Codes of Conduct for Association Volunteers

By Emily A. Long, Esq.

 

Generally, board members of common interest developments are volunteers dedicating their time, skills and energy to serve the communities within which they live. Indeed, without these director volunteers, community associations would be unable to properly function. Similarly, committee members are volunteers who work on specific projects within a community. Often, committee work is a valuable first experience which can entice a member to become more involved and to eventually run for the board. However, there is a steep learning curve upon entering the world of association governance.

In order to help board and committee members understand the association’s expectations for service, codes of conduct can be particularly helpful.  Not only do codes of conduct codify association expectations, they can also serve to educate board and committee members and help minimize association liability.  Boards might therefore consider adopting codes of conduct that cover the following topics, among others:

  • Prohibiting the acceptance of any gift, gratuity, favor, entertainment, loan, or any other item of monetary value by a board or committee member from a person who is seeking to obtain a contractual or other business or financial relationship with the association.
  • Clarifying that board and committee members may not engage in any writing, publishing, or speech that defames any other member of the board, committee, employee, or resident of the community.
  • Establishing that board and committee members may not knowingly misrepresent facts to the residents for the sole purpose of advancing a personal cause or influencing the residents.
  • Prohibiting board members from discussing sensitive and confidential matters discussed in executive session, outside of executive session, or with anyone who is not on the board (with the exception of management and association counsel).
  • Prohibiting board or committee members from seeking to have a contract implemented that has not been duly approved by the board.
  • Prohibiting board or committee member interference with an association contractor performing work.
  • Clarifying that board and committee members may not harass, threaten, or attempt through any means to control, instill fear or discriminate against any member of the Association, management company, service provider, or community resident.
  • Preventing interference by board and committee members with the system of management established by the board as a whole and the management company.
  • Reminding board members that they must operate as a board and do not have any individual authority unless it is specifically granted to them in writing by the board or the Association’s governing documents.

Often, codes of conduct may be adopted as rules of procedure by way of approval by the board at an open session meeting, rather than by following the rulemaking procedures spelled out in Civil Code section 4360. However, we encourage you to first speak with your association’s legal counsel to review your association’s governing documents and discuss your community’s particular needs prior to adopting such rules.

Enforceability of these codes of conduct is another important issue to consider when preparing draft rules. It is recommended that any code of conduct specifically list the consequences for a violation of the code of conduct.  Reasonable penalties for violation might include: public or private censure by the board, removal of an officer title, and/or removal from committee service by the board.  It is unlikely that violation of a code of conduct may result in unilateral removal of a board member by the board, but speak with your association counsel on this issue.

To Pickleball or Not to Pickleball? That is the Question

By Rhonda R. Goldblatt, Esq.

Pickleball is one of America’s fastest-growing sports.[1] This surge has, in turn, generated professional tournaments, corporate sponsors, and professional players. Many homeowners, eager for a new amenity and a new hobby, have asked their community associations to create pickleball courts. Pickleball courts are relatively easy and cheap to create, especially if an association has an existing tennis court.[2] But while many boards may leap at the chance to buy in to the pickleball craze and give residents a new way to exercise, associations should be wary of potential issues that can accompany the new game. Below are a few issues to consider.

 

  1. Insurance. Pickleball related injuries are projected to cost Americans up to $500 million this year alone.[3] Given the potential for injuries related to the sport, associations should consider consulting with a qualified insurance expert to confirm they have adequate coverage in the event of any pickleball-related incidents.
  2. Noise. Pickleball can be noisy, and can in turn generate complaints from nearby residents. Therefore, associations may want to consider establishing rules limiting play to certain hours of the day, and consulting with qualified experts regarding sound-mitigating measures.
  3. Authority under the Governing Documents. Depending on the cost of the project, the exact changes to be made, and the terms of the association’s governing documents, creating a pickleball court may constitute a capital improvement requiring membership approval. Boards should confirm they have authority under their governing documents before altering the common area. When in doubt, consult with a qualified community association attorney.
  4. Consider a Trial Run. Associations can consider adopting a rule allowing pickleball play at existing facilities for a set amount of time with a sunset provision – for example, for thirty days – as a trial run, to see how pickleball fits into the community. The board can then review any member feedback received, and decide how to proceed.

 

 


 

[1] https://www.npr.org/2022/02/19/1081257674/americas-fastest-growing-sport-pickleball

[2] https://usapickleball.org/what-is-pickleball/court-diagram/do-it-yourself-guidelines/

[3] https://nbc-2.com/news/sports/2023/07/19/pickleball-injuries-costing-400m-nationally-the-alarming-toll-on-players-health/#:~:text=The%20most%20common%20types%20of,alongside%20the%20game’s%20unprecedented%20growth.

10 Things Community Associations Get Wrong!

By Pejman D. Kharrazian, Esq.

