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Homeowner Association Law And Remedies
January 3, 2020
Davis-Sterling Open Meeting Act Frequently Asked Questions
What Is The Open Meeting Act?
The Open Meeting Act is a law that requires homeowner associations to hold open meetings and allow the members to speak publicly at those meetings. HOA boards have broad powers to affect large numbers of individuals through their decisions and actions. Hence, the Open Meeting Act requires open governance meetings, with notice, agenda and minutes requirements, and strictly limit closed executive sessions. These provisions parallel California’s open meeting laws regulating government officials, agencies and boards.
The Davis-Sterling Open Meeting Act is found in California Civil Code sections
4900 through 4955.
Is Your HOA Making Decisions Without First Meeting To Discuss And Vote On It?
If they are, they are in violation of the law. HOAs are required to hold a board meeting before taking action on an item of business.
A board meeting is 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.”
In other words, a board meeting is a gathering of a quorum of board members to discuss board business.
An item of business is “any action 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 comprising less than a quorum of the board.”
Simply stated, if the board can take action on something, it’s an item of business.
Is Your HOA Board Discussing HOA Business Via E-Mail?
In general, e-mail meetings are not allowed. More specifically, “the board shall not conduct a meeting via a series of electronic transmissions, including, but not limited to, electronic mail.” This includes the use of text messages and instant messaging services like Facebook Messenger and WhatsApp.
Emergency meetings are the exception to this rule, but only if certain procedures are followed:
All directors must consent in writing; and
The written consents must be filed with the meeting minutes.
Except for emergency meetings, HOA boards must provide notice of the time and place of a meeting at least four days before the meeting. If the meeting is an executive session, the board must provide two days’ notice of the meeting. If the governing documents (by laws and CC&Rs) require longer notice, then the HOA must provide that longer notice.
Meeting notices must also include an agenda that lists items to be discussed.
Have You Asked To Be Provided With Notices And Agendas Of Board Meetings? Has Your Association Provided Them To You?
HOA boards are required to provide meeting notices and agendas by general delivery. General delivery means that the board can post the notice and agenda in a prominent location if the location has been designated for the posting of general notices by the association in the annual policy statement. General delivery also means that the board can include notices and agendas in billing statements or newsletters.
If you would like individual delivery, it’s your right to ask for it and to receive it. With individual delivery, the board must send you the notice and agenda by mail, or by e-mail if you consent.
Authority: California Civil Code sections
Has Your Association Excluded You From Meetings?
All homeowners have a right to attend board meetings unless the meeting is an executive session meeting. If the meeting is held by phone, homeowners have the right to listen in.
Has Your Association Prevented You From Speaking At Meetings?
Homeowners have the right to speak at board meetings, except for executive session meetings. The board must establish a reasonable time limit for all homeowners to speak. There does not need to be an agenda item such as “homeowners forum” or similar. If you want to speak at a meeting, you have the right to do so.
Does The Board Discuss Things That Are Not On The Published Agenda?
As a general rule, an HOA board cannot discuss or take action on items that are not on the meeting’s agenda, unless the meeting is an emergency meeting.
Directors may, however, briefly respond to statements made or questions asked by homeowners speaking at the meeting. Directors may also ask a question for clarification, make a brief announcement, or make a brief report on their own activities, whether in response to questions posed by a homeowner or based upon their own initiative. Further, directors may give administrative direction to managers or staff and may take action on items not on the agenda in an emergency or other exigent situations.
Does The Board Meet In Closed, Executive Sessions To Discuss Things That Are Not Permitted To Be Discussed In An Executive Session?
An HOA board may meet in executive session to discuss litigation, matters related to the formation of contracts with third parties, member discipline, personnel matters, or to meet with a homeowner about a payment of assessments. An HOA must meet in executive session to discuss matters pertaining to member discipline, payment plans for delinquent assessments, and whether to foreclose on an assessment lien.
The Civil Code provisions that require HOA boards to hold open meetings and to allow members to speak publicly at them reflect the California Legislature’s recognition that such boards possess broad powers to affect large numbers of individuals through their decisions and actions. These provisions parallel California’s open meeting laws regulating government officials, agencies and boards. Both statutory schemes mandate open governance meetings, with notice, agenda and minutes requirements, and strictly limit closed executive sessions.
Has The Association Refused To Provide You With Copies Of Minutes?
