sufficient  number of directors to establish a quorum of the board, in different locations,  are connected by electronic means,  through  audio or video, or both. A teleconference meeting shall  be conducted in a manner that  protects the  rights  of members of the association and otherwise complies with the requirements of this act. Except for a meeting  that  will be held solely in executive  session,  the  notice  of the teleconference meeting shall identify at least one physical location so that members of the  association may attend, and  at  least  one  director shall  be present  at  that   location.  Participation  by  directors  in  a  teleconference meeting   constitutes  presence  at   that   meeting   as  long  as  all  directors participating are   able  to  hear  one  another, as  well  as  members  of  the association speaking on matters before the board.

COMMENT:  Unlike  the  original   version   of  the  Open  Meeting  Act  which  limited   the definition  of board  meetings to congregations of a majority  or more of the board  to discuss or  deliberate on  matters that  were  scheduled for action,  the  current Open  Meeting  Act merely  requires that  the  congregation  be  for  the  purposes of  hearing,  discussing,  or deliberating on any item of business that is “within  the authority of the board”, whether or not the matter is a scheduled action item.  Section 4090 of the recodified  Davis-Stirling Act also  differs  from  former  Civil Code section  1363.05 by saying  that  the  congregation of directors that triggers  coverage  of the Open Meeting Act rules is any  congregation of a quorum  of the board, rather than of a “majority  of the board”. Meetings conducted through the use of electronic technology are not banned  entirely but must   meet  the requirements for the conduct  of emergency meetings  (as defined  in Civil Code section 4923) or in a way that  affords  the  opportunity for  member  participation  in  accordance  with  Civil Code section  imposed  by Civil Code sections  4090(b) and 4925(a), which is discussed below.

2.     Members have a limited right to participate in Board Meetings that are open to Member attendance:

Members have the right to attend  board  meetings, except when the board adjourns to, or meets solely in, executive  session, and at open meetings of the board, members must be given an opportunity to speak, subject  to reasonable time limitations (applicable to all members) (Civil Code section  4925).  The typical  practice  in the conduct  of most  common interest association board meetings  is to schedule or identify a time on the meeting agenda for  member   comments or  an  “open  forum”  at  which  members can  address the  board. Although as noted  in the statute, reasonable time limits can be imposed  on the duration of member  comments, the board  cannot  restrict the range of topics that members can raise in
open forum so long as the topics are pertinent to the association and its membership (Civil Code  section   4930(a)).  In  other words,  although   those   persons who  are  serving as directors must, with limited  exceptions, stick  to a discussion  of matters on the  published agenda  (Civil Code section  4930), members who are  not directors are  not so constrained, as  long  as  they  do  not  go off on  tangents that  have  no  relation   to the  business of the association or the development.

Although  the  Civil Code Open Meeting Act provisions do not expressly use the term “open forum” the principle  remains that the meeting of the directors is a Board meeting and it becomes  extremely difficult to control  the conduct  of business and to receive  input  from the  elected  directors if members who  are  not  directors are  permitted to  jump into  the board meeting discussions at will.   Here is what the Adams & Kessler website, “davisstirling.com” says on this subject:

Participation During a Meeting. As stated  above, members do not have a right to participate in board  discussions and votes. The only legal right for audience participation is during  the Open Forum portion  of the meeting.  Even so, boards can invite  comments from  the audience on particular items  of business if they so choose.  This is completely at the discretion of the board.  Once a motion  and second  has been  made on an item of business,  the president, with the approval of the board,  could  invite  comments from  the  audience. Once comments have been  received,  discussion  can be closed and  a vote taken  by the board  (or the matter tabled).?

3. Telephone conference meetings of the Board are now expressly sanctioned with one important qualification:

The  Open  Meeting  Act  was  amended  to  include   an  express   authorization  for conducting board  meetings  electronically (by phone or video conference technology;  (Civil Code section  4090(b)). The one  qualification to that  authorization is that  the  conference meeting  must  still  be  conducted  in  a  manner that   protects the  right  of  non-director members to  participate.  To  make  that  happen,   the  notice  of a  teleconference  board meeting   must   identify   one   physical   location   where   at  least   one  director  will  be  in attendance so that  members can hear  the conference call discussion  and  participate in the meeting.    If  an  executive  session  is convened  during  or  at  the  end  of a meeting  that  is otherwise open  to member  attendance, the executive  session  portion  need  not be open  to listening by the members who are  not directors (Civil Code section  4925(a)).  Finally, subparagraph   (b)   of   Civil  Code   section   4090    parallels    similar   provisions    of  the Corporations Code by saying that when a  board   meeting  is conducted as a conference call,

Certainly  in small owner associations the conduct of board business is often much more informal and it is not uncommon for the board to permit member comments  throughout  the meeting. Tthe call must  be structured so that  all participants (directors and  members) can hear  one another and participate in the discussions.

Mandating  that  there  be at least  one  physical  location  for a board  meeting  that  is otherwise conducted electronically in order  to  protect the  rights  of members to  attend open  meetings  of the  board   may  sound  like  an  adequate solution,  particularly in  the context  of developments and associations that are comprised of persons who reside in the development as their primary  residence. However the “one physical location” requirement may not work as well in the context  of resort developments where  the homes or units are not primary  residences. In that  context  the principal  residence of many members who are interested in actively  participating in the affairs of their  association may far from the designated physical location  for the board  meeting,  although  that  would also be the case if the board  meeting  was conducted at the development and in the traditional manners.

