A common misconception with a few homeowner association (HOA) members is that there is something improper or something is being done improperly when the board of directors enters into executive session. A common question is why would anything have to be secret and kept from the homeowners? This misconception is not just held by some members of HOAs with their boards of directors, but other organizations are often faced with these types of concerns from their members as well.
First, there is nothing mysterious or improper about a board of directors going into executive session. Executive sessions are a common aspect of parliamentary procedure with any deliberative assembly. A deliberative assembly is a gathering of members who utilize parliamentary procedure for the operation of their gathering or meeting. The terms, “closed session” and “closed-door session” are used interchangeably with the term “executive session.” The term “in-camera” will sometimes be used to represent executive session, but “in-camera” is typically used in court proceedings.
Many of the misunderstandings revolving around HOA meetings and transparency, often originate with state and federal statutes regarding “sunshine laws.” Sunshine laws are statutes, mandating transparency and disclosure in government to the public. This transparency and disclosure encompass the ability of the public to attend governmental meetings and have access to certain governmental records. The purpose of sunshine laws is to improve information flow to the public, uphold ethical standards of the organization, and help thwart fraud and corruption. Sunshine laws originated in 1953 with California’s Brown Act. Now all 50 states have legislated some form of sunshine law or open meeting statutes. In addition, these sunshine laws have been implemented on a federal legislative level since states enacted this type of legislation, for example, the Freedom of Information Act (FOIA) enacted in 1967. Some municipalities have enacted ordinances and regulations even exceeding the requirements of state and federal sunshine laws.
The misconception with sunshine laws regarding homeowner associations is that homeowner associations are not governmental institutions or public institutions. The crucial word in all sunshine or open meeting laws is the word “public.” Granted, a HOA is a quasi-governmental organization, however, it is not public.
Individual state statutes, typically through specific HOA statutes or that state’s nonprofit corporations act, address member’s access to meetings and records. Most states have statutes addressing member’s rights to an organization’s records. Some states have statutes mandating open homeowner association board of directors’ meetings. For example, the California Open Meeting Act, allows the HOA members the right to attend, observe, and even participate at all open board of directors’ meetings. However, the majority of states have no such open meeting requirements of HOA board of directors’ meetings.
The exception to any statute or lack of statute could possibly be the homeowner association’s governing documents. Some governing documents may mandate open board meetings. If there is such a provision in the HOA’s governing documents, then the board meetings need to be open to the membership or whoever is allowed to attend per the particular provision.
Not considering any mandated open meeting requirements, a HOA board of directors or any deliberate assembly has the right per established parliamentary procedure to have open or closed board of directors’ meetings at the board’s discretion. From Robert’s Rules of Order Newly Revised, 11th edition, section §9 “Public Session – A deliberative assembly or committee is normally entitled to determine whether nonmembers may attend or be excluded from its meetings (even when not in executive session).” Robert’s Rules of Order is the most commonly adopted manual of parliamentary procedure in the United States, thus this book is generally considered the standard on parliamentary procedure.
The belief or argument from some that the board of directors cannot have executive sessions during board meetings is a moot point when it clearly states in Robert’s Rules of Order that even open meetings with the membership are not required. Of course, unless there are statutes mandating otherwise about open meetings.
Executive session in parliamentary procedure is any meeting of a deliberative assembly, or a portion of a meeting, in which the proceedings are confidential to the deliberative assembly. When the entire meeting is not in executive session, time for the executive session is allotted for on the agenda. When the board of directors goes into executive session, only the board of directors and other relevant or special parties can be present.
Typically, relevant parties are people that would need to be present to help facilitate the executive session, such as the association manager or the association’s attorney. Other relevant parties are specifically allowed to be present without objection of the board of directors. These relevant parties could be members of the homeowner association (non-board members) who are assisting the board of directors or members (hopefully non-board members) who have been called before the board of directors for a covenant violation.
Executive session discussions of all parties are generally considered confidential, by all parties present. This confidentiality is especially the case with the members of the board of directors, but there are potential consequences for anyone present who breaches the confidential nature of an executive session. In Roberts Rules of Order section §9 “Executive Session – A member…can be punished…if he violates the secrecy of an executive session. Anyone…permitted to be present is honor-bound not to divulge…” Board members could be sanctioned up to being removed from their board position or office, in extreme situations, for a breach of confidentiality.
The reason and necessity of executive session is not secrecy for the sake of secrecy. Certain matters cannot be discussed in an open meeting, such as ongoing legal matters, personnel matters, and issues that revolve around personal privacy. One thing all these matters have in common is if they are not currently a legal matter, they certainly can become a legal matter quickly.
The vast majority of issues addressed in executive sessions are of a legal or potential legal nature.
Legal issues such as covenant violations, membership hearings, vendor issues, and possibly personnel issues. An example of a privacy issue could be the discussion of possible criminal activity within the HOA.
If open board meetings are required by statute or the homeowner association’s governing documents, an issue that does not rise to the level of needing to be addressed within an executive session should be addressed in the open meeting portion of the agenda. Executive sessions cannot be used to discuss unpopular topics that do not rise to the level of executive session. An example of this would be a discussion of increasing the HOA dues that would be unpopular with the membership. If there were no statutes or governing documents requiring open meetings, but the board of directors had been allowing open meetings, executive session still should not be used to discuss non-executive session level items.
Continued in Part Two
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Legal Disclaimer: This blog is presented solely for entertainment and educational purposes. The blog’s author is not an attorney, nor offering legal advice. The blog’s author and publisher are not offering or presenting this work as legal or any professional services advice or guidance. State statutes regarding HOAs can vary from one state to another so state statutes will need to be reviewed and may conflict with the material found within this blog. Every HOA is different, and the advice and strategies contained herein may not be suitable for every situation. The reader should always seek the services of a competent and experienced homeowner association attorney who specializes in homeowner association law.