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BOARD MEETINGS BY E-MAIL

Q. 
May our board meetings be held by email communication?

A. 
No. Members of the board may participate in a meeting through the use of a conference telephone or similar communications equipment, so long as all members participating in the meeting can hear one another. It is necessary that board members be able to confer with each other in order to comply with their legal duties. Top


DELAY OF ANNUAL MEETING

Q. 
The board of directors of our homeowners association has not held an annual meeting to elect new directors for more than 18 months even though our bylaws require an annual meeting to be held. I have requested that our "annual" meeting be held, but have been ignored. What can I do?

A. 
If a corporation with members is required by its bylaws to hold a regular meeting and fails to do so for a period of sixty days after the date designated, or if no date has been designated, for a period of fifteen months after its last regular meeting, the superior court of the county may summarily order a meeting to be held upon application of a member after notice to the board giving it an opportunity to be heard. Top


ADJOURNMENT

Q. 
I'm a director of a homeowner's association.  Can you clarify the meaning of the word "adjournment?"

A. 
The word has two meanings.  Most commonly, it refers to the last stage of a board or shareholder's meeting when the business of the meeting is concluded and the meeting is ended, with the person presiding announcing, "The meeting is adjourned."

The term is also used if a board or shareholder's meeting is carried over to another time when unfinished business can be concluded.  The second meeting is then referred to as the "adjourned meeting." Top


MINIMUM NUMBER OF MEETINGS

Q. 
The board of directors of our homeowners association rarely holds meetings. Our bylaws do not specifically address this issue. How often are boards required to have meetings?

A. 
Normally, the frequency of board meetings is set forth in the association bylaws, or in some instances, in the CC&Rs. If your governing documents are silent concerning the number of board meetings to be held each year, there is still a statutory minimum. The California Corporations Code requires non-profit mutual benefit corporation boards to meet at least twice each year. Also, in accordance with California Civil Code 1365.5, a board of directors of an association must review its finances at least each quarter year. Consequently, a board must meet at least four times each year.

Whether a board of directors should meet more often than four times each year depends upon the amount of business to be conducted by the association. Top


RECALL OF BOARD

Q. 
What are the most common reasons that boards of Directors of homeowner associations are recalled?

A. 
The most common reasons for recalls are:

(1) The board violates or has violated the law;

(2) The board has failed to operate within the business judgment rule (See Corp.  Code Section 7231);

(3) They fail to plan ahead, resulting in large special assessments;

(4) board members act in an autocratic, arrogant, and secretive manner;

(5) Deferred maintenance has been allowed, resulting in lower property values and the potential for special assessments;

(6) They refuse to enforce the CC&Rs and/or Rules;

(7) The board refuses to permit members of the association to adequately address issues at board meetings;

(8) They fail to treat all members equally;

(9) The board misuses "executive session"; and

(10) The board's collection policy is either too harsh or too lenient. Top


PROCEDURE FOR RECALL

Q. 
The majority of homeowners in our association are outraged by the conduct of our board of directors.  The next election won't be held for another eight months.  Our bylaws are silent on the subject of recalling the board. What can we do?

A. 
The California Corporations Code sets forth the procedure for recalling a board of directors.  It involves calling for a special meeting, sending out proxies and then voting.  An association attorney can assist you with the details. Top


RECORDING OF BOARD MEETINGS

Q. 
Can our homeowners association board prohibit the recording of our board meetings?

A. 
Yes. While there is no California law that directly addresses this issue, there are several persuasive legal authorities which indicate that the board has authority to prohibit recording of board meetings.

First, the tape recording of meetings is the equivalent of having non-members of the association attend meetings. In American Center for Education v. Caunar, the Second District Court in California held that it is up to the board to decide whether persons other than directors (and members) may attend meetings.

Also, association board meetings are not public meetings. Civil Code Section 1363.05 permits only members to attend board meetings. According to the decision in Coulter v. Bank of America, a corporation (including a non-profit mutual benefit corporation) may bring an action for violation of the Privacy Act otherwise known as Penal Code Section 632:

(a) Every person who, intentionally and without the consent of all parties to a confidential communication, by means of any electronic amplifying or recording device, eavesdrops upon or records the confidential communication, whether the communication is carried on among the parties in the presence of one another or by means of a telegraph, telephone, or other device, except a radio, shall be punished by a fine not exceeding two thousand five hundred dollars ($2,500), or imprisonment in the county jail not exceeding one year, or in the state prison, or by both that fine and imprisonment.

