Providing an Effective Post-Hearing Notice of Discipline
This article is part two in the two-part series on holding effective disciplinary hearings. You noticed the hearing following the procedures in part one of this series, the board held the hearing, and “If the board imposes discipline on a member or imposes a monetary charge on the member for damage to common area and facilities,” you must now send a post-hearing notice of disciplinary action to ensure effective enforcement. (Civil Code section 5855(c).) Note, section 5585(c) does not require that the association send a post-hearing notice if the board imposes no disciplinary action, but it may nevertheless be a good idea for record-keeping purposes and as a simple courtesy to the member.
The post-hearing notice of disciplinary action (“Post-Hearing Notice” or “Notice”) includes fewer statutory requirements than the notice of hearing, but there are several important provisions the Notice should include to help ensure its enforceability.
Pursuant to Civil Code section 5855(c), a Post-Hearing Notice must be sent to the member within 15 days of the hearing date. The Notice must also notify the member of the board’s decision on imposing disciplinary action(s).
The Post-Hearing Notice should also include:
Date of the letter (the date should be the same as the date of mailing);
Record title owner’s correct name and mailing address;
We suggest pulling the deed for the property to confirm title.
Property address within the association;
The date and location the board held the hearing, along with the specific time the hearing convened;
The specific disciplinary action(s) to be imposed by the board after considering the evidence available to it (this is mandatory);
Examples: fines in the amount of x dollars, suspension recreational use privileges, removal of unauthorized architectural modifications by a date certain;
As with the notice of hearing, we suggest including the name of the document (e.g., Declaration, Rules) and the section(s) violated.
If applicable, a statement that fines may increase by x dollars or continue to be levied monthly without further hearings until the violation is remedied (this is only available if the governing documents provide for this and the violation is of an uninterrupted or continuing nature, e.g., an ongoing architectural violation);
If the hearing was for damage to common area or association property, state the amount of damages owed to the association and the due date in accordance with the governing documents; and
The effective date of any disciplinary action.
Although not required, some boards might find it helpful to also include:
A statement confirming who appeared and testified before the board (if no one appeared, state this);
A summary of the substance of the testimony of witnesses and the member(s) subject to the hearing; and
A list of the documents and other evidence the board reviewed in reaching its decision.
The Post-Hearing Notice must be delivered to the owner by either personal delivery or individual delivery pursuant to Civil Code section 4040. We suggest sending the Post-Hearing Notice by both first-class mail, postage prepaid and certified mail, return receipt requested. If the owner has requested the association send his or her notices to a secondary address, then the association must send the Notice by personal delivery or individual delivery to both addresses. (Civil Code sections 4040 and 5260).
The Notice may also include a proof of service. While proof of service is not required to enforce disciplinary measures, a sworn statement on mailing is evidence the notice was, in fact, sent. Any proof of service should be kept with the association’s copy of the Notice and not sent to the owner.
Following the procedures in our preceding notice of hearing article, along with the above post-hearing procedures, will help ensure effective and proper enforcement of the governing documents.
Civil Code sections 5300 and 5310 require common interest developments to distribute their annual budget reports and annual policy statements 30 to 90 days before the end of their fiscal year. For most community associations, that deadline is fast approaching.
So, let’s take this opportunity to consider some of the issues that community managers and boards of directors sometimes overlook when racing to complete their annual disclosures.
Start Early
To begin, in an ideal world, we would not race to complete the annual disclosures. It’s a good idea for management to provide the board with a draft budget for its consideration well in advance of the deadline. It’s particularly important for directors to review that draft budget in advance of the open board meeting where the budget will be discussed. That way, they will be prepared to approve the budget or propose amendments to the draft budget at the meeting. The budget meeting should be scheduled sufficiently in advance of the deadline so that the board can adjourn the meeting if necessary to resolve any issues that may arise during the budget meeting or in case the meeting needs to be adjourned for lack of quorum.
Don’t Forget Balcony Inspections
Civil Code section 5551 requires condominium communities to complete their first visual inspection of exterior elevated elements by January 1, 2025. That means, if your condominium community has not already completed this task, it must budget for it in this next fiscal year. Also, the law requires the report prepared by the architect or structural engineer to be incorporated into the association’s reserve study, which should be completed before the budget meeting so that the board can properly budget for reserve contributions.