If you request meeting minutes, your HOA must let you have them.
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 of the association’s costs for making that distribution.
Now, let’s put this all together into what a hypothetical legal action might look like.
Open Meeting Act Violation – Overview of the Dispute Resolution Process
Let’s start with a brief case study. Can you spot all of the Open Meeting Act violations?
The Board of Directors of the Acme Homeowners Association consists of five members: Robert, Ping, Evelyn, Sally, and Lucy. Acme’s by laws define a quorum as a majority of the board. In this case, a majority of the board is three board members.
Robert is the HOA president and is concerned about increasing reserves and rising management costs. Robert emails Ping and Evelyn about these matters. Ping “replies all” and adds to the discussion.
Robert is aware of the Open Meeting Act rules around e-mail meetings, so he schedules an executive session meeting two days out and posts a notice and agenda on the community bulletin board. Robert feels that the executive session will fix the e-mail meeting violation.
About 15% of the homeowners of Acme have requested to be e-mailed copies of meeting notices. Robert does not send the agenda to his property manager. As a result, homeowners do not receive an e-mailed copy of the agenda.
Robert’s executive session agenda contains these items:
Property manager costs
On the meeting date, Robert and the rest of the board meet in executive session to discuss reserve funding and property manager costs. Because it is an executive session, homeowners are not permitted to attend.
Did you find the violations? There are at least ten of them.
Violation 1: E-mail meetings. Robert and Ping violated the Open Meeting Act by conducting an e-mail meeting. Robert’s scheduling of an executive session does not fix the e-mail meeting violation.
Violation 2: Failure to provide notice of meeting. A meeting notice and agenda were not posted prior to the e-mail meeting. Therefore, the notice and agenda requirements have been violated.
Violation 3: Discussing items of business not on an agenda. Since the meeting occurred by e-mail without an agenda, all discussions were discussion of items of business not on the agenda.
Violation 4: Excluding homeowners from meetings. The meeting occurred by e-mail and because of this, homeowners were necessarily excluded.
Violation 5: Not permitting homeowners to speak at meetings. Since the meeting occurred by e-mail, homeowners could not speak.
Violation 6: Meeting minutes not available. It’s highly improbably that Acme’s Board would prepare meeting minutes, especially since there was no agenda.
Violation 7: Failure to give individual notice. Here, about 15% of the homeowners requested individual notice but did not receive it.
Violation 8: Conducting executive session meetings on topics inappropriate for an executive session. Executive sessions are strictly limited to a handful of certain topics. Reserve funding and property manager costs are not appropriate topics to be discuss in an executive session.
Violation 9: Excluding homeowners from meetings. The meeting took the form of an executive session closed to homeowners. As a result, homeowners were excluded from the meeting.
Violation 10: Not permitting homeowners to speak at meetings. Since the meeting was a closed executive session, homeowners could not speak.
Resolving The Dispute
of the California Civil Code says that
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.
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 ofup 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.
This means that if you sue and win, you can make the board stop their violations, get up to $500 per violation and your HOA will have to pay your attorney’s fees and court costs. Keep in mind that nothing is guaranteed.
What Is The Process?
The process can take many forms, including sending demand letters describing the HOA’s violations and the amount of money you want in return, following HOA internal dispute resolution procedures, going into alternative dispute resolution, and then when those attempts at resolving the dispute fail, filing a lawsuit.
The one mandatory requirement, however, is California Civil Code section 5930’s requirement that you engage in alternative dispute resolution (ADR), such as a mediation, before you file a lawsuit, unless it is a small claims lawsuit or the dispute is an assessment dispute:
An association or a member may not file an enforcement action in the superior court unless the parties have endeavored to submit their dispute to alternative dispute resolution pursuant to this article.
This section applies only to an enforcement action that is solely for declaratory, injunctive, or writ relief, or for that relief in conjunction with a claim for monetary damages not in excess of the jurisdictional limits stated in Sections 116.220 and 116.221 of the Code of Civil Procedure.
This section does not apply to a small claims action.
Except as otherwise provided by law, this section does not apply to an assessment dispute.
At the mediation, you or your attorney and the HOAs attorney will attempt to negotiate a settlement with the assistance of a mediator. If the mediation is unsuccessful, you can either do nothing or continue the process, which is filing a lawsuit.