Lastly, Civil Code Section 1363 (d) states:

Meetings of the membership of the association shall be conducted in accordance with a recognized system of parliamentary procedures or any parliamentary procedures *** the association may adopt.

Thus, the board has power to adopt any reasonable rules or procedures relating to the conduct of meetings.

As a practical matter, it is important to realize that the use of recording devices can have a potentially "chilling effect" on board members as well as other members in attendance. It is important that all members in attendance be willing to voice a full range of opinions and comments so that decisions are made with all available information. It is also likely that recording will discourage members from serving on the board. Top


RECALL OF BOARD

Q. 
The board of directors of our association refuses to hire a professional management company and seems to violate every known rule. Can the board be recalled?

A. 
Yes. Special meetings of members for any lawful purpose may be called by the board, the chairman of the board, the president, or such other persons, if any, as are specified in the bylaws. In addition, special meetings of members for any lawful purpose may be called by five percent or more of the members.

You should consult with an association lawyer in order to make absolutely certain that the Notice to Members and Proxy are correctly drafted and that all requirements of the Corporations Code and your governing documents are met. Top


ATTENDANCE OF RENTERS AT BOARD MEETINGS

Q. 
The board of directors of our homeowners association will not permit renters to attend board meetings. Can they legally do this?

A. 
Yes. Civil Code Section 1363.05 permits owners to attend board meetings other than executive sessions to consider litigation, contracts with third parties, member discipline, or personnel matters. The code does not authorize renters to attend.

Notwithstanding the Code, a board may permit renters to attend board meetings and it is generally a good practice to allow them to attend, assuming they act appropriately. It is also a good practice for a board to have a sign in sheet at all meetings in order to account for all people attending. Top


FREQUENCY OF MEETINGS

Q. 
The board of directors of our homeowners association rarely holds meetings. Our bylaws do not specifically address this issue. How often are boards required to have meetings?

A. 
Normally, the frequency of board meetings is set forth in the association bylaws, or in some instances, in the CC&Rs. If your governing documents are silent concerning the number of board meetings to be held each year, there is still a statutory minimum. The California Corporations Code requires non-profit mutual benefit corporation boards to meet at least twice each year. Also, in accordance with California Civil Code 1365.5, a board of directors of an association must review its finances at least each quarter year. Consequently, a board must meet at least four times each year.

Whether a board of directors should meet more often than four times each year depends upon the amount of business to be conducted by the association. Top


PARLIAMENTARY PROCEDURES

Q. 
Our homeowner association bylaws require that we adopt a system of Parliamentary Procedure. What is Parliamentary Procedure and what is its purpose as it relates to a homeowner association?

A. 
Parliamentary Procedure is a set of rules of order. Following is one of the basic rules:

All members have equal rights, privileges and obligations which are to be ensured by the chairperson;

To learn more of the basic rules, consult with an Attorney who specializes in HOAs. Top


EMERGENCY MEETINGS

Q. 
Who can call an emergency board meeting?

A. 
The president of the board or any two directors other than the president. A notice and agenda are required even though less than four days notice is provided. Members can attend emergency board meetings excluding executive sessions.
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LOT OWNED BY CORPORATION

Q. 
If a lot is owned by a corporation, may the corporation send a representative to attend board meetings?

A. 
Yes. In fact, the corporation can designate a person to run for the board if it wants to do so.
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GIFT TO MEMBERS

Q. 
To maximize our chances of obtaining a quorum, is it legally permissible for our condominium association to enter the names of all voters in a raffle for some type of gift?

A. 
Yes. As long as no consideration is given other than voting, you may do so without the need to register the raffle with the office of the Attorney General. Some associations raffle off a credit for one month's assessment, others offer a gift card. Raffles almost always increase voter participation and the cost of a raffle can be far less than holding a second election.
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VOTE ENDS IN TIE

Q. 
What should we do if the election of directors results in a tie?

A. 
The nominees who are tied can either compete in a runoff election or can simply flip a coin if they are agreeable. If a runoff election is scheduled, the newly elected directors who are not tied should begin serving immediately.  Top







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