In  my  opinion,   the   “one   physical   location”   requirement  means   that   owner associations are  not required to provide  non-directors with the telephone conference call number or other  dial-in information for the conference call meeting,  although  that  means of  participation could  be  permitted in  the  discretion of the  board   (particularly in  the context  of small associations).  In the context  of large associations, affording  non-director members the opportunity to participate telephonically could make it extremely difficult to control  the  discourse at  the  meeting  or  to  prepare a clear  an  accurate record  of what transpired for inclusion  in the minutes of the meeting  (due to an absence  of control  by the chair of the meeting,  interruptions, and persons speaking over one/another).

4.   It is now clear that executive  session meetings (to the exclusion of the general membership) can be conducted without first convening the board meeting in open session.

In the original version  of the Open Meeting Act, the statute spoke of the board’s right to adjourn to executive session to discuss  and  take  action  on certain  enumerated action items.  Use of the word “adjourn” suggested that  in all instances a community association board  had  to  begin  with  an  open  meeting  and  then  entertain a  motion  to  adjourn  to executive  session. That  interpretation made  little  practical  sense  because  there  are  any number of scenarios that  can  be imagined  in which  it might  be necessary for a board  to

8    Wisely, in my view, the Open Meeting Act does  not  mandate that  the  physical  location  for a board meeting  always  be  in  or  near  the  development (many  boards  of  resort  associations routinely conduct meetings  in other  regions  of the State  where  a large number  of members maintain  their  principal  residence). Nevertheless, that  requirement is imposed  on new developments by Regulations  of the  Department of Real Estate  (Regulation  section  2792.20(b) which  states that  ordinarily regular  meetings  of the  board  shall  be conducted within  the development unless  the board  is of the opinion  that a larger  meeting  venue  is needed than is available in the development).
emergency matter  requiring immediate board  attention and  action.   Recognizing  those realities,  the  Open Meeting Act was amended to state  that  “the  board  may adjourn to, or meet  solely in, executive  session”  (Civil Code section  4935(a)).  That same  section  of the Civil Code identifies  the  following as matters that  can be taken  up and  acted  upon  in an executive session:

(i)     litigation  {NOTE: analogous provisions of the Ralph M. Brown Act have made it  clear that this litigation  privilege extends to discussions of both pending and threatened litigation]:

(ii)     matters relating to the formation of contracts with third  parties;

(iii)         member discipline  (NOTE: the decision to discuss member discipline in executive  session  is discretionary unless the member  who is the subject  of the discussion  requests that the meeting be conducted in executive session, in which case the board  must honor that request and the targeted member has a right to attend the session);
(iv)     personnel matters;

(v)         to meet with a member, upon the member’s request, regarding the member’s payment of assessments, as specified in Civil Code Section
5665  (pertaining to requests to meet with the board to discuss a
payment plan for delinquent assessments);

(vi)     to decide  whether to foreclose on an assessment lien pursuant to subdivision (b) of Civil Code Section 5705.

Interestingly, the  Open Meeting Act’s enumeration of matters that  are  appropriate and legal for consideration by a community association board  in executive  session  fails to mention  the right   of the board to meet in executive session  to receive advice from the association’s legal  counsel   under   circumstances  where   it  is  necessary  to  protect  the attorney-client privilege,.   In the  opinion  of this  writer,  that  privilege  exists  by virtue  of Evidence  Code sections  950-962 regardless of whether it is expressly stated  in the Open Meeting Act’s discussion  of executive  session  meetings.  Perhaps the  right  to confer  with counsel  in executive  session  was  not separately identified  in the Open Meeting Act since most attorney-client privileged  conferences in a community association context  are  likely to involve discussions of threatened or pending  litigation,  the formation of contracts with third  parties,  or  personnel matters — all of which are  identified  as legitimate executive session  discussions.

5.     Member  notification   rights  and  time  periods for  the  provision  of notice  to
Members of board meetings.
of common  interest owner  associations who  are  not  directors are  entitled  to  receive  at least four days prior  notice of the time, place, and the agenda  for  all open board  meetings (Civil Code section  4920).   If an open  meeting  is agendized  to include an executive session, then  that  four day notice  rule also applies  to the executive  session  portion  of the meeting. If an executive  session  meeting  is called as a stand-alone executive  session  the  members who  are  not  directors still  have  the  right  to  prior  notice  of the  meeting,  however   the minimum   prior   notice   requirement  applicable   to  such  stand-alone  executive   session meetings  is two days, rather than four (Civil Code section  4920((b)(2)).

If member  disciplinary action  is on the agenda  for the Board meeting,  the member who is the subject  of the possible  action  is entitled  to written notice, delivered  personally or by first-class  mail, of the meeting  at least 10 days prior to the scheduled date of the meeting and that  notice must include the date, time and location of the meeting, the nature of the  alleged  violation  for which  discipline  is being  proposed, and  a statement that  the member has the  right  to attend  the  meeting  and  to address the  board  if the  member so desires.  Civil Code section 5855.

