Association Board Meetings – Can They Be Confidential?

| Apr 16, 2012 | Homeowners' Associations |

ASSOCIATION BOARD MEETINGS – CAN THEY BE CONFIDENTIAL?

Rules and procedures relating Association Board meetings are very different than those applicable to general membership meetings.  A number issues can arise in this regard that I will address in this Memo.

I.          Single Family Residence (Non-Condominium) Associations

 

A.        The Law

RCW 64.38.035 (applicable to non-condo Associations only) provides as follows with respect to Board meetings:

RCW 64.38.035  Association meetings — Notice — Board of
directors.
(2) Except as provided in this subsection, all meetings of the board of
directors shall be open for observation by all owners of record and their
authorized agents.  The board of directors shall keep minutes of all
actions taken by the board, which shall be available to all owners.
Upon the affirmative vote in open meeting to assemble in closed session, the
board of directors may convene in closed executive session to consider
personnel matters; consult with legal counsel or consider communications
with legal counsel; and discuss likely or pending litigation, matters
involving possible violations of the governing documents of the
association, and matters involving the possible liability of an owner to
the association.  The motion shall state specifically the purpose for the
closed session.  Reference to the motion and the stated purpose for the
closed session shall be included in the minutes.
The board of directors shall restrict the consideration of matters during the closed portions
of meetings only to those purposes specifically exempted and stated in the
motion.  No motion, or other action adopted, passed, or agreed to in
closed session may become effective unless the board of directors,
following the closed session, reconvenes in open meeting and votes in the
open meeting on such motion, or other action which is reasonably
identified. The requirements of this subsection shall not require the
disclosure of information in violation of law or which is otherwise
exempt from disclosure.

B.        Board Meeting Principles. While specific community CCRs or Association Articles of Incorporation or Bylaw provisions could impose requirements, the following principles and procedures must be kept in mind based upon the above statute:

a.         The Board cannot prohibit non-Board member owners from attending Board meetings and observing.

b.         Non-Board members who attend meetings do not have the right to speak or participate in the Board meeting, although the Board would certainly have discretion to permit the same if the Board wishes.

c.         The Board must, per statute, only keep minutes of actions taken or decisions made by the Board at Board meetings.  No other minutes are required by statute and thus are optional.

d.         If the Board needs to discuss any of the matters in italics in the statute above and wishes to do so in private (because non-Board members are present), it needs to follow the correct procedure.  Your attorney should be able to assist you with this by recommending the proper steps to follow to address the issue(s) you are facing.

II.        Condominium Associations

 

A.        Statutory Requirements for Condominium Associations. While the condominium statutes do touch on Board-related matters (See, e.g., RCW 64.34.308, 64.34.332 & 64.34.336), they do not provide specific guidance or establish procedural requirements for the Board meetings themselves (as opposed to general membership meetings).

B.        Condominium Association Board Meetings. Thus, the Association Articles of Incorporation and Bylaws together with the condominium CCRs must be carefully reviewed to determine what they specifically require, if anything, with respect to Board meeting procedures, who can attend, required notice, etc.  Sometimes Association Bylaws adopt an edition of Robert’s Rules of Order as the guide to the conduct of meetings in which case its provisions should wisely be consulted as to particular issues.

In addition, in Washington State certain general corporation and/or non-profit corporation statutes (RCW 23B, RCW 24.03 and RCW 24.06) will apply to condominium associations to provide some basic guidance.  Still, these statutes do not provide detailed rules or requirements for the conduct of Association Board meetings.

III. Unique Association Board Issues

Each Association and each Association Board will at some point face unique issues and challenges arising from conflicts within the community, uncertainty in interpreting covenants, enforcement of covenants and rules and the peculiar relational dynamics on the Board or in the community.

It is always prudent to seek legal advice when thorny issues arise regarding the Association Board’s legal responsibilities and the procedures the Board must follow.