VIRTUAL
BOARD MEETINGS
QUESTION:
If
an HOA’s CC&Rs and bylaws do not specify that an HOA and HOA board must have
physical (i.e. face-to-face) meetings, may the HOA and HOA board hold
exclusively telephonic meetings and simply never meet in the same room?
ANSWER: The Corporations Code allows directors to participate in
meetings through the use of a conference telephone, electronic video screen
communication, or electronic transmission. As long as all members participating
in the meeting are able to hear one another and participate in the meeting, it
constitutes "presence in person" at the meeting.
Corp. Code §7211(a)6.
However, HOAs are also
subject to the
Open Meeting Act, which allows members to attend meetings of the board of
directors. If the board can structure a telephone or video conference meeting in
such a way that all homeowners can "attend" the meeting, and can participate in
an
Open Forum at that meeting, then "virtual meetings" are permissible.
DIRECTOR IN A COMA
QUESTION: Our
board recently appointed new directors after the Annual Meeting failed to
achieve a quorum. One of the directors they appointed, a former board member,
has been in a coma for the past five months. Though tragic, is this legal?
ANSWER:
Directors have a duty to appoint competent, trustworthy, and independent persons
to the board. Lewis v. Elk Hills 36 Oil Co. (1929) 103 Cal.App. 14. Since
the appointee is in a coma, he cannot perform his duties as a director.
Therefore, it would be improper to appoint this person to the board.
POLITICAL CONTRIBUTIONS
QUESTION:
The board special assessed the membership 5% to contribute to a political action
committee, which is currently suing the city to block construction of a nearby
city park. What are our options for stopping the board?
ANSWER: Your options are limited. California Courts have held that
boards have broad authority under the CC&Rs to act in the best interest of their
associations. In
Finley v. Superior Court, the court found that political contributions were
not illegal and that boards could take actions they felt were in the best
interest of the association, even if members disagreed. As a result, unless your
governing documents provide otherwise, your board can impose a 5% special
assessment to raise funds for a political action committee. If the membership is
unhappy with the board's actions, they have recourse--they can recall the board
and elect directors who agree with their position.
GRANDFATHERING
QUESTION: Looking for
legal definition of the term “grandfathering.”
ANSWER: Black’s Law Dictionary defines “grandfather clause” as “an
exception to a restriction that allows all those already doing something to
continue doing it even if they would be stopped by the new restriction.” If, for
example, the board
adopted a rule that pets over 50 pounds were prohibited, the board could
grandfather existing oversize pets. Therefore, the owner of a 75 pound dog who
resides in the development prior to the adoption of the restriction could keep
the pet. However once the pet died, his next pet would have to comply with the
new restriction.
RECUSED
FROM VOTING
QUESTION:
If a board member recuses himself from a vote, must he leave the meeting? If he
does not, can he be asked to leave an executive meeting?
ANSWER:
Recusal normally occurs when a director has a
conflict of interest or prejudice concerning a particular matter. A conflict
of interest is any situation in which financial or other personal considerations
may unduly influence the director's judgment. This includes matters such as a
disciplinary action against the director for violating the CC&Rs or voting on a
potential contract with a company owned by a close relative of the director.
Recusal. In each case, the director has
a personal interest in the outcome of the vote--an interest not shared by the
other directors. In such instances, the interested director should voluntarily
recuse himself by leaving the meeting so the remaining directors can freely
discuss and vote on the issue. If he were to stay, his presence could inhibit
discussion and influence the vote.
Refuses to Leave. If the interested
director does not leave voluntarily, the board can ask him to leave. If he
refuses to leave, the board can adjourn the meeting to another location where
they can hold the discussion and vote without the interested director. Under
those circumstances, the board might also consider a
vote of censure against the interested director for his refusal to recuse
himself. Once the vote is taken, the recused director may return to the meeting.