The requirements for prior  notice  to directors remains  as stated  in the  Nonprofit Mutual   Benefit   Corporation   Law   (subject   to   any   more   liberal   requirements   (i.e., requirements for more  extended prior  notice)  that  may be stated  in the  Bylaws or other governing documents of the  association).   Those  notice  requirements are  stated  in Corporations Code section  72119•    Regulations  of the California Department of Real Estate (Regulation  section  2792.20)  state that  directors are  to receive at least four days prior  to the date  of any regular  meeting  unless  the  time and  place of the  meeting  are  fixed in the Bylaws.  Those  same   Regulations   (which  govern   the  content of  association  governing documents prepared  by the  project  developer) require associations to  provide  to  their directors at  least   72  hours’   prior   notice  of  special   meetings   (although directors are permitted to sign a waiver of this special  notice requirement). As noted in Paragraph 13 of this  Memorandum, it is my view  that  an  emergency meeting  is tantamount to a special meeting  of the board  and  is therefore subject  to the  72 hour  prior  notice  rule (notices  to directors) and  to the  right  of directors to waive  that  prior  notice  requirement. The Open

9    Corporations  Code  section  7211 (a)(2)  says that regular  meetings  of the board of a mutual  benefit  corporation may be held without notice if the time or place of the meetings are fixed by the bylaws of the board and that special meetings of the board require four days’  prior notice if the notice is sent by first=class  mail or 48 hours notice if the notice is delivered  by telephone  or personally  (including  a voice mail or email  notice).   Section  7211 (a)(2) further provides that neither the articles  nor the bylaws  may dispense  with notice of a special  meeting, although  directors are  pennitted   by  subparagraph  (a)(3)  of  Section  7211  to sign  a  waiver  of  notice.    These  notice  rules  in  the Corporations Code  are  trumped  by the  Department  of  Real  Estate  Regulation  that  is cited  in  the  body  of  this Memorandum  since  developer-drafted governing  documents  must  adhere  to the  ORE  Regulations  and  therefore three days (72 hours) of prior notice must be given to directors  for special  meetings  unless a director signs a waiver of the notice  requirement  or a consent  to the meeting.   That rule would, in my view, apply  to Open  Meeting  Act emergency  meetings.
of  [an  emergency]  meeting”   (Civil Code  section   4920(b)(l)),  however   the  statutory provision  is unclear  as to whether this absence  of notice requirement is intended to apply solely to notices to the general  membership or also to the directors, themselves.  Obviously if a meeting  is to be held on an emergency basis, the directors need some prior notice. Also, if an association’s governing documents require a longer  period  of notice than  is required by  the  Open  Meeting  Act’s  notice   provisions,  the  association  must  comply  with  the requirements stated in the governing documents. Civil Code section  4920(b)(3).

6.     An agenda is to be included with the notice of the board meeting.

This principle  is stated in Civil Code section  4930(a) and that requirement applies to both open and executive  session  meetings.   However, because  the discussions that  happen in  an  executive   session   are   not  open   to  attendance  or  participation  by  the  general membership, the agenda for an executive session ought to be very general  in nature.

Minutes  of executive  sessions  should  not  be distributed to the  members who are not directors. See Civil Code section  4950(a). Civil Code section  4930(a) only imposes  a requirement that  members receive  “the  agenda  for  the  meeting”  as  part  of the  notice materials.  There  is no requirement to provide  members who are  not directors with  any supporting documentation that  might be under  discussing during  an item that  is noted  for discussion  and action  on the published  agenda.

7.         Under most circumstances as to meetings that members have a right to attend, the board must stick to the published agenda.

With  limited  exceptions, the  board  is required   to  address and  to  take  actions  at board  meetings   solely  with  respect to  matters that  have  been  listed  in  the  published agenda   for the meetings and directors are  prohibited from discussing  or taking action on any  item  that  was  not  on the  agenda  which  was  published  to the  members (Civil Code section  4930(a). That subparagraph includes  a carve-out for actions  taken  by the board at an “emergency meeting”  as defined  in the Act (see  Paragraph 13, below).   In addition,  the limitation  applies  only to the board  and does not prohibit a resident who is not a member of the board  from speaking on issues  during  an open  meeting  that are  not on the agenda (Civil Code section  4930(a)).

The permitted exceptions in which the board  can depart from the published  agenda are as follows (Civil Code section 4930, subparagraphs (b) and (c)):

•    Directors,  the manager, and other  association agents  are permitted to briefly respond to statements made or questions posed by any  person speaking at a meeting.
reports on  the  director’s own  activities, whether in  response to  questions posed  by  an attending member at the director’s own initiative.

•    Subject to any  rules  or  procedures for the  conduct of the  meeting, directors are   permitted    to  (i)  provide  a  reference  to,  or  provide other  resources for  factual information to, its  managing agent or  other agents or  staff;  (ii)  request the  association’s managing agent or  other agents or  staff  to  report back  to  the  board   of  directors at  a subsequent meeting concerning any  matter, or take  action  to direct its managing agent or other agents or staff  to place  a matter of business on a future agenda; or (iii) to direct the association’s managing agent or other agents or staff to perform administrative tasks  that are necessary to carry out the business of the association.

