Governor Brown Signs SB 563; Say Good-bye to Actions Without a Meeting

By David Swedelson, Condo lawyer and HOA attorney; Senior Partner SwedelsonGottlieb

Despite significant industry opposition, the Governor has signed into law amendments to the Davis Stirling Act and specifically Civil Code Section 1363.05, also known as the Common Interest Development Open Meeting Act. Here is the story of how this new law came to be:

As most of you know, the Act was amended with the addition of this code section requiring that board meetings at California community associations be open to members except for certain specified executive session meetings when those meetings should be kept confidential or emergency meetings when the required notice to owners is not possible.

Civil Code Section 1363.05, The Common Interest Development Open Meeting Act states:

“(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 … “(j) 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.

However, as most California community associations are corporations, the California Corporations Code applies and addresses this issue in part and states:

“7211. (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.”

This is where the term “Action Without A Meeting” comes from.

There has been a debate as to whether this section of the Corporations Code applies to California condominium, planned development and/or stock cooperative community associations, as it seems to conflict with the language, if not the spirit, of the Open Meeting Act. Well, the Legislature has ended that debate, and Actions Without A Meeting are no longer allowed.

The new amendments to the open meeting act eliminate actions without a meeting, clarify what and how emergency meetings can be conducted, and address notices of executive session meetings and meetings held via email, among other things. As if a volunteer board of directors’ job was not difficult enough, the California legislature’s abolishing actions without a meeting just made their jobs a bit more difficult by eliminating the ability of a board to take some actions without a meeting, as well as the additional requirement of a two day notice for executive session meetings and the new added requirement that if a board meets telephonically, at least one Board member must be at the meeting location so that the association’s members can attend and listen in person to the board’s deliberations and decisions.

To download this article which includes the important changes to the Open Meeting Act that will become effective as of January 1, 2012, follow this link.

David Swedelson can be reached by email for comments:

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