May an HOA Board Take Action Without A Meeting? – Article by BETH A GRIMM, P.L.C.
A reader asked me if an HOA Board can take action without a Board meeting, and then proceeded to tell me what other attorneys say about it. What I got was that attorneys apparently do not agree on the subject. (What a surprise?) My take on it is that Board’s sometimes need to take an action by unanimous consent. There are times when things come up that need attention right away, and the Board members may be scattered. Or one or two are out of town and can be reached by email but that’s it. Or the Board cannot meet or get a conference call going in time for a decision.
Now I realize that in California, the legislature ruled that meetings at associations should be open to members except for certain protected meetings such as executive sessions (because of the confidentiality) and emergency meetings (because of the inability to give proper notice to owners).
This is part of what the Davis Stirling Act says on the subject:Civil Code Section 1363.05 is known as the Common Interest Development Open Meeting Act. It says:
“(b) Any member of the association may attend meetings of the Board of the association, except when the board adjourns to executive session to consider litigation, matters relating to the formation of contracts with third parties, member discipline, personnel matters, or to meet with a member upon the member’s request, regarding the members payment of assessments as specified in Section 1367 or 1367.1. The Board shall meet in executive session, if requested by a member who may be subject to a fine, penalty, or other form of discipline, and the member shall be entitled to attend the executive session. … and … “(f) As used in this section, “meeting” includes any congregation of a majority of the members of the board at the same time and place to hear, discuss, or deliberate upon any item of business scheduled to be heard by the board, except those matters that may be discussed in executive session.
Ok, that’s the rule on meetings. However, that is not the end of the inquiry on board action. The California Corporations Code says (and most HOAs in California are corporations):
“7211. (a) Unless otherwise provided in the articles or in the bylaws, all of the following apply: …
(b) An action required or permitted to be taken by the board may be taken without a meeting, if all members of the board shall individually or collectively consent in writing to that action. The written consent or consents shall be filed with the minutes of the proceedings of the board. The action by written consent shall have the same force and effect as a unanimous vote of the directors. For purposes of this subdivision only, “all members of the board” does
not include an “interested director” as defined in Section 5233, insofar as it is made applicable pursuant to Section 7238.”
So you can see, the Corporations Code allows action by written unanimous consent. However, so as not to violate the spirit of 1363.05, it is best, I believe, to confine such action to items that are either of a emergency nature or exeutive session meeting where all HOA directors could not be at a meeting.
Action without a Meeting form: Click here
Example of an “Action without a Meeting form: Click here
Source of Article, click here.
California is working on changing how “Action without a meeting” is being handled
SB 563 (DeSaulnier) Would Cripple Boards’ Ability to Govern
Article by David C. Swedelson
We were advised that the California Senate Transportation & Housing Committee is prepared to vote on SB 563 (DeSaulnier) that deals with Community Association Board Meetings. We encourage you to contact the members of this Committee and tell them to vote “NO” on SB 563 which will, if made law, prohibit any actions and communications among community association board directors outside of noticed board meetings (excluding emergencies). Both the California Legislative Action Committee of Community Associations Institute (CLAC) and the Cailfornia Association of Community Managers are opposed to this bill in its current form.
Community associations are, for the most part, corporations and are required to comply with the sections of the California Corporations Code and Civil Code that already deal with the requirements for making decisions, taking actions in furtherance of their fiduciary duties, and reporting to the members.
Board members are volunteers, and things are always coming up that require their action. Day-to-day matters need to be acted upon as they arise, and holding off until the next board meeting (which may not be for months) may be impossible or impractical for a variety of reasons.
Nobody has presented any information regarding abuses that would warrant this proposed legislation, which will make it more difficult for boards to carry out their responsibilities.
Please follow this link for a notice from CLAC that provides information as to where to voice your objections to SB 563.
CLAC sets forth the following reasons to OPPOSE SB 563:
1. Prohibits directors from talking about ANY item outside of a noticed meeting.
2. Cripples a board’s ability to act on non-emergency but essential items between meetings.
3. Wipes out the ability for directors to agree by written consent between meetings, a long standing right for all other corporations.
4. Requires additional notices, costing HOAs more money.
5. Informs members about Executive Committee meetings that they are not allowed to
attend, causing severe member frustration.
6. Impossible to enforce; even casual conversation at social events could be intentionally unlawful.
7. Will lead to litigation; minor perceived violations will be seized upon.
8. How can directors even talk or email about convening the next meeting?
9. Informal outreach and “walk around” gatherings among members and board directors would be unlawful.