•    Finally,  the  board of directors is  permitted to  depart from  the  published agenda under any of the following conditions (Civil Code section 4930(d)):

(i)  if the  board, by a  majority of the  directors present, determines that  an emergency situation  exists   which   could  not  have  been   reasonably foreseen and which  requires immediate attention and  possible action  by the  board and  which  of necessity makes it impracticable to provide prior  notice  to the members;

(ii)       if two-thirds of the  directors present or by the  unanimous vote  of the attending directors if less than  two-thirds of the  board , that  there is a need  to take immediate action  and  that  the  need  for  action  came  to  the  attention of the  board after  the agenda was  posted and  distributed pursuant to Civil Code section 4920(a); or

(iii)      when    the    item   appeared  on   an   agenda  that    was    posted  and distributed to  the  members pursuant to  Civil Code  section 4920(a)  for  a  prior meeting of the  board of directors that  occurred not  more  than  30  calendar days before the  date  that  action is taken  on the  item  and, at the  prior  meeting, action  on the item was continued to the meeting at which  the action  is taken.

Before  discussing any  item   pursuant to  the  authority  conferred  by  any  of  the methods stated in this  final  bullet  point,  the  board of directors shall  openly identify the item  to the members in attendance at the meeting. Civil Code section 4930(e).

8.   The Open Meeting Act permits   members to receive notice of Board meetings electronically, but only if they consent to that mode of notice.

Civil Code  section 4920(c) says  that  members can  be given  notice  of meetings by general   delivery   pursuant to  Civil  Code  section  4045.     “General   Delivery”   is  broadly defined in Civil Code Section   4045  to  include any  form  of delivery permitted for  notices
that  have to be sent  by “individual notice” (which includes  first class mail, overnight mail, or  email  or  FAX (if  the  recipient has  consented  to  receiving  email  or  FAX notices)), inclusion  in  a  billing  statement, newsletter or  other  document that  is delivered   to  the members, or by posting  the  notice in a prominent location  that  is identified in the annual policy statement that  is given to the members pursuant to Civil Code section  5310.   If the association broadcasts television  programming for the purpose of distributing information on  association  business,  the   notice   of  board   meetings  can  also  be  provided   in  that broadcast (Civil Code section  4045(a)(4)).

It is recommended that  associations (particularly larger  associations) be proactive in communicating this  right  to  their  members and  that  associations have  an  electronic notice  authorization and  consent prepared in advance  for use in responding to members who are interested in receiving  notices  electronically (typically  email or FAX), rather than by “snail-mail”.

9.         Community   Association   Boards   Are   Prohibited   from   taking   action   by unanimous written  consent.

At Civil Code  section   4910(a)  the  Open  Meeting  Act  provides:     “The  board   of directors shall not take action  on any item of business [as defined]  outside  of a meeting  [as defined]“. Written consents can still be given by directors for the sole purpose of agreeing to conduct  an emergency meeting  by email or other  electronic means  (Civil Code section

10.     Email meetings of the board are also prohibited with one exception.

Civil Code section  4910(b)(1) prohibits the conduct  of board  meetings  “via a series of electronic transmissions, including  email” except  if all directors have agreed  by written consent to conduct  an emergency meeting in that  manner (Civil Code section  4910(b)(2)). The written consents to conduct  an emergency meeting  by use of an exchange of emails can also be transmitted electronically, so long as the email consents are  filed with the minutes of  the  meeting.  Ibid.    This  Open  Meeting  Act  rule  is  more   restrictive than   the  rules applicable   to   other    nonprofit   mutual    benefit    corporations   under    the    California Corporations Code.  Section  7211(a)(6)) of that  Code permits mutual  benefit  corporations to conduct  meetings electronically.

An email  exchange  among  fewer  than  a  majority  of the  board can  still occur  to discuss  or  comment on  an  “item  of business”,  so  long  as  the  email  exchange  does  not become  a “series”  of emails  involving  both  a majority  of the  board  and  a topic  that  falls within  the broad  definition  of an “item  of business” of the association. This is implied  by Civil Code section  4910(b)(1) which says that  meetings may not be conducted by use of a series  of electronic transmissions, such as email.
11.     The definition  of what constitutes  a “meeting” of the board for purposes of the
Open Meeting Act rules has been amended and expanded.

Prior to the  2012  amendments to the Open Meeting Act, a meeting  was defined  by the Act to mean a congregation of a majority or more of the directors “to hear,  discuss, or deliberate upon  any item  of business scheduled  to be heard  by the  board,  except  those matters that  may be discussed in executive  session.”   As a result  of the 2012 amendments to the  Act, no longer is the Act restricted to meetings.   Instead,  association boards  are now prohibited from taking “action” outside  of a meeting  (as defined in the Act) on any “item of business  that  is  within   the  authority of  the  board”   (Civil Code  sections 4090(a)   and

Furthermore the “item  of business”  need  not  even  be scheduled for  action,  but rather includes  any item of business that is “within the authority of the board, except those actions  that  the  board  has  validly  delegated to any  other  person  or  persons,  managing agent, officer of the association or committee of the board  that  is comprised of less than a majority of the directors” (Civil Code section  4155).

