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Meetings of the board are no place for secrecy

October 26, 2003|Stephen Glassman and Donie Vanitzian | Special to The Times

Question: I sit on a board that conducts all its business behind closed doors, and I'm too chicken to speak up against it.

We enter into contracts based on nepotism and vendor incentives to board members. We even hired a vendor who has been fired from other associations and who sues individual homeowners.

Owners cannot sit in on hiring discussions and are barred from knowing what contracts are entered into because voting takes place in executive session.

The association attorney sent the board a letter advising us to hold meetings in executive sessions and shut owners out. It said: "The Civil Code clearly states that members may attend board meetings except when the board adjourns to executive session. The California State Constitution provides an inalienable right of privacy, which applies to homeowner association vendors. After a board openly solicits bids from vendors such as management companies, roofers, plumbers and the like, it is appropriate to discuss the specific vendor's proposed contract price, vendor selection debates, negotiation and contract approval in a closed executive session. These are protected discussions and if held publicly might be disparaging to the vendor."

The letter continued: "The board did not violate the Open Meeting Act by not discussing and voting on the contracts in open session. Executive session meeting attendance is limited only to association board members, management company personnel and agents, designated committee members and volunteers appointed at the board's discretion."

Why do vendors have more rights than the owners who pay the bills? Why is it that a management company, volunteers and committee members can attend but a titleholder can't? Is the attorney's advice wrong?

Answer: The constitutional provision is not for a vendor to invoke; it belongs to the association board. When applied to a homeowners association, the "inalienable right to privacy" refers to the board members' right to be able to discuss matters among themselves, including comparing one vendor with another. It does not mean the vendor attends the session.

Vendors have no right of privacy in discussions or negotiations with the board. A board's contract decisions must be voted on at an open meeting, and boards cannot adjourn to executive session as a means of evading the Open Meetings Act.

Courts reason that association boards have broad powers, and their actions affect a number of individuals. The Legislature mandated that boards hold open meetings. In Damon vs. Ocean Hills (2000), the court recognized that California's Davis-Stirling Act parallels the Brown Act. Both contain sunshine provisions "construed liberally in favor of openness."

In Attorney General Opinion Letters (2002), it is established that open meeting and records disclosure "requirements" apply to private, nonprofit corporations and to meetings of governing boards of such corporations, and that even "evaluation of performance, discipline, dismissal, and employee salaries" must be discussed in the open. Together, these laws mandate open governance meetings -- with notice, agenda and the requirements of minutes -- while strictly limiting closed executive sessions.

The privacy provision was added to California's Constitution in 1972. In 1975, California's Supreme Court stated that the privacy provision is directed at four principal areas of conduct: government snooping and secret gathering of personal information; collection and retention of unnecessary personal information; the improper use of properly obtained information for a specific purpose; and lack of a reasonable check on the accuracy of existing records.

As vendors are competing in an open marketplace for the same work as others in their field, they should expect competition and have no "right" to deal privately with the board.

Once volunteers, management company personnel, committee members and the like are allowed into executive sessions, any privacy right, if one existed at all, is waived. It is inappropriate to hold vendor interviews and voting behind closed doors.

E-mail your queries to NoExit@mindspring.com.

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