 

 

These are the top ten things I see landing community associations in hot water:

  1. Conditional Approvals for Architectural Applications

Don’t give conditional approval. Either approve or deny an owner’s architectural application. If there are “conditions” that would make an application approvable, deny the application, but welcome the owner to resubmit with the conditions addressed. Conditional approvals create ambiguity that can later cause problems for the association.

  1. Emailing Too Much

Cut back on emails? Sounds great!  There are (at least) two good reasons to cut down on emails:

First, under the Open Meetings Act (found in Sections 4900 et seq. of the Davis-Stirling Act), association business must generally be conducted at a duly noticed meeting. Emails amongst directors and management can easily run afoul of the Act and cross the line to an impermissible and illegal board meeting.

Second, most emails are discoverable in litigation. The less emails there are, the less there is to be discovered by a would-be plaintiff. In short, try to save most discussions for board meetings.

  1. Spilling the Beans

Many boards believe transparency is the touchstone of good governance. But that is not entirely true. The board, first and foremost, owes a duty to the association (the corporate entity). One of those duties is the duty of confidentiality. Certain information cannot and should not be shared with the membership. For example, confidential information discussed during executive session, attorney-client privileged information, information that compromises the privacy of owners (such as information related to assessments or member discipline), or information that can subject the association to liability should not be shared.

  1. Not Reading/Following Governing Documents

You mean I have to read all those governing documents? Yes! As a director, your decisions must be made with reasonable diligence, and that includes being familiar with the association’s governing documents (e.g., the CC&Rs, Bylaws, Condominium Plan, and Rules and Regulations). If the board cannot understand the provisions (yes, sometimes they can be confusing or poorly drafted) it should consult with legal counsel to help interpret.

  1. Overstepping Power/Authority

Powers and duties of the board can be found in the Davis-Stirling Act, other applicable laws, or the association’s governing documents. Boards are limited in the scope of their power and authority and need to ensure they stay within those boundaries. When in doubt, seek the advice of legal counsel, to determine whether the board has the authority to do what it is seeking to do.

  1. Inconsistent Enforcement

“Well, we let those owners do it because we like them” is not a good answer! The association’s governing documents need to be enforced uniformly and consistently. If the board gets heartburn when enforcing a rule or it is difficult to enforce, the underlying rule probably needs to be amended or repealed.

  1. Missing the Mark on Civil Rights or Fair Housing Issues

Discrimination and disability issues are major pitfalls for associations. Federal and state laws are quite onerous and technical in this area. Consult with legal counsel early and often on these issues, even just allegations, because a false step can be very costly for an association.

  1. Keeping Assessments Too Low

Often a director is heard saying:  “I was voted to the board to keep assessments low.” Keeping assessments low is important to the membership, for sure, but too often this notion is taken too far such that the association’s operating and reserve funds are not adequately funded. This can lead to deferred maintenance, large special assessments, and other problems.

  1. Responding to Online Posts

As a director, responding to online posts on social media is rarely, if ever, fruitful. A director or manager responding to social media posts can result in liability (defamation for example), be construed as speaking with the board’s authority, enflame the situation, or worse. So often, ignoring an online post or comment is the better move.

  1. Acting Without Legal Advice

The list of laws and cases that govern associations is large, and ever growing and evolving. Add in the provisions and requirements of your governing documents, and it quickly can become overwhelming, even for seasoned community managers. A bit of timely legal advice can make all the difference in staying on the right track and avoiding pitfalls and liabilities.

When the Votes Aren’t There, Don’t Despair

When the Votes Aren’t There, Don’t Despair

An Overview of The Court Petition to Amend Process for CC&Rs

 

By Pejman D. Kharrazian, Esq.

It can be challenging to amend your CC&Rs, especially when owner approval requirements are high. Some documents can require approval of up to 75% of all members before the CC&Rs can be amended. Absentee owners and voter apathy can further compound the challenge of getting enough owners to vote.

If your association has tried to amend your CC&Rs but has not been able to obtain the requisite approval, fret not, as there may be a way forward. Under California Civil Code section 4275, associations can file a petition with the state superior court to seek relief when the votes aren’t there. There are few statutory prerequisites to keep in mind:

  1. The association must have held a proper vote, meaning the vote was conducted in accordance with the association’s governing documents and applicable laws;

 

  1. At least a majority (over 50%) of all owners must have voted “yes” on the amendment; and

 

  1. The association must have made a “reasonably diligent effort” to solicit votes from owners and be able to make a showing to the court that it has.

If these threshold requirements are met, the association can move forward with petitioning the court to approve the amendment based on the affirmative votes actually received. The petition papers filed with the court require a large amount of information and supporting documents and should be prepared by the association’s legal counsel to ensure all statutory requirements are met. For example, the petition must demonstrate to the court’s satisfaction that the amendment is reasonable and that all owners (and any other parties entitled to notice under the CC&Rs) were provided sufficient notice of the court proceedings.