Is there  still a grey area  about  what  is an “action” of the board?  To be an “item of business” the  matter has  to  be “an action  within  the  authority of the  board”.  That wording would  suggest   that   the  purpose  of  the  communication  must   be  to  propose something (i.e., an action that  the board  might want  to consider taking).  Under that view, even a majority of directors could exchange emails, for example, to discuss the implications of these  2014  changes  in the  Davis-Stirling  Act or to discuss  the  deteriorating quality  of food at the clubhouse restaurant.  Arguably that  sort  of discussion  is not at the level of an “item of business” because  no action is being proposed or contemplated.

12.       The  “delegation   exception”  is  a  significant  out  to  the  Open  Meeting  Act’s coverage.
Note that if some action that is otherwise within the “authority of the board” and yet that action is duly delegated to another person,  management company  or body, then action on that  item  of association business by the delegee  or delegees is not subject  to the Open Meeting  Act.   Specifically,  Civil Code section  4155  provides that  an   “item  of business” means  any  action  within  the  authority of the  board,  except  for those  actions  that  the board has validly delegated to any other  person  or persons,  managing agent, officer of the association, or committee of the board comprising less than a quorum  of the board. ”

13.       The definition  of what constitutes an “emergency  meeting” remains unchanged by the 2012 Amendments.

The Open Meeting Act still defines  an “emergency meeting”  as one that  is called by the president of the association or by any two directors under  circumstances (i) that could
not reasonably have been foreseen that require immediate attention and possible action  by the  board  and  (ii) which  [circumstances] make  it impracticable to  provide  notice  to the members within the time constraints and in the manner contemplated by the Open Meeting Act (Civil Code section  4923). The term “emergency meeting” is not found in the Nonprofit Mutual Benefit Corporation Law, but rather is a term  that was coined solely for use in the context  of the  Davis-Stirling Open Meeting Act to refer  to meetings  that  have to be called and conducted under  circumstance in which the normal  notice  requirements to members cannot  be  met. The  Mutual  Benefit  Corporation Law speaks  only of regular  and  special meetings  of the board  and in my opinion  an emergency meeting  is simply a sub-set of the more general  category  of special meetings  under the Corporations Code and therefore such meetings  are  subject  to the  notice  rules  applicable  to special  meetings  (See Paragraph 5, above).

14.     The scope of permissible executive session meetings remains unchanged.

The   Open   Meeting   Act  and   other   provisions  of  applicable   law  still   restrict permissible executive  session  meetings  of community association boards  to the following six action items:

(i)        Meetings Convened to discuss or act on legal issues  or to receive legal advice  from  counsel.   The discussion  of litigation  that  involves  or may involve the association  (including   a  discussion   of  litigation   strategy, the  pros  and  cons  of initiating a lawsuit  on behalf of the association or settlement strategies for pending disputes or  litigation10.  The  association’s attorney does  not  need  to  be  present either in person  or by phone  for the  board  to meet  in executive  session  to discuss legal issues.

10     Attorney-client communications  are privileged  and cannot be discovered by an opposing party in litigation unless a waiver has occurred. The purpose of the privilege is to encourage full and frank communications  between the board and the association’s attorney (see Upjohn Company v. United States, 449 U.S. 383, 389). The privilege is held by the association through  its board of directors (Smith v Laguna Sur Villas (2000) 79 Cal App 4th 639). The attorney-client privilege is held by the board as a whole and not by individual directors. The privilege may be lost if one or more directors  do any of the following: (i) discuss matters  with non-directors outside of executive session; (ii) allow non-directors to attend executive session who have no legitimate  purpose for attending; or (iii) distribute executive session minutes or privileged documents to non-directors.
(ii)       Meetings  Convened   to  discuss   or  act  on  matters  related   to  the formation of contracts.  Boards  may consider matters relating  to the  formation  of contracts with  third  parties.    This  executive  session  exception  affords  governing boards  the opportunity to candidly  discuss  the  terms  of a contract proposal  or the pros and cons of competing proposals without the risk of having those deliberations falling into the hands of other competing potential contractors.

(iii)      Member   disciplinary  hearings.   Boards  should   meet   in  executive session   for  all  disciplinary  hearings,   although   the  Open  Meeting  Act  does  not mandate that the  hearing  be conducted as an executive  session  unless  the member who is the subject  of the hearing  requests an executive  session.  Civil Code section
4935(b) and  Civil Code  section   5855(b)   both  obligate   homeowner  association boards   to  conduct  a  disciplinary hearing  in  executive  session,  if requested by a member  who may be subject  to a fine, penalty,  or other  form of discipline.  The law also  instructs that  the  member   who  is  the  subject   of the  proposed  disciplinary actions  has the  right  to attend  that  portion  of the  meeting  dealing  with  member’s disciplinary  hearing.     Although  section   1363(g)  suggests   disciplinary  hearings should   be  held  in  open  session   subject  to  an  owner’s right  to  insist  on  closed sessions, the  more  sensible  interpretation (which  is consistent with  the  Ralph M. Brown Act rules  on the same  subject- see Govt. Code section  54957(b)(1)) is that Civil Code Section  5855(b) stands for  the  proposition that  disciplinary hearings should  be held in closed (executive)  session,  subject  to a demand  from owner  to be heard  in open  session.   Also by analogy  to the  Brown Act, it is appropriate for the board, after the hearing,  to exclude  the member who is the subject  of the proposed disciplinary action  and deliberate and take action in closed session.  See Bollinger v. San Diego Civil Serv. Comm. (1999)  71 CA4th 568.  If the decision is made to impose discipline,  Civil Code section  5855(c)  says that the Board must notify the member  of the  disciplinary action   by  personal  delivery   or  first class
following the meeting  at which the decision  is made.  If that  notice is not given, the disciplinary action cannot be taken.

