Due to the growing impact of the coronavirus on all industries, I decided to publish a newsletter today rather than wait until Sunday. With rising concerns about what is now a pandemic, boards of directors are uncertain what actions, if any, they should take.
Following are questions we received about the coronavirus and general guidelines I believe are prudent. While boards are obligated to make good faith decisions in the best interests of the membership, we are in uncharted territory when it comes to the coronavirus. -Adrian
#1. Conducting Board Meetings. Would associations be justified in holding their board meetings via conference calls as “emergency meetings” due to the declared pandemic, and then ratifying those actions after the health issues are over? -Russ H.
RESPONSE: Probably not.
Older board members with underlying medical conditions are justifiably concerned about possible exposure to the coronavirus. There are steps they can take to minimize their risk and still fulfill their duties as directors.
Conference Phone. Concerned directors can attend meetings electronically via telephone, provided they can hear all other directors in the meeting and all other directors can hear them. This is easily accomplished with a conference phone. Attendance in this manner counts as if the director were physically present in the meeting. (Corp. Code §7211(a)(6).)
The Entire Board. If ALL directors wish to attend a board meeting by telephone, they can do so. However, notice of open meetings must identify at least one physical location with a conference phone where homeowners can attend the meeting and listen to the board conduct business. (Civ. Code §4090(b).) The statute does not require any of the directors be physically present at the meeting location--only a representative of the board (such as the manager).
Emergency Meeting? What if the management company has suspended all meeting attendance for their managers due to the coronavirus? If no other representative can be found to set up the conference phone, can the meeting still be held as an emergency meeting. Unfortunately, this does not meet the definition of an emergency. An emergency is defined as "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" to the membership. (Civ. Code §4923; Civ Code §4930(d)(1).)
Fortunately, technology has reached the point where a call-in number can be published along with the agenda so members who wish to attend can also call into the meeting. All attendees except the board should mute their phones and only listen to the meeting. Except for open forum, members cannot participate in the board's meeting. For associations where there may be a large number of attendees, boards should consult with a technology expert to determine which call-in service best serves their needs.
#2. Close Pool/Spa Facilities? Would you advise boards close their pool/spa facilities for the duration? -Russ H.
RESPONSE: Yesterday, Governor Newsom limited all public gatherings in the state to no more that 250 people. Los Angeles announced it was limiting gatherings to no more than 50 people. Disneyland and all other theme parks in California announced they were suspending operations to help limit the spread of the coronavirus. If boards want to temporarily close their pool/spa facilities, they can certainly do so. If directors are uncertain what to do, they can consult health care professionals for recommendations, as well as consulting legal counsel.
#3. A Quarantined Resident. How should boards respond if they learn that a resident tested positive for the coronavirus? Do they have an obligation to inform residents? Is there liability for the board if it does not? -Anonymous
RESPONSE: This raises conflicting interests--a person's privacy about their medical condition and the membership's safety.
Authorized Disclosure. If the person with the coronavirus authorizes full disclosure, the board can disclose the person's name to the membership. This allows residents who had contact with the person to immediately self-quarantine and get tested for the virus.
Before doing so, I encourage two precautionary steps for boards. First, the authorization should be in a written communication from the person or the person's attorney. It should never be based on hearsay and rumors.
Second, the disclosure should be limited to members and residents. Particular vendors who may have had contact with the person could also be alerted. The board should not broadcast the information outside of the community.
No Authorization. If the infected person tells the board in confidence that he contracted the coronavirus and does not want anyone to know, the board may still have a duty to notify the membership. However, it would do so without disclosing the person's name. The board would simply report, “A resident has reported testing positive for the coronavirus.”
A disclosure, however limited, alerts residents to take extra precautions to protect themselves. In addition to giving notice, the board should contact the Centers for Disease Control. The CDC has the power to make additional disclosures, trace contacts, quarantine individuals, and take other actions it deems medically necessary.
Self-Quarantine. What if the person does not have the coronavirus—he is simply self-quarantining as a precaution? If that is all he is doing, I don't believe the board has an obligation to notify the membership.
Potential Liability. There is always the potential for liability if a board becomes aware of a threat to their community and does nothing. If, as a result of the failure to disclose, members fall ill and some die from the illness, lawsuits will likely follow. Accordingly, silence may not be the best course of action.
Recommendation: As volunteers, boards are allowed to seek expert advice. When confronted with issues involving the coronavirus, directors should not make decisions based solely on recommendations in a newsletter--whether mine or someone else's. They should contact legal counsel and the CDC for guidance.
#4. Law Firm Disaster Plan. Two years ago, our firm established a disaster continuity plan. With our existing onsite computer servers, we were vulnerable to a complete shutdown of the firm's operations in the event of a natural disaster.
To address the problem, we "virtualized" our operations, i.e., we moved all operations into the cloud. Instead of onsite servers, we moved everything to servers housed in hardened facilities with multiple redundancies for power, cooling, and backup systems in areas of the U.S. with little or no vulnerability to natural disasters.
Seamless Operation. Since our document management system, accounting programs, office productivity suite, time tracking software, internal communications and phones are now in the cloud, our entire law firm--all attorneys, paralegals, staff members and executive team--can work remotely from any device. If some or most were quarantined at home (or on a cruise ship), we can continue to operate without missing a beat.
Zombie Apocalypse. When we did our disaster planning, we thought it would be an earthquake or fire. We never imagined it would be a zombie apocalypse. Boards should take stock of their own planning for a natural disaster. At some point, their association may have to wrestle with the aftermath of a major earthquake or fire.
I am pleased to announce Tonya Todd joined our team of attorneys.
Former JAG Officer. As a Captain in the Army and a JAG officer, Tonya led the prosecution of felony crimes including sexual assaults, larceny, aggravated assaults, child abuse, fraud, conspiracy, and homicides.
Magistrate Judge. Tonya also served as a Magistrate Judge and presided over pretrial confinements, reviewed evidence, made findings, issued warrants and ruled on law enforcement applications for search and seizure authorizations. In addition, Tonya authored over 150 legal opinions on matters such as sexual harassment, discrimination, ethics, and environmental law.
Education. Tonya received her Bachelor of Arts in Sociology from Sacramento State University in Sacramento, California. She then went on to earn a Juris Doctorate from the Hastings College of Law in San Francisco, California.
We are delighted to have Tonya join our team. If your association needs legal services, contact us for a proposal.