During the petition process, owners have an opportunity file opposition papers with the court. But granting the petition is ultimately within the judge’s discretion, and even in the face of owner opposition, judges are generally quite willing to grant such petitions if the statutory requirements are met.

The petition process can take anywhere from three to six months, or longer, depending on the court’s schedule.

PRACTICE TIP:  Since the petition to amend is essentially a lawsuit, the association should involve its legal counsel in the discussion as early as possible.

Assuming the court grants the petition, then the association can proceed with recording the CC&R amendment.

Finally, the court petition process can also be used for other governing documents, such as bylaws or articles of incorporations, under California Corporations Code Section 7515, and a request to amend CC&Rs and other governing documents can be filed together with the court in one streamlined petition.

Balcony Inspections

Balcony Inspections

(SB 326: The Balcony Bill)

Updated by: Kieran J. Purcell, Esq., CCAL

By now most of you are aware that in August, 2019, Governor Newsom signed Senate Bill No. 326 (“SB 326”) into law, adding Civil Code section 5551 to the Davis-Stirling Act.  This statute requires associations to perform inspections of balconies and other exterior elevated elements that the association has an obligation to maintain and/or repair by the end of 2024.

Below is an overview of the important points associations should be aware of as they prepare to conduct their first round of inspections under this new law.

Q&A

Which Associations are Impacted?

Associations with buildings having three or more multifamily dwellings.  Single family home communities are not affected.

 

What Needs to be Inspected?

Any “Exterior Elevated Elements” (“EEEs”) the association has a responsibility to repair or maintain.  Generally, this will be any load bearing components that extend beyond the exterior walls of the building to deliver structural loads to the building.  Primarily this includes balconies, decks, stairways, walkways, and railings that are supported by wood or wood-based products and are more than six feet above the ground.

 

Who Can Perform Inspections?

Inspections must be performed by a licensed structural engineer or architect.  Larger associations may also need to use a statistician, as the statute requires a statistically relevant sample size be inspected (95% confidence level, with a 5% margin of error).

 

When do Inspections Need to be Performed?

Inspections must be completed every nine years.  The first inspection must be completed by the end of 2024.  Buildings completing construction after this law went into effect, on January 1, 2020, will need to complete their first inspection within six years of issuance of a certificate of occupancy.

 

What Must the Inspection Look For?

Visual inspections must confirm EEEs are in a “generally safe condition” and “performing in accordance with applicable standards.”  If the inspector sees signs that the waterproofing system has been compromised, or that there is risk of damage to the load bearing components of the building, they are to use their best judgment to recommend further inspections.  If there are any threats to safety of residents, the inspector must notify the association immediately and governmental inspection agencies within 15 days of issuing their report.  The association must act immediately to prevent access to dangerous areas and take other appropriate preventive measures necessary to protect the safety of the residents.

 

What Reports Must be Generated from the Inspection? 

The inspector must issue a written report that includes:

  • Identification of the applicable building components subject to inspection;
  • Current physical condition of the components and whether there is a present threat

to health or safety of residents;

  • Expected future performance of the components and remaining useful life; and
  • Recommendations for any repairs.

The initial five-year window to complete the first inspection is intended to allow associations to coordinate their first balcony inspections to take place with an upcoming reserve study inspection.  The subsequent nine-year balcony inspection cycles will then align with every third reserve study inspection going forward.

Prior to moving forward with inspections, an association should also confirm there are no more stringent inspection requirements in its governing documents or required by local government or enforcement agencies, as Civil Code section 5551 allows for more stringent requirements to be adopted locally.

 

What Does an Association Do with the Report?

The inspector’s report must be stamped or signed, and included in the association’s reserve study.  The reports generated must be preserved in the association’s records for a period of at least two inspection cycles (or six years).

Spotlight on Elections

Spotlight on Elections

A Brief Summary of Two Recent California Court of Appeal Decisions

By Mary M. Howell Esq.,CCAL, & Pejman D. Kharrazian, Esq.

Two recent California cases, Takiguchi v. Venetian Condo. Maintenance Corp. and Lake Lindero HOA v. Barone, focus on the ever popular issue of achieving quorum.

Takiguchi v. Venetian Condo. Maintenance Corp.

In Takiguchi v. Venetian Condo. Maintenance Corp. (2023) 90 Cal.App.5th 880, a small group of owners held multiple units and had controlled the board with its nominees for many years.  In January 2021, as the association moved toward its annual meeting to elect directors, there were opposition candidates lined up to change the complexion of the board.  The existing board sent out statutorily-prescribed notices of meeting and ballots, and engaged a professional inspector of elections.