(iv)       Meetings  called to discuss  or to act  on personnel issues.   Personnel matters which  include,  but  are  not  limited  to,  hiring,  firing,  raises,  disciplinary matters and performance reviews.  Addressing these  personnel matters in executive session  protects the  employee’s right  of privacy  and,  under  certain  circumstances there  could be a potential  for litigation  relating to the personnel matter.
(v)         Meetings with a member to discuss  delinquent assessment payment plans. The board  may meet  with members in executive  session  to discuss  requests by  delinquent  members  for  delinquent  assessment  payment  plans  (Civil Code section 1367.l(c)(3)).

(vi)       Meetings  called to consider and  possibly  act to initiated  foreclosure proceedings against  a delinquent owner.   The decision  to initiate  foreclosure with respect to the home or unit of a delinquent owner  must be made only by the vote of the  board  of Directors  of the  association.   That  is a decision  and  action  that  the board  is prohibited from  delegating    to  any  other    agent  of the  association.  The board  must  approve the  decision  by a majority  vote  of the  directors in executive session. This rule is found in Civil Code section  5665.

15.     Minutes of Board Meetings  Must Be Maintained.

Association  boards  must  maintain   minutes of their  meetings  and  that  obligation extends   to  open   meetings,   emergency  meetings   and  executive   session   meetings.   The maintenance of minutes  of meetings is mandated by Corporations Code section  8320(a) as well as by the  Davis-Stirling Open Meeting Act (Civil Code section  4950(a)).  In preparing minutes  of any  meeting  (whether of the  board  or the  general  membership) an  excellent guiding principle  is that the minutes  are intended to serve as the official record  of what the board  of directors (or the members) did in the meeting— what actions  were  proposed by proper resolution and then either approved or disapproved.  Minutes are  not supposed to be a verbatim transcript of every word said or angry exchange that occurred. At times it is important and appropriate to precede a statement in the minutes  of the actual action taken with a brief summary of the debate, pro and con, that  preceded  the call of the question on the proposal,  so as to serve  as a record  for future  reference of why a particular action  was approved (or disapproved) or decision  made.

Executive session  minutes  (which should  be prepared and maintained separate and apart  from  the  Association’s open  session  minutes  of board  and  membership meetings) should   reflect  the  deliberations and  reasoning behind  actions   taken   by  the  board   in executive  session,  as well as the decision(s) that were  ultimately  made.   For example, if the board  were  to give the manager a warning  relating  to substandard  performance, executive session  minutes of that meeting should  be written to reflect what occurred so that a record exists in the event  that an employment dispute erupts at a future  time. The minutes might state  that  “The board  expressed dissatisfaction with the manager’s performance and gave the  manager  a written warning that  failure  to resolve  tardiness and  absenteeism  would result  in her dismissal.  The board  voted not to renew  the manager’s one-year  contract and made the manager’s employment an at-will employment relationship.”
presence of legal counsel,  consideration should  be given  to requesting that  the  attorney maintain   the  official minutes of the  executive  session  meeting  and  that  those  minutes remain  in the files of the attorney. That could be particularly wise and appropriate if it is known  that  there  are  divided  factions  on the board  and, in the same  or other  contexts,  it has  become  apparent that  confidential information — disclosed  and  known  only to the members of the board  in executive  session  or via other  confidential disclosures – has been disseminated  to  others  who   are   outside   the   circle   of  confidentiality  and   fiduciary obligation.

The Open  Meeting  Act does  state,  however,  that  in the  next  open  board  meeting following an executive  session  the minutes of the open  meeting  must include a disclosure, in general  terms,  of the  matters addressed in  the  executive  session  (Civil Code section
4935(e).  To explain  the  distinction between the formal  minutes  of the  executive  session
and the subsequent summary disclosure to the general  membership that  the law requires regarding matters discussed in executive  session, consider a hypothetical executive session called to hear and possibly take action  regarding an owner’s violation of some restriction in the  development’s CC&Rs. The actual  minutes  of the  executive  session  would  probably include  a brief description of the allegations or facts supporting the claim that  the CC&Rs had  been  violated,  a summary of any  rebuttal offered  by the  accused  owner  (if present), and a report on the board’s final decision  to either  authorize disciplinary action  or, in the alternative, to decline to take any action.

The later report in the minutes of the following open meeting of the board regarding what  transpired at that  executive  session  would simply state  that on such-and-such a date the  board  met  in executive  session  to  deliberate and  possibly  take  action  involving  an owner’s alleged violation  of the development’s covenants and restrictions. In other  words, the required summary disclosure to the general  membership of what transpired in an executive  session   is  not  intended to  be  a  republication of the  actual  minutes   of the executive  session  and  the  nature and  scope  of the summary may vary depending on the sensitivity (or lack thereof)  of the matters addressed in the executive  session.   To provide more  information regarding the  discussions that  took  place during  an  executive  session meeting  of the  Board  in a summary disclosure to the  members vitiates  the  meritorious policy justifications for conducting the meeting as an executive session.

