How Community Associations Can Minimize the Legal Risks Associated With Board Meeting Minutes. William W. Sleeth III, Esq. Elizabeth L. White, Esq.
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1 How Community Associations Can Minimize the Legal Risks Associated With Board Meeting Minutes William W. Sleeth III, Esq. Elizabeth L. White, Esq. October 7, 2009
2 Today s attorneys and some notes... Elizabeth L. White Williamsburg William W. Sleeth, III Williamsburg Welcome. With the high number of attendees, please note all lines have been muted for the event. Q&A can be posted at the right of your screen, but any questions (time permitting) will be addressed at the end of the event. If using Q&A please send to both the host and the presenter. You can send direct questions (including requests for a copy of the slides) to seminars@leclairryan.com with Community Associations Webinar in the subject line after the event.
3 Community Associations Webinar Series Look for invitation on Hot Topics in Covenant Enforcement Cases Wednesday, November 18, :00-1:00 pm (or register at leclairryanevents.webex.com)
4 Overview of Board Meeting Minutes Many areas of the law are rather intuitive Many of the best practices related to board meeting minutes, however, are counterintuitive
5 Which Is More Frustrating? (A) Drafting proper board meeting minutes OR (B) Trying to be a Redskins Fan?
6 Context Regular meetings of the board Special meetings of the board Closed executive sessions of the board Other contexts: Committee meetings The Association s annual membership meeting
7 Problems with Narrative Minutes Narrative Minutes defined Practical Problems Cumbersome to review Needlessly increase the amount of documents that need to be maintained
8 Problems with Narrative Minutes Legal Risks Discoverable in litigation (almost always requested prior to litigation) Extra information just increases the chances of a legal problems Phrasing Problems Defamation and privacy issues Breach of fiduciary duty problems Conflict of interest issues Failure of the board to act Statements taken out of context years later
9 Purpose of Minutes To show the action that the board took on a matter
10 Proper Minutes Brief and Precise Say as little as possible Proper minutes will require more thought and planning than simple dictation Minutes are meant to record what was done at the meeting, rather than what was said
11 Specifics Not to Include The substance of a discussion Details about who said what A record of how each director voted Needlessly politicizes board matters Exception: a request to note a dissent in the minutes
12 Context Regular meetings of the board Special meetings of the board Closed executive sessions of the board Other contexts: Committee meetings The Association s annual membership meeting
13 Executive Session Even more risks for minutes of executive session than of the regular meeting Sensitive nature of topics discussed in executive session
14 Executive Session: When Permitted Condominium Act: Property Owners Association Act:
15 Executive Session: When Permitted Personnel matters Consult with legal counsel Discuss and consider contracts, pending or probable litigation, and matters involving violations of the declaration or rules and regulations Discuss and consider the personal liability of members to the association
16 Executive Session: Minute Requirements The motion shall state specifically the purpose for the executive session. Reference to the motion and the stated purpose for the executive session shall be included in the minutes. Virginia POAA Minutes should also reflect that someone stated that the board came out of executive session, reconvened in open session, and that nothing was discussed other than matters within the stated purpose of the executive session
17 Executive Session: Minute Requirements The Condominium and POA Acts do not require anything else to be placed in the minutes regarding the executive session Simple rule: don t do more than the acts require!
18 Sample Executive Session Resolution The Board must vote in an open meeting to assemble in executive session. The motion shall state specifically the purpose for the executive session. Reference to the motion and stated purpose for the executive session shall be included in the minutes. Only the following matters may be discussed and considered in executive session: Personnel Matters. Consult with legal counsel. Contracts. Pending or probable litigation. Matters involving violations of the declaration or rules and regulations adopted pursuant thereto for which a member, his family members, tenants, guests or other invitees are responsible. The personal liability of members of the association.
19 Sample Executive Session Resolution (cont.) The consideration of matters during executive session shall be restricted to only those purposes specifically authorized pursuant to (C) of the Property Owners Association Act and stated in the motion. No contract, motion or other action adopted, passed or agreed to in executive session shall become effective unless the Board of Directors, following the executive session, reconvenes in open meeting and takes a vote on such contract, motion or other action which shall have its substance identified in the open meeting.
20 Practice Pointer Segregate the executive session materials from the board package provided for the general meeting
21 Standard Format for Board Meeting Minutes Smart for Associations to adopt a standard format Format should apply to committees as well, and board should only accept minutes from committees in that format Committee minutes can serve the dual purpose of reporting a committee s actions and serving as its report to the board Ensure that standard format complies with governing documents
22 Walk-Through of Suggested Minutes for Board Meeting (1) Call to order: The meeting of the Board of Directors of Association (the Association ) was held at, on the day of, 20_. The following Directors were present and by their presence and participation in the meeting, waived notice of the meeting: [names of others] was/were also present. Others include, e.g., manager, attorney, CPA Do not include names of owners there just for the owners forum The meeting was called to order at am / pm.
23 Walk-Through of Suggested Minutes for Board Meeting (2) Resolution Approving Previous Meeting Minutes (3) Reports: Reports were given by:. Do note vote to approve reports (4) Owner Forum: A number of members addressed the Board during Owner Forum. do not include members names and do not summarize their statements
24 Walk-Through of Suggested Minutes for Board Meeting (5) Old Business (6) New Business: Upon motion duly made and seconded, the following resolution was approved by a majority or more of the Directors: RESOLVED,. (7) Adjournment: There being no further business to come before the Board, the meeting was adjourned at am / pm. Respectfully submitted,, Recording Secretary
25 Practice Pointer Stamp draft on the minutes until they are approved by the board
26 Horror Stories & Lessons Learned Disclosing Legal Advice Attorney gave board highly sensitive legal advice in executive session Association published minutes in its newsletter The minutes included a summary of the legal advice given Furthermore, the summary was an inaccurate restatement of the legal advice
27 Horror Stories & Lessons Learned Fair Housing Issues several senior residents of the Association complained to the board about children using the Association pool Those comments were placed in the minutes Fair Housing Act issues (discrimination based upon familial status)
28 Q & A
29 A Reminder: Community Associations Webinar Series Look for invitation on Hot Topics in Covenant Enforcement Cases Wednesday, November 18, :00-1:00 pm (or register at leclairryanevents.webex.com)
30 NEW!!! Community Association Blog & Feature Articles The LeClairRyan Community Association Team is starting an Association-law blog that will be up and running on December 1 st Look for announcement in November View our website for details in November HOA Leader articles featuring interview with Liz White
31 Thank you for attending Questions or for a copy of the audio presentation and slides send to seminars@leclairryan.com with Community Associations Webinar in the subject line Or Visit our personal webpage's on the LeClairRyan website Search Will Sleeth and/or Liz White and click on Events
32 Usage This webinar slide show provides general information and is not legal advice and should not be used or taken as legal advice for specific situations. You should consult legal counsel before taking any action or making any decisions concerning the matters in this show. This communication does not create an attorney-client relationship between LeClairRyan, A Professional Corporation, and the recipient. Copyright 2009 LeClairRyan, A Professional Corporation. All rights reserved.
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