Then the fun began.  The governing documents prescribed a quorum of 51% of the voting power, with a provision for a lower quorum for an adjourned meeting should the association fail to meet quorum at the initial meeting.  The notice of meeting anticipated a failure to achieve quorum, and actually noticed a follow-up meeting to take advantage of the lower quorum requirement for an adjourned meeting. The notice stated that members could participate by mail in ballot, or by attending the meeting virtually, since COVID-19 restrictions were in effect. Ballots were duly mailed to homeowners by the inspector of elections, and the inspector of elections kept a log of which owners had returned their ballots.  Ostensibly, to save money and given a long history of failures to achieve quorum, the inspector did not attend the first meeting.

On the date of the first meeting, there was confusion as to whether quorum had been achieved; in determining that quorum had not been met, management relied strictly on the number of written ballots which had been received by the inspector, and did not include persons who attended online.

The failure to count for purposes of quorum those who had not actually cast a written ballot but who appeared via internet did not sit well with the opposition.  One homeowner took pictures of the participants who were only appearing virtually.  Despite some of those images being identified only by screen names, the opposition was able to persuade the court of the identities of those participating virtually, and counting those as well as the received ballots, it was clear quorum had been achieved at the first meeting.

To compound its problems, the holdover board next voted against holding the (already noticed) subsequent meeting with its lower quorum.

The opposition filed a suit pursuant to Corporations Code Section 7510, which allows a court to order a meeting be held if the corporation’s board had failed or refused to do so.  In granting relief to the owners, the court noted that, despite no minutes having been kept, there was sufficient evidence quorum had been achieved at the first meeting.  The court accepted the identification of owners who had not submitted a written ballot but participated virtually, and counted those participants toward the quorum. In fashioning its remedy, the court ordered that a new meeting be held for the purpose of counting the ballots which had been received at that first meeting.

A dissenting opinion questioned whether the statute actually supported this type of relief, or whether instead the court should have ordered a new meeting to be held.  While the dissent is well reasoned, the remedy prescribed by the court saved the association the not insignificant costs of conducting a second election.

Lake Lindero HOA v. Barone

The second case, Lake Lindero HOA v. Barone (2023) 89 Cal.App.5th 834, concerned a recall vote.  Defendant was a former director of the association, who had resigned his position in order to take a paid position as the chief executive officer of the association.

Homeowners sought to recall the entire board pursuant to a petition by 5% of the members.  Corporations Code Section 7511 requires an association, within 20 days of receipt of such a petition, to notice a member meeting to vote on the issue of recall.  The board failed to do so, so the petitioning members sent out their own notice of meeting, and duly conducted the meeting.  When this meeting failed to achieve quorum, as prescribed by the association’s bylaws, an adjourned meeting was convened by the same homeowners, resulting in a diminished quorum.  The recall was successful, and a new board elected.

Unfortunately, the recalled board refused to leave, contesting the right of the new board to govern, including instructing management to disregard instructions from the new board.  The new board and association then filed this suit, asking the court to declare the validity of the recall, and to validate the new board’s termination of Defendant’s contract.

Held: new board 1, old board 0.  The trial court’s decision was affirmed on appeal.

The old board made the following arguments: (1) the bylaws required a majority of owners to vote for removal, despite a statute that allowed removal by a majority of a quorum,

(2) the statutes do not permit a reduced quorum, even if the bylaws do, and (3) the Corporations Code only allows a court to determine the validity of “elections”, not “recalls.”  The court properly rejected all of these arguments.  First, the statute which discusses the percentage vote required for recall (§ 7222) specifically states that it will override any contrary language in bylaws.  Second, even though the recall statute doesn’t specifically authorize a lower quorum for adjourned meeting, another statute (§ 7512) specifically provides that bylaws may set a lower quorum for meetings.   As to the third point, the court found that Corporations Code Section 7616, which allows a court to validate election results, should be read broadly to permit a court to review recall votes as well.

Takeaways from the two cases:

  1. Achieving a quorum at annual meetings is always difficult. Keeping an accurate list of ballots cast is essential, and if a virtual meeting is going to play a part in the proceedings, protocols to establish the identity of participants is essential.
  2. Minutes need to be kept. While the focus is often on board meeting minutes, annual meeting minutes are critical in determining quorum issues, notice issues, motions of adjournment, and the like.
  3. Any communication between the board, management, and inspectors of election on quorum issues needs to be memorialized in a writing, such as an email.
  4. Statutes and bylaws need to be read together. In some cases, statutes override contrary language in the bylaws.  In other cases, statutes provide that bylaws may differ from the code.  A firm knowledge of both the relevant statutes and the association’s specific bylaws (and election rules, though neither case referred to them) is essential in any election, whether the annual election of directors or a recall vote.
  5. You can’t stop your analysis with the Davis-Stirling Act. Despite the increasingly complex election protections written into the Act, neither of these cases referenced the Davis-Stirling Act.  Both were decided entirely by reference to the Corporations Code.