The actual  minutes of the  executive  session  should  remain  confidential  unless the Board for good reason  decides  to provide  a more detailed  disclosure to the members of the Board’s actions  and/or deliberations in executive  session.  Although members of nonprofit owners’ associations have  much  broader rights  of inspection and  access  to information than do shareholders or members of other  California corporations as a result  of Civil Code sections   5200-5240,  that   Code  section   specifically  states that   members who  are  not
the board of directors” (Civil Code section 5215(a)(5)(D)).

16.     Minutes of Meetings of the Board Must be “Available” to the Members.

The  minutes, minutes  proposed  for  adoption  that   are   marked to  indicate draft status, or a summary of the  minutes of any  meeting of the  board of directors, other than executive session meetings, must be made available to the  general membership within 30 days of the  date  of the  meeting.  The  minutes, draft  minutes or  summary of the  minutes must   be   provided  to   any   member  upon   request  and   upon    reimbursement  of  the association’s costs  of making that  distribution.   Civil Code section 4850(a).  Subparagraph (a) does  not offer any further clarification of the  phrase “must be made  available” however the  phrase probably requires nothing more  than  that  the  document be  in existence and available for distribution if a request is received from  a member.  Some  associations that maintain a website that  has  a secure “members only” area  with  a pass  word  system often post  minutes of Board  meetings at that  site.

Civil  Code  section  4950(b)  instructs  that   the   annual  policy   statement  that   is distributed to the  members of an owners’ association pursuant to Civil Code section 5310 must  inform  the  members of their right  to obtain copies of board meeting minutes and  of how and  where to do so. That  annual policy statement must  be distributed to the members within 30 to 90  days  prior to the  end  of an  association’s fiscal  year  and  that  distribution must  be done  by individual delivery (Civil Code section 5310(b), 5320,  and 4040),11

II    ”Individual delivery”  is defined in Civil Code section 4040 to include delivery by:  (i) first-class, registered, or certified  mail; or (ii) by email or facsimile transmission, but only if the recipient has consented  to that manner of transmission or delivery.
(CIVIL CODE SECTIONS 4900 – 4950) Prepared by Curtis C. Sproul csproul@sproullaw.com



This article shall be known and may be cited as the Common Interest Development Open Meeting Act.


(a)    General Prohibition of Actions Outside of a Board Meeting. The board shall not take action on any item of business outside of a board meeting.

(b)     General Prohibition Against Conducting Meetings by Email or Written Consent.

(1)    Generally. Notwithstanding Section 7211of the Corporations Code,the board shall not conduct a meeting via a series of electronic transmissions,including, but not limited to, electronic mail, except as specified in paragraph (2).

(2)        Exception for Consent Action in an Emergency. Electronic transmissions may be used as a method of conducting an emergency board meeting if all directors, individually or collectively, consent in writing to that action, and if the written consent or consents are filed with the minutes of the board meeting. These written consents may be transmitted electronically.


(a)    General Rules of Four Days’ Notice.  Except as provided in subdivision (b), the association shall give notice of the time and place of a board meeting at least four days before the meeting.

(b)    Other Situations  Where Less or Other Notice is Required.

(1)    No Notice Required of Emergency Meetings [Although not stated, these are probably MEMBER notice requirements]. If a board meeting is an emergency meeting held pursuant to Section 4923, the association is not required to give notice ofthe time and place ofthe meeting.
(2)    Two Days Notice of Non-Emergency, Stand-Alone Executive Sessions. If a nonemergency board meeting is held solely in executive session, the association shall give notice of the time and place of the meeting at least two days prior to the meeting.

(3)     Governing Documents Can Call for Longer Notice and if so, That Notice Must be
Followed.   If the association’s governing documents require a longer period of
notice than is required by this section, the association shall comply with the period stated in its governing documents.

(c)    Method of Providing Notice is “General Delivery”.  Notice of a board meeting shall be given by general delivery pursuant to Section 4045. [This means by first-class, certified or registered mail; email or FAX (if the recipient has consented); on an association television channel; or posting is a prominent  location in the development that has been designated for posting in a general notice)] . I a member specifically asks for individual delivery then “general delivery” means individual delivery.
(d)     Notice of the Board Meeting  Must Include an Agenda. Notice of a board meeting shall contain the agenda for the meeting.


An emergency board meeting may be called by the president of the association, or by any two directors other than the president, if there are circumstances that could not have been reasonably foreseen which require immediate attention and possible action by the board, and which of necessity make it impracticable to provide notice as required by Section 4920.


(a)    Right to Attend  Open Meetings; Conference Call Meetings. Any member may attend board meetings, except when the board adjourns to, or meets solely in, executive session. As specified in subdivision (b) of Section 4090, a member of the association shall be entitled  to attend a teleconference meeting or the portion of a teleconference meeting that is open to members, and that meeting or portion  of the meeting shall be audible to the members in a location specified in the notice of the meeting.

