Regular meetings are smart and vital
A president’s claim that board doesn’t need to meet every month as required in bylaws is incorrect.
Question: Our board president does not want to have monthly meetings even though our association bylaws specifically state that board meetings must occur every month. The president insists that when the state common interest development act was recodified in 2014 our CC&Rs and bylaws were overridden, making it no longer necessary for our board to meet monthly as required in the bylaws. Is this a correct interpretation of the law?
Also, I thought that Civil Code Section 5500 required the board to regularly review the statements we receive from financial institutions documenting our operating and reserve accounts. If the statements are received monthly, doesn’t that mean the board should meet monthly to conduct the review in open session? Answer: The president of your board is misinterpreting the law. And yes, the board must convene monthly meetings that are open to association owners.
Civil Code section 4205 establishes a hierarchy of document authority. In the event of any conflicts between governing documents and the law, it is true that the law prevails. However, there has to be an actual existing “conflict” between documents. The hierarchy discussion would only be triggered if your governing documents required a monthly meeting of the board and your president could point to a California law that prohibits monthly meetings or that mandates meetings at some other interval.
Civil Code section 5500 calls for a review of the association’s financial records on at least a quarterly basis. If, as you state, the board receives association financial records on a monthly basis, then there is no reason why it can’t meet more frequently, especially since the current bylaws require monthly meetings.
Moreover, California Code of Regulations, Title 10, Section 2792.20(a) requires boards to hold regular meetings as prescribed in bylaws. And your association’s bylaws specifically state that board meetings must occur every month.
Board meetings are important because they are the only way for owners to learn about the governance and maintenance of their property firsthand. It is also the only open forum where owners may speak directly to the board of directors — which is why board meetings are open for attendance by the association’s owners.
It is as common as it is smart for association boards to meet monthly. The logistics of operating a common interest development are complicated, and since the board cannot take action on any item of business outside of a legitimate board meeting (absent an emergency), regular meetings are the only way for board directors to fulfill their fiduciary obligations.
Less frequent meetings may prevent board directors from taking timely action in managing association business. Also, less information will be able to be distributed to the titleholders, and with that the board risks breeding distrust.
Any attempt by an individual director, such as your president, to interfere with the board holding regular meetings may subject that director to liability. It is a breach of the duty of care for any director to unilaterally make the decision to avoid holding meetings.
The president is always free to resign his or her position to let another owner gladly fulfill those duties to the association and its titleholders.
Zachary Levine, a partner at Wolk & Levine, a business and intellectual property law firm, co-wrote this column. Vanitzian is an arbitrator and mediator. Send questions to Donie Vanitzian, JD, P.O. Box 10490, Marina del Rey, CA 90295 or noexit@mindspring.com