Homeowners’ associations in California must comply with numerous statutes concerning meeting notice requirements. Whether it’s an event that occurs regularly, such as a board or members’ meeting, or an unusual event, such as member discipline, HOAs and their boards are faced with an extensive array of mandatory notice procedures. Familiarity with these requirements is an important component in the efficient operation of any HOA, and in avoiding disputes and litigation resulting from a failure to properly give notice.
HOA notice requirements are embodied in several California statutes. The Davis-Stirling Common Interest Development Act (the “Davis-Stirling Act”) and the Corporations Code contain numerous HOA notice requirements. Unfortunately, these requirements are scattered across several sections in the Civil and Corporations Codes.
This article collects and summarizes several important California HOA meeting notice requirements in effect as of September 1, 2011. We advise our HOA association and management company clients to update their notice procedures annually, and to communicate to us any questions or concerns regarding interpretation and application of new notice requirements.
What Kinds of HOA Meetings Trigger Notice Requirements?
Most HOAs conduct annual meetings, board meetings, and member meetings on a regular basis. Less frequently, there are special membership and emergency board meetings, to address issues that arise between regularly scheduled meetings.
In addition, HOA boards go into executive session to consider legal, personnel and disciplinary issues, contracts with third parties, and member payment plans for delinquent assessments.
Under California law, each type of meeting has a specific notice requirement. These requirements are mandatory, and compliance is essential to protecting the HOA’s interests, and in avoiding costly litigation.
Meetings, meetings, meetings
It’s no secret that HOA members and boards meet on a regular basis. Isn’t that everyone’s favorite feature of HOA membership? Kidding aside, HOAs function as de facto local governments for millions of Californians, and HOA meetings are where important decisions affecting the community are made. There are several types of HOA meetings, and this article does not present an exhaustive list. Rather, it is intended as a guide to the most frequent meetings, and their specific notice requirements.
Regular members’ meetings
In most HOAs, members meet on a regular basis, usually monthly. Corporations Code § 7511(a) requires written notice “[w]henever members are required or permitted to take any action at a meeting . . .” The purpose of the meeting, not the frequency, determines whether written notice is required.
Written notice of meetings must be given by posting the notice in the common area, mail, electronically or personally. The Common Interest Development Open Meeting Act (the “Open Meeting Act”) mandates “posting the notice in a prominent place or places within the common area . . .” Civil Code § 1363.05(f). It is permissible to deliver notice by two or more methods, for example, posting and email.
Mailed notice must be sent to the member’s address in the HOA records, or at an address provided by the member for the purpose of notice. Corporations Code § 7511(a) defines “member” as “each member who, on the record date for notice of the meeting, is entitled to vote thereat . . .” Members must receive written notice of meetings not less than 10 days, nor more than 90 days, before the date of the meeting. If notice is mailed by other than first-class, registered, or certified mail, notice must be sent not less than 20 days before the meeting.
The Davis-Stirling Act defines “electronic delivery” to mean “email, facsimile, or other electronic means.” Civil Code § 1350.7(b)(3). Electronic delivery also includes posting on an electronic message board or network which the HOA has designated for those communications, together with a separate notice to the recipient of the posting. Corporations Code § 20.
Electronic delivery requires the recipient’s “unrevoked consent.” Corporations Code § 20 does not expressly require that the consent be written, but we recommend that written consent be obtained and kept on file. The consent may be obtained in an email from the notice recipient.
The Davis-Stirling Act lists categories of documents that may be delivered electronically, but does not list meeting notices as a document that may be emailed. See Civil Code §§ 1350.7(a), 1357.130 and 1357.140. Since members have the right to specify an address for notice delivery, does “address” include an email address?
In Worldmark v.Wyndham Resort Development Corp., the Court of Appeal ruled that the term “address” includes a member’s email address. 187 Cal.App.4th 1017, 1038 (2010). Although the case involved a timeshare development, not a HOA, if the Court’s definition applies to the Davis-Stirling Act, members have the right to email delivery of meeting notices, within the same timeframe required for mailed notice. In the absence of any contrary statutory or case law, we advise our clients to email meeting notices to any member who so requests, in addition to mailed or posted notice.
However delivered, the members’ meeting notice must state the place, date and time of the meeting. If members may participate in the meeting via electronic transmission or video screen communication, the notice must so advise. Corporations Code § 7511(a). Meeting notices must also contain an agenda for the meeting.
If the meeting involves an election, there are rules that govern the delivery of ballots. “Ballots and two preaddressed envelopes with instructions on how to return ballots shall be mailed by first-class mail or delivered by the association to every member not less than 30 days prior to the deadline for voting.” Civil Code § 1363.03(e). As most, if not all, HOA annual meetings coincide with some form of election, notice of the annual meeting must be delivered at least 30 days before the meeting, depending on the timing of the deadline for voting. If directors are to be elected, the notice must include the names of all those who are nominees when the notice is given. Corporations Code § 7511(a).
Annual meetings are subject to the same notice requirements as regular members’ meetings, and the same rules concerning elections.