(b)     Right of Members to Speak at Open Meetings.  Reasonable Time Limits are OK. The board shall permit any member to speak at any meeting of the association or the board, except for meetings of the board held in executive session. A reasonable time limit for all members of the association to speak to the board or before a meeting of the association shall be established by the board.


(a)    General Rule: Members’ Rights to Raise Other Issues. Except as described in subdivisions (b) to (e), inclusive, the board may not discuss or take action on any item at a nonemergency meeting unless the item was placed on the agenda included in the notice that was distributed pursuant to subdivision (a) of Section 4920.This subdivision does not prohibit  a member or resident who is not a director from speaking on issues not on the agenda.

(b)     Brief Responses to Statements: Requests for Clarification. Notwithstanding subdivision (a), a director, a managing agent or other agent of the board, or a member of the staff of the board, may do any ofthe following:
(1)    Briefly respond to statements made or questions posed by a person speaking at a meeting as described in subdivision (b) of Section 4925.
(2)    Ask a question for clarification,make a brief announcement, or make a brief report on the person’s own activities, whether in response to questions posed by a member or based upon the person’s own initiative.

(c)    Other Permitted  Off-Agenda Responses. Notwithstanding subdivision (a), the board or a director, subject to rules or procedures of the board, may do any of the following:

(1)        Providing References or Resources for Factual Information. Provide a reference to, or provide other resources for factual information to, its managing agent or other agents or staff.

(2) Requests to Management to Investigate and Report Back at a Later Meeting. Request its managing agent or other agents or staff to report back to the board at a subsequent meeting concerning any matter, or take action to direct its managing agent or other agents or staff to place a matter of business on a future agenda.
(3)     Request to Management to Perform  Administrative Actions. Direct its tor other agents or staff to perform administrative  tasks that are necessary to carry out this section.

(d)     Need to Take Emergency or Immediate Actions That Could Not Make the Agenda; Old Business. Notwithstanding subdivision (a), the board may take action on any item of business not appearing on the agenda distributed  pursuant to subdivision (a) of Section 4920 under any of the following conditions:

(1)    Emergency Situations. Upon a determination made by a majority of the board present at the meeting that an emergency situation exists. An emergency situation exists if there are circumstances that could not have been reasonably foreseen by the board,that require immediate attention and possible action by the board, and that, of necessity, make it impracticable to provide notice.

(2)        Need for Immediate Action. Upon a determination made by the board by a vote of two-thirds of the directors present at the meeting, or, if less than two-thirds
of total membership of the board is present at the meeting, by a unanimous vote of the directors present, that there is a need to take immediate action and that the need for action came to the attention of the board after the agenda was distributed  pursuant to subdivision (a) of Section 4920.

(3)         Business That Was On the Agenda for the Last Meeting and Continued. The item appeared on an agenda that was distributed  pursuant to subdivision (a) of Section 4920 for a prior meeting of the board that occurred not more than 30 calendar days before the date that action is taken on the item and, at the prior meeting, action on the item was continued to the meeting at which the action is taken.

(e)    Obligation to Identify Subparagraph (d) Action Items to the Members.  Before discussing any item pursuant to subdivision (d), the board shall openly identify the item to the members in attendance at the meeting.

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(a)    The board may adjourn to, or meet solely in, executive session to consider: (I) litigation, (II) matters relating to the formation of contracts with third parties, (Ill) member discipline, (iv) personnel matters, or (v) to meet with a member, upon the member’s request,regarding the member’s payment of assessments, as specified in Section 5665.

(b)        The board shall adjourn to, or meet solely in, executive session to discuss member discipline, if requested by the member who is the subject of the discussion. That member shall be entitled to attend the executive session.

(c)    The board shall adjourn to, or meet solely in, executive session to discuss a payment plan pursuant to Section 5665.

(d)     The board shall adjourn to, or meet solely in, executive session to decide whether to foreclose on a lien pursuant to subdivision (b) of Section 5705.

(e)    Any matter discussed in executive session shall be generally noted in the minutes of the immediately following meeting that is open to the entire membership.


(a)    General Statement of the Obligation to Prepare Minutes  or Draft Minutes Within 30
Days. The minutes, minutes proposed for adoption that are marked to indicate draft status, or a summary of the minutes, of any board meeting, other than an executive session, shall be available to members within 30 days of the meeting. The minutes, proposed minutes, or summary minutes shall be distributed  to any member upon request and upon reimbursement ofthe association’s costs for making that distribution.

(b)        Obligation to Notify Members of Right to Minutes in the Annual Policy Statement.  The annual policy statement, prepared pursuant to Section 5310, shall inform the members of their right to obtain copies of board meeting minutes and of how and where to do so.


(a)    A member of an association may bring a civil action for declaratory or equitable relief for a violation of this article by the association, including, but not limited to, injunctive relief, restitution, or a combination  thereof, within  one year of the date the cause of action accrues.

(b)     A member who prevails in a civil action to enforce the member’s rights pursuant to this article shall be entitled  to reasonable attorney’s fees and court costs, and the court may impose a civil penalty of up to five hundred dollars ($500) for each violation, except that each identical violation shall
be subject to only one penalty if the violation affects each member equally. A prevailing association shall
not recover any costs, unless the court finds the action to be frivolous, unreasonable, or without foundation.

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This is part of the August 8, 2014 online edition of The Mountain Enterprise.

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