Strapped for Cash?

A Short Tutorial on Borrowing from Reserves

By Karyn A. Larko

Even a well-run association can find itself short on cash occasionally due to unexpected operating expenses or an unexpected shortfall in assessment income.  Should this occur, a healthy reserve account can provide the solution – or at least the first step in the solution.

California Civil Code (“Civil Code”) section 5510(b) only permits a board to spend funds designated for reserves for maintaining, repairing, restoring and replacing major components the association is obligated to maintain, repair, restore or replace, for which the reserve fund was established; or litigation pertaining to the maintenance, repair, restoration and replacement of these components.  However, Civil Code section 5515 allows reserve funds to be temporarily used for other purposes provided they are timely repaid.

 

The Benefits to Borrowing from Reserves

Because reserve funds can generally be quickly accessed, they can be used to meet the association’s cash shortfall until the Board can implement a financial plan to pay for the expense, such as increasing regular assessments, levying a special assessment, identifying budgeted expenses that can be deferred, reduced or eliminated, or obtaining a loan.

 

The Requirements for Borrowing from Reserves

Civil Code section 5515 imposes the following requirements when borrowing from reserves:

  • The board must vote to borrow from reserves at a duly noticed open session board meeting. Further, the board must vote on a financial plan to replace these funds within one year.
  • The fact that the board intends to consider a transfer from reserves must be included on the agenda for this meeting. The agenda must also state the reason or reasons the transfer is needed, whether the board will consider the imposition of a special assessment to repay reserves, and some of the other repayment options to be considered.
  • The minutes for the board meeting must include the board’s vote to approve the temporary transfer of funds from the reserve account, the reason or reasons the transfer was necessary, and when and how the reserve account will be repaid.
  • The funds borrowed from reserves must be repaid within one (1) year of the date of the transfer. If more than one transfer is needed, the funds must be repaid within one (1) year of the initial transfer.

Notwithstanding the one (1) year repayment requirement imposed by the Civil Code, it is possible to extend the repayment period if the board determines it is in the best interests of the association to do so.  However, the same requirements for borrowing the funds apply.  In other words, the board must vote at a duly noticed open session board meeting to extend the repayment period and on the new plan for repayment.  The agenda for this meeting must clearly indicate that the Board will be considering a repayment extension and a new (or revised) plan for repayment, including a statement on whether a special assessment will be considered.  The meeting minutes must reflect the board’s vote to extend the repayment period, the reasons the extension is necessary, and when and how the funds will now be repaid.

 

PRACTICE TIPS:

Borrowing from reserves is not an alternative to careful and considered budgeting.  Nor is it an alternative to imposing the assessments needed to cover the association’s anticipated operating expenses.  This tool should be used judiciously and infrequently in order to maintain the integrity of the reserve account.

A board cannot borrow what the association doesn’t have.  A well-funded reserve account is important not just for fulfilling the association’s maintenance, repair and replacement responsibilities, but also for avoiding potential financial crisis in the event of an expected cash shortfall.

When meeting to vote on whether to borrow from reserves, don’t limit your options.  Identify and duly consider all the ways the reserve funds can potentially be repaid.  It may be the best option to combine methods of repayment.

The ability to extend the repayment period is not a license to use reserve funds to permanently fund purposes other than those authorized by the Civil Code.  Any extension in the repayment period should not exceed a year at the most.

 

Please reach out to us if you would like further guidance on the board’s responsibilities when it comes to funding and borrowing from reserves, or assistance in implementing repayment plan.

 

 

JEN SERRANO

Profile: Jen Serrano

JEN SERRANO

Jen Serrano

Senior Marketing Manager










Education

University of Puerto Rico, 2006
University of the Sacred Heart, 2011

Affiliations and Memberships

American Marketing Association
American Institute of Graphic Arts
Legal Marketing Association
Digital Marketing Association

Overview

Jen is an experienced full-stack marketing professional who is responsible for overseeing the Marketing Department at Epsten. She has a proven track record of leading integrated campaigns consisting of traditional and digital marketing ecosystems.

Prior to joining Epsten, Jen served as the Marketing Communications Manager at one of Virginia’s largest law firms, where she championed a multifaceted role. She successfully led integrated campaigns and provided creative leverage to the firm's brand voice. Jen’s contributions were recognized when she was awarded as an “Unsung Legal Heroes” Class of 2017 by Virginia Lawyers Weekly. This recognition is reserved for law firm employees who have consistently gone above and beyond the call of duty.

Additionally, she gained valuable experience while working in creative agencies, where she managed a diverse portfolio of brands across multiple industries. Jen played a significant role in the agencies’ award-winning campaigns, which achieved recognitions such as Suncoast Emmy Award, Sales & Marketing Executive Digital Awards, and Aster Awards, among others.