Make Sure Your Disclosures Are Well-Reasoned
It’s also important for community managers and boards of directors to carefully review the disclosures required by Civil Code sections 5300(b)(3) through (6). Generally, the law requires an association to share its reserve funding plan, and statements as to whether the board has determined to defer maintenance, whether it anticipates any special assessments, and a description of the mechanisms by which the board plans to fund reserves. Occasionally, we find annual budget reports that proudly report no increase in regular assessments, but disclose severely underfunded reserves, no intention to defer maintenance, no plan for future special assessments, and no realistic explanation as to how future maintenance needs will be addressed. Of course, boards of directors have an obligation to levy regular and special assessments sufficient for their association to perform its obligations under the governing documents and Davis-Stirling Act. (See Civil Code section 5600(a).) It’s important for the annual budget report to provide evidence to the members that the board has complied with that obligation and explain the board’s reasoning.
Insurance Premiums Are Skyrocketing
Finally, it’s generally a good idea to plan for small budget increases every year due to inflation and increases in the cost of living. This year though, as you may have heard, many associations are facing significant increases in their insurance premiums. In some cases, insurance premiums have skyrocketed to multiple times an association’s previous premiums. We recommend reaching out to your association’s insurance broker at budget time to discuss anticipated increases in premiums. It’s better to find out the bad news now, so you can plan ahead, rather than wait until the policy is set to renew later in the fiscal year.
Conclusion
If you need help preparing your annual disclosures, contact your association’s legal counsel for assistance. But, do so well in advance of your deadline so that the board has sufficient time to address any issues that may arise. As they say, the early bird catches the worm! Following these recommendations will help avoid a mad scramble at the end of the fiscal year, and help set up your association for a productive new year.
There is nothing simple about managing a common interest development (“CIDs”). The statutory duties (e.g., annual disclosures) and annual administrative duties (e.g. insurance) would be burdensome for any corporation; most CIDs are ill-equipped to handle this task without having a structure in place. Unlike most large business organizations, rarely do CIDs have a corporate compliance officer to monitor compliance with the laws and administrative obligations. To assist CID management and boards of directors, boards and management should consider developing checklists to use as tools for fulfilling fiscal and administrative duties, thereby reducing legal exposures.
Recently, I was selected to participate as a contributing author for CAI’s ’Best Practices for Community Association Maintenance‘ (available on our website or through the CAI Research Foundation, at no cost). In this publication, the contributors developed checklists as a tool for maintenance and repair obligations. The development of that publication further confirmed my belief that checklists are essential for the proper operation of any CID. Checklists are nothing new. While not directly equivalent to what I am suggesting, airline pilot’s pre-flight and landing checklists have been proven to reduce airplane accidents, as well as pre and post-surgery checklists have proven to reduce surgical complications – like leaving surgical instruments in body cavities and infection prevention. (reference: The Checklist Manifesto).
Checklists should be tailored specifically for your CID to cover such things as fiscal responsibilities (e.g., timing of the budget, audit, reserve study, annual financial disclosures) and administrative responsibilities (e.g., insurance reviews and renewals, yearly contract reviews, property inspections, performance reviews, policies and procedure review, board education). Tasks on the checklist should be assigned to a specific person or position. Additionally, each checklist should include calendar dates for task deadlines, which will help not only the CID running efficiently, but help prevent financial losses.
If you do not know where to start regarding the types of checklists needed or what to include on those checklists, do not fret! We have done much of the work for you! Click here to access a compilation of checklists tailored for boards and managers with the most significant statutory duties imposed on community associations. Check the box and get it done!
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.
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.
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.
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.
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.
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.
These are the top ten things I see landing community associations in hot water:
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.
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.
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.
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.
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.
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.
Missing the Mark on Civil Rights or Fair Housing Issues
Discrimination and disability issues are majorpitfalls 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.
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.
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.
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.
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:
The association must have held a proper vote, meaning the vote was conducted in accordance with the association’s governing documents and applicable laws;
At least a majority (over 50%) of all owners must have voted “yes” on the amendment; and
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.
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).
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.
