All About Meetings
If you have found yourself reading this article, you are likely serving on the Board of Directors for your association. If you are new here, please refer to our previous articles in this several part series, which provide background on who makes up a board and what roles each director and officer play, as well as what fiduciary duties are owed by a director to the membership. These articles are designed to help new and returning board members to understand what they have volunteered for and how to assist in best serving their association.
What is a Board Meeting?
A “board meeting” is defined in California Civil Code § 4090 as: (i) 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”; or (ii) 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.” It is important to note that the Civil Code provides that a teleconference meeting must be conducted in a manner that “protects the rights of the members of the association and otherwise complies with the requirements of the [Davis-Stirling Act].” (Civ. Code § 4090(b).)
In addition, except for a meeting that will be held solely in executive session, as explained below, the notice of the teleconference meeting must identify at least one physical location where members of the association may attend the meeting. At least one director or a person designated by the board must be present at the designated physical location. As a result of the COVID-19 pandemic, many boards have inquired as to whether the requirement of having at least one director or person designated by the board present at a physical location is still required. This is a difficult question, and boards should reach out to their legal counsel to obtain guidance on this matter.
The Open Meeting Act
California law provides rules for governing board meetings which can be found in Civil Code § 4900, et seq., appropriately known as the “Open Meeting Act.” The governing law set forth in the Open Meeting Act provides, for example, that boards are prohibited from taking action on “any item of business” outside of an official board meeting. (Civ. Code § 4910(a)). The Open Meeting Act was created to ensure that members are kept up to date with association matters by providing members with, among other rights, the right to attend all board meetings (except Executive Session meetings), advance notice of such meetings, and access to meeting minutes.
Types of Meetings
Open Session Board Meetings
Typically, regular meetings of the board are set by the board, unless the Bylaws prescribe otherwise. The frequency of regular meetings is specified in the Bylaws, but generally, regular meetings of the board are held monthly. In order to hold a properly noticed regular board meeting, the board must give the membership notice at least four (4) days before the meeting. (Civ. Code § 4920(a)). The governing documents may require a longer notice period. If so, the longer notice period must be complied with. (Civ. Code § 4920(b)(3)). Notice of a meeting must contain the date, time and place of the meeting, be given by general delivery, and contain an agenda for the meeting. (Civ. Code § 4920(c)-(d)). Open Session board meetings are open to the association’s homeowners to attend and observe, and must allow for a homeowner forum during the meeting where owners can be heard. (Civ. Code § 4925).
Executive Session Board Meetings
Executive Session meetings of the board are closed to the membership. Pursuant to Civil Code § 4935, the board is permitted to meet in executive session only for the following six scenarios, to consider: (i) litigation; (ii) matters related to the formation of contracts with third parties; (iii) member discipline; (iv) personnel matters; (v) to meet with a member, at the member’s request, regarding delinquent assessments, payment plans, and/or member discipline; and (vi) to decide whether to foreclose on a lien. If you have a question about whether a specific topic is included in the scenarios set forth above, your board should reach out to legal counsel to obtain guidance. Any matter discussed in Executive Session “shall be generally noted in the minutes” of the subsequent meeting that is open to the entire membership. (Civ. Code § 4935(e)). In order to hold a properly noticed Executive Session meeting, the board must provide notice to the membership at least two (2) days before the meeting. (Civ. Code § 4920(b)(2)). Notice of Executive Session meetings must contain the date, time and place of the meeting, be given by general delivery, and contain an agenda for the meeting; however, due to the confidential nature of Executive Session meetings, the agenda should be general in nature. (Civ. Code § 4920(c)-(d)).
Emergency Board Meetings
A board can hold an Emergency Meeting in the event that circumstances arise which could not have been reasonably foreseen and which require immediate attention and possible action by the board, and which of necessity make it impracticable to provide notice to the membership. (Civ. Code § 4923). An emergency meeting of the board may be called by the president or by any two members of the board other than the president. (Civ. Code § 4923). An Emergency Meeting may be held via email (see below) or telephone/video conference. (Civ. Code § 4090(b)). No notice is required to the membership for an Emergency Meeting, assuming all of the requirements set forth above are met. (Civ. Code § 4920(b)(1)).
Special Meetings are held in intervals between regular meetings, usually to conduct business that must be handled prior to the next regularly scheduled meeting, and may be either Open Session, Executive Session, or both. Special meetings can be called by the board or by the membership, if at least 5% of the members sign a petition to hold a special meeting. Notice requirements for a special meeting depend on whether they were called by the board or the membership. If your association has received a petition of the membership to hold a special meeting for any lawful purpose, it is important that your board should reach out to legal counsel for guidance to ensure compliance with notice deadlines and requirements.
Civil Code § 4910(b) states that boards “shall not conduct a meeting via a series of electronic transmissions, including, but not limited to, electronic mail,” except for an Emergency Meeting, so long as all the directors on the board consent in writing conducting such meeting via electronic transmission. Thus, e-mail meetings are not permitted except in the case of an Emergency Meeting where all directors on the board agree to have such Emergency Meeting by e-mail. Non-business and administrative emails such as setting dates for meetings, and requesting agenda items, do not classify as conducting a meeting and therefore are permitted. Boards should be mindful that their email communication may be discoverable in litigation.
It is important to note that whenever notice of a board meeting is required, as set forth above, the notice is required to contain the date, time and place of the meeting, be given by general delivery, and contain an agenda for the meeting. (Civ. Code § 4920(c)-(d)).
Annual Membership Meeting
In addition to and separate from board meetings, associations are also required to notice and hold a meeting of the membership for the election of directors. Generally, elections are held annually; thus, an annual meeting of the members to elect a board of directors should be noticed and held by the association. However, some bylaws may provide that director elections occur every two years and may allow for membership meetings to be held in accordance with the election, or every two years. In another alternative, the bylaws may provide that directors be elected every two years but require that an annual meeting take place every year. It is important to review your association’s governing documents to determine the duration of a term for a director and confirm that the board is properly holding the association’s annual meeting. If quorum is required for the annual meeting, and quorum is not met, the members may adjourn the meeting and set a new meeting date. Directors will remain on the board until their successors are formally elected; thus, if the meeting is postponed, directors remain on the board during that time.
The notice requirements and timeline for a membership meeting and election are fairly detailed and boards should plan far ahead for such meetings. Boards can expect the process to take approximately 120 days, and therefore, should plan well in advance to ensure that they meet the notice requirements for an annual meeting for an election of directors. Please see our articles entitled, Election Bill Becomes Law and SB323 Pre-Election Notices for more information on holding proper elections.