Jen is a member of the American Marketing Association, American Institute of Graphic Arts, Legal Marketing Association, and Digital Marketing Institute. In the past, Jen chaired the Diversity & Inclusion Committee for the Public Relations Society of America, Hampton Roads Chapter, and held a position as VP for the Naval Special Warfare Family Readiness Group (FRG).

Jen holds an M.A. in Public Relations from the University of the Sacred Heart, where she received the Pórtico Medal of Honor for academic excellence. She also earned a B.B.A. from the University of Puerto Rico.

    captcha

    Planning & Preparing for Effective Meetings

    Download pdf

    By Susan M. Hawks McClintic, Esq., CCAL

    Meetings are the primary mechanism for conducting business in common interest developments, so effective meetings are a key element in the health

    Ineffective meetings in common interest developments, especially when addressing sensitive topics, can easily devolve into shouting matches, threats, and even news coverage. Fortunately, these meetings are rare. More common is apathy or frustration with how business is conducted, which results in very few homeowners attending association meetings, even when important topics are discussed. Whether the concern is a potentially volatile meeting or disinterest, there are ways to conduct meetings that are productive and beneficial for the community.

    Community associations hold an annual membership meeting and board meetings at regular intervals throughout the year to conduct their business. Occasionally, special meetings of the members may be held to conduct a membership vote on matters other than the annual election of directors. California law and community association governing documents impose different requirements for board meetings and membership meetings, so it is important to be clear in the meeting notice and agenda about which type of meeting is being held.

    For both board meetings and membership meetings, there are procedures and processes dictated by law and the community association’s governing documents related to notices and how to conduct business; these will be discussed below for each type of meeting. The primary sources of information for conducting meetings are in the association’s bylaws, the Common Interest Development Act beginning at Civil Code § 4900 for board meetings and § 5000 for member meetings, California Corporations Code beginning at § 7211 for board meetings and § 7510 for member meetings for incorporated associations, and California Corporations Code at § 18330 for unincorporated associations.

    Beyond these requirements for meetings, there are some practices that can help make meetings more effective. Effective meetings can serve multiple purposes beyond just conducting business. They can create confidence in the board and a greater sense of community among the members. Ineffective meetings can lead to conflicts between the board members and the members of the community association.

    Board Meetings

    Board meetings are held for the purpose of conducting board business. The board president presides as the chairperson and is responsible for leading the board members through the agenda items and keeping the discussions focused on those agenda items. Board meetings are required to be open to attendance by the association members unless certain sensitive topics are to be discussed and statute allows for a closed-door conversation.

    The first step in keeping board meetings productive and effective is to establish rules of order and decorum. Some of the rules will be different depending on whether one is a board member or an association member attending the meeting. Board meetings are for the board to conduct board business. Association members who are not on the board should be limited to observing the meetings, except during the designated association member comment periods.

    While some of the rules should probably “go without saying,” they need to be said and should also be written down and read as a reminder to the attendees at the beginning of each meeting. The board may want to have copies of the rules readily available for board members and audience members. For an electronic meeting, the rules could be posted on a slide. These rules of decorum can include a reminder that members who are not on the board may only speak during the homeowner comment period unless specifically addressed by the board, that only one person may speak at a time, that all meeting attendees must refrain from interrupting speakers, and that speakers must stay on the topic of the agenda item being discussed. The chair of the meeting or another designated board member should enforce these rules so that all attendees maintain trust in the board and know that differing opinions may be presented and will be considered in a respectful, businesslike manner. Healthy associations are those that are open to new ideas and respectfully consider dissenting opinions.

    The second step is to set the meeting agenda in advance. Common interest development board meetings must have an agenda per California Civil Code § 4920. The agenda must be posted with the meeting notice at least four days in advance of the board meeting, except in an emergency. For a meeting held solely in executive session, only two days’ notice is required. These timelines for notice of the meeting may be longer if required by the association’s governing documents.

    The agenda can include time limits for each agenda item to keep the meeting moving, but flexibility should be allowed as long as the discussion remains productive and on topic. The board can adopt protocols for determining how a decision is made to extend a discussion beyond a designated time period. Options can include approval by a majority of a quorum of the board or approval by any two board members.

    The third step is for the chair of the meeting to keep the meeting on topic and maintain the rules of order or decorum. The president usually acts as the chair of the meetings. As a side note, most bylaws define the roles of the board officers and list their duties. The bylaws also usually provide for the delegation of some of these duties to other board members or association management, as well as making provisions for assigning these duties to another officer in the absence of the assigned officer. It is very common for many of the administerial tasks (such as taking meeting minutes, posting meeting notices and agendas, creating financial documents, and other similar tasks) to be delegated to management representatives, with oversight by the officers and directors.