Special members’ meetings
A special meeting may be scheduled for any lawful purpose by (1) the HOA board, chairman or president, or (2) a petition signed by at least 5% of the members. Corporations Code § 7510(e). The date of a special meeting is set by the board, and may not be less than 35 days, or more than 90 days from receipt of a petition. Corporations Code § 7511(c). The board has 20 days from receipt of the petition to set the date and give notice of the meeting. If the board does not do so, the petitioners may set the date and give notice that is not less than 10 days or more than 90 days before the date of the meeting. As with regular and annual meetings, at least 30 days of notice is required for special meetings involving an election. Civil Code § 1363.03(e).
Board of Directors meetings
Board meetings require much shorter notice than members’ meetings. Regular board meetings may be held without any notice if the time and place of the meetings are fixed by the bylaws or the board. Special board meetings require only four days of mailed advance notice to board and HOA members. Civil Code § 1363.05(f). Board members may be given 48 hours’ notice delivered personally or by telephone, including a voice messaging system or by electronic transmission. Corporations Code § 7211(a)(2). The bylaws may provide for a longer notice period.
As notice periods under the Davis-Stirling Act are calculated in calendar days, not business days, the four-day notice minimum can make mailed notice unreliable, depending on the date of the meeting. For example, if the four days preceding a board meeting include a major holiday or weekend, or both, mailed notice may not be delivered before the meeting.
For this reason, the Open Meeting Act requires delivery of notice of board meetings “by posting the notice in a prominent place or places within the common area and by mail to any owner who had requested notification of board meetings by mail, at the address requested by the owner.” Notice may also be given by delivery of the notice to each unit in the development, or by newsletter or similar means of communication. The notice must contain the agenda for the meeting. Civil Code § 1363.05(f).
The Open Meeting Act provides for executive sessions, so that HOA boards can address matters that involve privileged information, or matters of a private nature. Civil Code § 1363.05(b). Executive sessions do not qualify as meetings under the Open Meeting Act. If a board goes into executive session during an open meeting, the board will typically announce the topics that will be discussed. If an executive session is held between board meetings, the board may, but is not required, to give any notice, or to distribute an agenda. Civil Code § 1363.05(j).
Effective January 1, 2012, SB 563 will provide that executive sessions of the board are meetings, but they are not open meetings. The CID Open Meeting Act (the “Act”) will clarify that boards are not required to notice and hold an open meeting before going into executive session, but can meet solely for executive session purposes.
The Act will also prohibit discussing or deciding association business by email, and will require that business be discussed or conducted only in meetings. The sole exception will be for emergency meetings, in which decisions can be made by email with unanimous written board consent pursuant to Corporations Code § 7211(b). Executive sessions that are not emergency meetings will require two days’ prior posted notice.
An emergency meeting of the HOA board may be called if there are circumstances that could not have been reasonably foreseen that require immediate attention and possible action by the board. Emergency meetings may be called by the president or by any two directors other than the president. Civil Code § 1363.05(g).
As explained above, special board meetings usually require at least 48 hours notice to directors. There are two exceptions to this rule. If the articles or bylaws so authorize, a meeting may be held with less than 48 hours notice, provided that they do not “dispense with” notice of a special meeting. Corporations Code § 7211(a)(2).
Alternatively, board meeting notice may be waived if directors do any one of the following: (1) sign a written waiver or consent to hold the meeting without notice, either before or after the meeting, and the writing is filed or made a part of the minutes; (2) approve, in writing, the minutes of the meeting and the writing is filed or made a part of the minutes; or (3) attend the meeting without protesting the lack of notice. Corporations Code § 7211(a)(3).
Of necessity, boards may not be able to give even 48 hours notice to members prior to an emergency meeting. We advise our clients to give whatever notice is reasonably practicable under the circumstances, and post an agenda.
Before a board can meet to consider or impose discipline upon a member, it must notify the member in writing, by either personal delivery or first-class mail, at least 10 days prior to the meeting, unless the bylaws prescribe a longer period. The notice must contain: (1) the date, time, and place of the meeting; (2) the nature of the alleged violation for which the member may be disciplined; and (3) a statement that the member has a right to attend and may address the board at the meeting. Civil Code § 1363(h). Notably, there is no requirement that the HOA notify a tenant of a violation hearing. Notice must be given to the owner/member, who may notify the tenant at his discretion.
If after a hearing a member is to be expelled or suspended, the HOA must give a minimum of 15 days’ prior notice of the expulsion or suspension, and the reasons therefore. Corporations Code § 7341(c)(2). The notice must provide an opportunity for the member to be heard, orally or in writing, not less than five days before the effective date of the expulsion or suspension, by a person or body authorized to decide that the proposed discipline not take place. Corporations Code § 7341(c)(3). The notice of discipline may be given by any method reasonably calculated to provide actual notice, including first-class or registered mail sent to the member’s last known address. Corporations Code § 7341(d). The provisions of the disciplinary procedure must be set forth in the articles or bylaws, or copies of the provisions must be sent annually to all the members as required by the articles or bylaws. Corporations Code § 7341(c)(1).
Notice requirements may not be the most exciting aspect of HOA management, but they are among the most important. We advise our HOA and management company clients to establish a notice calendar, and update the calendar annually, to incorporate new statutory and case law requirements. Giving timely notice of all HOA events is worth the effort because it prevents complaints from and disputes with members, avoids costly litigation, and improves the efficiency of association management.