Transparency is Key

On January 1, 2012, California Civil Code 1363.05 was revised to include electronic communications, such as email, as a qualifying format for holding a meeting. This meant that now a majority of Board members deliberating on association related business through email was prohibited. This is an extremely important evolution in legislature and dramatically changes the way most Board members are used to communicating with their managing agents in between meetings.

The important concept to remember here is the need for transparency and the preservation of the spirit of the Open Meeting Act. While it may seem to some of us that most homeowners are apathetic when it comes to attending association meetings, the membership must always have the right to witness most association deliberation, should they choose to become involved.

The requirements regarding the successful notification of meetings were also modified to enhance the preservation of transparency. Regular meetings of the Board have always been open to the association membership and require at least a four day advance notice and an agenda of the topics scheduled for discussion. Now, executive session meetings of the Board need to be noticed at least 2 days ahead of time and are to include a general description of the matters under deliberation. This allows for transparency to the membership, even though they are not allowed to attend.

In contrast to much of its usefulness, email is extremely dangerous for Boards and management companies due to the ease with which informality may manifest itself. Board members may use casual language or even criticize members or vendors in jest, but these transmissions or series of discussions become integral pieces of documented history for the association. Should the need for research surface, these emails may be publicized, even read aloud in court. Words and sentences are now literally dissected and what was once innocent humor now looks horribly insensitive and unprofessional.

More than that, when a Board member communicates to management or vice versa, this can immediately spark the need for a discussion. If other Board members are included, the conversation usually blows up into a series of opinions and explanations. Suddenly, the Board is deliberating in an environment not open to the rest of the membership. Owners' rights have become violated and the Board and management have now destroyed any trust the membership may have previously had in them.

If your Board meets quarterly, the use of email is probably considered a lifesaver in assisting the Board with conducting their regular business. It may seem harmless because both the Board and management are confident in their authority and their ethics. Association Board members are unpaid volunteers. They value the use of their time and email was a great way to not have to sacrifice a chunk of their day. From a homeowners' point of view, however, this "closed circuit" of communication provides way too much room for error.

Having to conduct business in an open meeting forces all of the Board members to become involved. It guarantees healthy deliberation that the membership is able to witness. It also guarantees that everyone involved is who they say they are, and that parliamentary procedures can be followed. If you have a good management company and/or an educated and dedicated Board, being in the same room together allows your decision making to be made openly, and with the confidence of following the law.

So what can we email? It is important to realize the difference between transmitting information and actual deliberation. A majority of directors may not use email to discuss association business, but they may discuss non-business items, such as setting the dates and times for meetings, distributing information for meetings, requesting that items be placed on the agenda or relaying project progress to the Board. It is important to include all Board members when exchanging information, even if it seems insignificant to some. As the Board is able to create distrust with its members by not being transparent, so can a management agent create distrust with the Board, should their communication not include all directors.

While calling and appropriately noticing a special meeting is always the best way to handle business that may come up in between meetings, depending on your dynamic, you may choose to delegate authority to either the President or your association manager for some of the usual decision making needs that surface between meetings.

Emergency needs are exempt to this requirement, however, Boards should be extremely careful when qualifying a topic as an emergency. Improper use or abuse of this classification may result in more distrust among the membership, but also may make the decisions challengeable in court.

Your Boards work extremely hard for you. Regulations like this although justified, increase the time involved for these volunteer directors and take away from time spent with their families, friends and careers. The next time you see your Board member walking down the sidewalk, stop to shake their hands and thank them for all that they give to your community. You don't have to attend a Board meeting to smile and say thanks, but we hope that you do.

And So It Begins

For many years, Steward Property Services, Inc. has hoped to offer a blog to its community association clients that would be a source of tips and guidance, and provide information about industry trends and legislative changes. The process has had a history of stops and starts as the reality of the day to day paper crunch that exists in this industry often crushed good intentions and forced them onto the back burner. However, technology has once again come to the rescue! Thanks to the forward thinking of our President, Mr. Jeff Farnsworth, the possibility of creating and maintaining a company blog has made better client communication a reality. 

Steward Property Services, Inc. also maintains an electronic company newsletter titled Community Lights. The newsletter includes information about Steward Property Service's news, industry news and legislative updates, community and volunteer highlights, and many other special features. Although aimed at our Board member clients, any homeowner may sign up and the newsletters will be archived on our Steward Property Services, Inc. website (www.stewardprop.com).