    The chair of the meeting can keep the meeting moving forward by following the agenda and requiring that discussions remain focused on the agenda item being considered. A specific amount of time can be allotted to each agenda item and the time extended only by agreement of a majority of the directors’ present, to avoid “going in circles” on a topic without reaching a conclusion. If conversations tend to go on for longer than needed to adequately address agenda items, a motion can be made and approved by a majority of the board to discontinue discussion and call for a vote.

    The chair of the meeting should also maintain decorum by ensuring that only one person at a time is speaking, that all speakers stay on the topic under discussion, and that any time limit for a topic is enforced unless extended by the board.

    Board meetings are for conducting board business, and often owners/members not on the board will be limited to observing and making comments during one or more designated comment periods. At least one owner comment period is required by law at open session board meetings. The timing of this comment period can be designated by the board. The law does not address any time limits or set out any specific time during the meeting for owner comments.

    Most commonly the comment period is at the beginning of the meeting, but some associations choose to allow comments for each agenda item as it arises on the agenda, and other associations only allow comments at the end of the meeting. The disadvantage of only allowing members to comment at the end of the meeting is that it does not allow the members to comment in advance of the board’s consideration of agenda items during the meeting. This seems to defeat one of the primary purposes of the owner comment period – namely, owner input on an agenda item prior to the board considering the item. So, a comment period should be allowed before the board conducts its business.

    The board may set reasonable time limits for comments by individual owners as well as an overall time limit for owners’ comments. These time limits should be set by the board in advance of meetings and stated on the posted agenda for each meeting so members are informed of the time limits before the meeting. Typically, individual owner comments are limited to two to three minutes and the overall owner comment period to 15 minutes. These time limitations can vary depending on the size of the community and the number of owners who regularly attend board meetings.

    The board may decide to extend these time limits for a particular meeting or topic if they believe that additional time is needed to allow individual owners sufficient opportunity to comment. This most commonly occurs when the board is considering a large project or a significant change in policies or procedures.

    The board is not obligated to provide any response to owner comments, but it does promote community goodwill if easily answered questions are addressed and other comments, even negative ones, are acknowledged.

    Membership Meetings

    Membership meetings are not board meetings and are treated differently in the law than board meetings. Membership meetings are either annual meetings to hold the board election and conduct any other items of business set by the board in the notice and agenda for the meeting, or special meetings to address a specific topic.

    Special meetings of the members can be called by the board or by a petition signed by association members. For incorporated associations, Corporations Code § 7510(e) provides that special meetings “for any lawful purpose” may be called by the board, by the board president or chairperson, by other persons specified in the bylaws (which is rare), or by 5 percent or more of the members. Some association bylaws set a higher percentage of the members required to call a special meeting. Legal counsel for the association should be consulted upon receipt of any member petition to determine if the meeting is properly called and whether the association’s governing documents may set a higher percentage of the members to call a special meeting than the 5 percent set by § 7510(e) noted above. The minimum requirements for members to call a special meeting for unincorporated associations should be set forth in the governing documents.

    Membership meetings are held for the members to conduct business, primarily in the form of voting. The primary business conducted at most membership meetings is the election of directors at an annual membership meeting. Infrequently, special membership meetings are held for other types of votes, such as approval of capital improvement projects and document amendments.

    Membership meetings are typically conducted by the board. The opportunity for members to speak at membership meetings is different than the opportunity to speak at board meetings as discussed above. Civil Code § 5000 requires that the board permit any member to speak at any membership meeting and allows the board to set a “reasonable time limit for all members to speak.” Section 5000 specifically references the overall time for members to speak and does not mention any per-person limitation, although a per-person time limit may be set in the meeting procedures. The agenda should include a designated time for homeowners’ comments.

    Larger associations often ask members who wish to speak at a membership meeting to complete a form requesting to speak and identifying the agenda item or topic of the member’s comments, so the president or other chair of the meeting can call on those members who wish to speak in an orderly manner by topic. Smaller associations generally allow members to take turns speaking merely by raising their hand and being called on in turn by the chair of the meeting.

    Civil Code § 5000 also requires that all membership meetings be conducted using some form of parliamentary procedure to maintain order and allow opinions to be voiced respectfully. This procedure should not be overly complicated and difficult to follow. The board does not need to adopt a one-hundred-page tome on parliamentary procedure. There are simplified forms of parliamentary procedure available that do not require interpretation by a professional parliamentarian. The goal of the procedure is to maintain decorum and ensure fairness to all members wishing to speak. The board should not censor statements (unless the statements are discriminatory, offensive, or inappropriate) or show favoritism or preferential treatment toward any individual members.

    As with owner comments at board meetings, the board is not obligated to provide any response to owner comments, but it does promote community goodwill if easily answered questions are addressed and other comments, even negative ones, are acknowledged.

