BILL ANALYSIS �
SENATE TRANSPORTATION & HOUSING COMMITTEE BILL NO: sb 563
SENATOR MARK DESAULNIER, CHAIRMAN AUTHOR: T&H Com.
VERSION: 3/30/11
Analysis by: Mark Stivers FISCAL: no
Hearing date: April 5, 2011
SUBJECT:
Common interest developments: open meetings
DESCRIPTION:
This bill generally prohibits a common interest development
(CID) board from conducting meetings via e-mail, reduces the
notice period for CID board meetings held solely in executive
session, and provides standards for teleconference CID board
meetings.
ANALYSIS:
A common-interest development (CID) is a form of real estate in
which each homeowner has an exclusive interest in a unit or lot
and a shared or undivided interest in common area property.
Condominiums, planned unit developments, stock cooperatives,
community apartments, and many resident-owned mobilehome parks
all fall under the umbrella of common interest developments.
CIDs are governed by a homeowner's association. The
Davis-Stirling Common Interest Development Act within the Civil
Code provides the legal framework under which common interest
developments are established and operate.
One section of the Davis-Stirling Act is known as the CID Open
Meeting Act, which defines a meeting as "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." The act contains all of
the following requirements for CID meetings:
Unless the time and place of a meeting are fixed in the bylaws
or in the case of an emergency meeting, the association must
notify members at least four days in advance of the time and
place for a meeting, and the notice must include the agenda
for the meeting. An emergency meeting is allowed when
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"circumstances that could not have been reasonably foreseen
require immediate attention and possible action by the board,
and which of necessity make it impracticable to provide
notice."
The association must allow any member to attend meetings,
except when the board adjourns to executive session.
Executive sessions are allowed to consider litigation,
contracts, member discipline, personnel matters, and member
payment plans.
The association must allow members to speak at any meeting.
Many CID associations are incorporated and therefore also
governed by the Nonprofit Mutual Benefit Corporation Law within
the Corporations Code. This law contains a provision allowing
the boards of such corporations to take an action without a
meeting if all members of the board consent in writing to that
action.
This bill generally prohibits a common interest development
(CID) board from conducting meetings via e-mail, reduces the
notice period for CID board meetings held solely in executive
session, and provides standards for teleconference CID board
meetings. Specifically, the bill
Redefines "meeting" as follows:
To include any item of business that is within the
authority of the board, as opposed to items scheduled to
be heard by the board.
To include executive sessions for purposes of
notice.
To include a teleconference, provided that the
notice for a non-executive session meeting specifies at
least one physical location where members may attend and
where at least one board member will be present and
provided that all board members participating in the
meeting are able to hear one another and members of the
association speaking on matters before the board.
Explicitly provides that the board of directors shall not take
action on any item of business outside of a meeting and that a
majority of the board shall not hear, discuss, or deliberate
on any item of business outside of a meeting.
Precludes meetings via e-mail except to conduct an emergency
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meeting.
Requires associations to provide members with notice of the
time and place of all meetings, even if the meeting times and
places are fixed in the bylaws.
Reduces the required notice for meetings held solely in
executive session from four days to two.
Allows an association to provide notices of meetings via
e-mail with the consent of the member.
Clarifies that the board must allow a member of the
association to attend and speak at that portion of a
teleconference meeting that is open to members.
Provides that the agendas of executive sessions are
association records accessible to members.
COMMENTS:
1.Purpose of the bill . Committee staff has received a number of
complaints that CIDs have used the provisions of the
Corporations Code to conduct board meetings via e-mail and
without the participation of members of the association. In
order to ensure open meetings and the ability for members to
participate, this bill clarifies that no CID, whether
incorporated or unincorporated, may conduct meetings via
e-mail except in emergency situations. The bill also
clarifies that a CID board member may participate in a meeting
by telephone or video conference if at least one board member
is present at a physical location where members may attend and
speak and if the connection allows all participants in the
meeting to hear and be heard. This bill will improve the
transparency of CID board actions and ensure that members can
participate in decisions that affect their lives and property.
2.Emergency meetings . While this bill generally prohibits
e-mail meetings, it does allow for a board to conduct
emergency meetings via e-mail. There may be circumstances
such as a disaster that require immediate action, and if board
members are away from the development, e-mail may be one of
the few practical methods for the board to respond to the
emergency. Current law already exempts emergency meetings
from the meeting notice requirement.
3.Executive sessions . This bill clarifies that executive
sessions are indeed meetings subject to notice requirements
but also reduces from four days to two the notice period for
meetings held solely in executive session. Likewise, the bill
recognizes that a physical location and phone access for
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members are not necessary for a teleconference meeting held
solely in executive session.
POSITIONS: (Communicated to the Committee before noon on
Wednesday, March 30,
2011)
SUPPORT: California Alliance for Retired Americans
Californians Aware
Center for California Homeowner Association Law
One individual
OPPOSED: None received.