    Conclusion

    When association meetings are conducted in an orderly, calm manner, they are much more likely to be productive and create positive relationships in the community than if they are disorganized, unruly, and unproductive. Setting meeting procedures in advance and consistently enforcing the use of those procedures throughout the meeting will help set a positive tone for the interactions among the board members and association members. This positive tone can greatly benefit the community as a whole and lead to more productive, effective governance of the community.

     


    Download pdf

    * This article was originally published in the ECHO Journal  March – 2023 edition and was adapted from the original article, Planning & Preparing for Effective Meetings as authored by Susan M. Hawks McClintic, Esq., CCAL.

    Tips for Hiring a Professional

    Helpful Tips to Remember When Hiring A Professional

    Does your community need to hire a professional company to do maintenance, repair, or any other work to the common areas? Here are some helpful tips when looking into hiring a professional from a community association manager or board’s perspective.

    • Does This Professional Have A License?

    Associations should always hire a licensed professional versus an unlicensed professional. The Department of Consumer Affairs Contractors State License Board has more on why hiring a licensed contractor is important and how to check a contractor’s license status here.

    • Get Multiple Bids.

    The old saying “you get what you pay for” rings true here. Sometimes the cheapest bid is not always best for your association, even if the budget is low. While it may be tough and time consuming to get multiple bids, this effort upfront may help you on the back end if you need to fix the project or, worst case, litigate an issue. It is recommended that association’s make a reasonable effort to get at least 3 bids from different professionals in order to get an idea how much the project will cost on average.

    • Ask for References.

    If your community needs professional services, hopefully the company has done similar work before. Don’t hesitate to ask for recent references from projects and/or communities similar to yours so you can talk to other managers or board members about their experience with the company in both quality of the work and experience with the personnel.

    • Obtain A Written Contract.

    While oral contracts are sometimes enforceable, it is our recommendation to always obtain a written contract when contracting for services. It is very hard to prove the existence of an oral contract in a court of law and memories fade over time. Additionally, a bid or proposal, even when signed, doesn’t always contain the necessary terms and conditions a contract may require. After a written bid or proposal is obtained, make sure a signed, written contract is also obtained. The party drafting the contract typically writes the terms most favorable to them, so we highly recommend associations have their legal counsel review or draft any contracts. Attorney review may cost more money upfront, but can save you thousands if a claim is made later on. For more information on this topic, see Epsten’s Contracting Checklist here.

    • Set Expectations Up Front.

    As tedious and boring as reading a contract may be, it is imperative that both parties understand what is expected of them beforehand. If, when reading the scope of the project provided by your professional, there is a discrepancy or vague term you don’t understand, make sure to ask for clarification. Both sides need to be clear on what is expected of them before any work begins or money is exchanged. Unless your legal counsel has been involved in all negotiations or discussions regarding the project, the board and management may be in a far better position to review the scope of work and ensure it includes everything discussed, agreed upon and expected.  Your legal counsel may not be in a position to make any representations regarding the proposed scope of work if they were not included in those negotiations. As noted above, legal counsel should review or draft contracts but will likely need input from other professionals on the scope of the work.

    • Does This Professional Have Insurance?

    A written contract between an association and its professional should specify the necessary insurance that the professional is expected to maintain, and provide proof of upon request, while performing work on behalf of the association. Please also note that a certificate of insurance may not always be sufficient to ensure the association and management have been added as an additional insured once a contract has been executed. Make sure to ask your professional for a certificate of insurance and a blanket insured endorsement form before you accept any proposals. Consult with your association’s insurance professional about adequate insurance requirements or proof of insurance.  It is important that both parties are protected from any liability that may occur while workers are on your property and that the common areas are protected from damage, should any occur. Worker’s compensation is also important for professionals to have, should they need it. This tip includes all professionals, including, for example, architects.

    • Are Permits Needed for The Project?

    Depending on the governmental jurisdiction, permits may be required for your project. Consult with your licensed professional and make sure the contract is clear on who will be requesting and paying for permits, if permits are required. Inspections are typically needed to obtain permits, so make sure to factor in the time it will take to get your local permitting officials on scene to do any inspection.

    • Keep All Documents and Communication with Your Hired Professional.

    When dealing with a project, large or small, it is recommended that the association keep all documents, communications (emails, faxes, etc.) from the hired professional. While a fully executed written contract is an association’s best line of defense if a dispute arises later on, having documents to support any discussions and advice during the process of work can also be extremely beneficial. Sometimes disputes come up months or even years later. It is also recommended to take photos before, during, and after the project is completed as well.

    • Communication with Members is Key

    Once a project begins, be sure to update your members periodically. Delays, changes, and other deviations from the original plans and timelines tend to happen when projects begin. Members will appreciate any updates about how the project is progressing over time.