SB 563 and You: How Amendments to the CID Open Meeting Act Affect Board Activities


Published in the ECHO Journal, January 2012

Last fall Governor Jerry Brown signed SB 563 into law. The bill, authored by the Senate Transportation and Housing Committee, amends the Common Interest Development Open Meeting Act (Civil Code §1363.05) in ways that strengthen the Legislature’s public policy goals of open, transparent governance and decision-making in community associations. On January 1, 2012, SB 563 became effective and makes significant changes in the way association directors communicate with each other and make decisions.

Summary of SB 563

Effective January 1, 2012, SB 563 clarifies that executive sessions of the board are “meetings,” but they are simply not open meetings. This question has split attorneys up until now, because of the unusual way in which the Open Meeting Act defined a “meeting.” The new law removes the ambiguous language from the definition.

The new law overrides conflicting bylaw provisions that specify that certain boards must first notice, agendize and conduct an open meeting and then “adjourn” into executive session. Rather, boards will not be required to go through these elaborate steps if the only reason the board is meeting is for an executive session purpose. In exchange, the new law requires the board to post a notice and brief agenda for executive sessions, at least two days beforehand. No notice or agenda need be posted if the executive session is for an emergency meeting (i.e., where something unexpected has come up that could need board action, and notice isn’t practicable).

The new law provides that discussing, deliberating or deciding association business among a majority of directors may only be done in meetings. There are two types of meetings—in person or by conference call. This new limitation, therefore, does not include discussions or decision-making by a majority of directors by email. The sole exception will be for emergency meetings, as defined above. Emergency decisions can be made by email if the following apply:

  • The decision is with the unanimous consent of the board,
  • The decision is in writing (which an email is),
  • A record of the board’s unanimous consent is maintained with the board’s meeting minutes.

The new law will helpfully specify the process for how association boards can lawfully meet using conference telephone equipment. Since decisions made in an emergency conference call meeting need not be unanimous, it is important to understand the conference call protocols, as it seems likely most emergency meeting decisions will be made in that way.

Executive Sessions

As noted above, executive sessions will now clearly be meetings. The new definition of meetings will allow only two types (absent an emergency)—in person meetings and conference call meetings. Thus, unless an executive session subject is an emergency, executive sessions will require either calling a physical meeting or a conference call among all directors. If the subject of the executive session is an emergency and the other requirements above are met, then the board can also confer on an executive session subject by email.

Notice of executive sessions (unless for an emergency as defined) and a brief agenda must be posted in a prominent place in the common area at least two days in advance of it. Such notices will state that the board will be meeting in executive session at a specific date and time, and the agenda for the executive session will be stated in very general terms:

  • “To confer with counsel”;
  • “To discuss pending litigation”;
  • “To discuss member discipline”;
  • “To consider foreclosing an association lien”;
  • “To discuss contract formation”;
  • “To discuss personnel matters.”

Note that such notices/agendas will now be available to requesting members under the Access to Records statute, so copies of such notices/agendas should be retained in the association’s files. A good practice would be to mark on the copies the dates and times of posting.

As noted above, even if an association’s bylaws state that the board must first notice and conduct an open meeting before adjourning into executive session, the new law will supersede that restriction. Instead, boards will now be permitted to start and end an executive session without an open meeting (and its typical four days’ notice) if the board is solely meeting for an executive session purpose. If the board is meeting in executive session in person or by conference call, then the date, time, participants and general subject will need to be stated in the minutes of the board’s next open meeting. If the board is meeting by email in emergency circumstances in executive session, then the unanimous email consents should be gathered and maintained in the executive session minutes book as well as the fact, subject, etc. of the executive session by email being generally noted in the next open meeting minutes.

Emergency Meetings

Perhaps the largest impact of the new amendments is the focus they will bring on the emergency nature of board decision-making. For that reason, any time the board is planning to meet without notice (either four days or two days), its first question must be whether the circumstances permit an emergency meeting. Again, the subject must be unexpected, likely need board action, and notice is not practicable. All three of these tests must be met.

At the same time, it is widely understood that the tests are not difficult to achieve, leaving boards considerable flexibility in decision-making when need be. However, if a subject of discussion is an open meeting subject and four days’ notice can be given, it must. If a subject of discussion is for an executive session purpose and two days’ notice can be give, it must. These would not be emergency meetings and, for the open meeting subject at least, members are entitled to attend and to address the board in open forum.

Conference Calls

The now-specified protocol for open meetings by conference call is that at least one director must be at a designated location and, if members choose to attend, have speaker phone (or video) capability so that all directors can hear one another at the same time, attending members can hear as well, and all directors can hear members who wish to address the board in open forum.

Conference calls for executive session subjects are uncomplicated. All directors would be on a phone (or video) system that allows each to hear all others at the same time.

Emergency Meetings by Email

As noted above, the only time a majority of directors will be able to communicate substantive discussion and decisions by email is for emergency meeting purposes. Either the president or two officers of the association can call such a meeting. If the subject of the discussion and decision-making is properly an emergency, then the decision made by the board by email would be a resolution of the board documented in the board’s meeting minutes (either open meeting or executive session minutes book, depending on the subject). The email decision must be unanimous and the resolution must reflect that fact.

If the board is unable to agree, then the subject would be taken up in an in person emergency meeting or, more likely, in an emergency meeting by conference call. Unanimity is not required for such methods of meeting.

No More Everyday Email?

Because of the policy underpinning of openness and transparency in community associations, and because email is neither open nor transparent, all substantive communications among a majority of the board members is to be reserved to open meetings. If we take a page out of court opinions regarding the Ralph M. Brown Act (the sunshine law for local elected officials), then any communications among a majority of directors that suggests a “collective concurrence” is either sought or won by directors outside of a meeting would be a violation of the Open Meeting Act. The Legislature has said that those discussions and the debates that go with them belong in open session.

That is not to say that a manager could not transmit information to directors between meetings (such “informational exchanges” appear to be allowed), but any ensuing discussion among a majority of directors in advance of the next open meeting (or sharing by the manager with directors one or more other directors’ positions) would be problematic. That is also not to say that directors could not email their schedules for a meeting or submit agenda items (without opinions included). Discussions about items of association business, however, would be for noticed open meetings or executive sessions, not in between them (absent emergency circumstances).

Permitted by email, then, might be: “I can meet next Tuesday at 5 pm or Wednesday at 6 pm.” Or “The available colors for the new roofs are sable brown or midnight grey.” Not permitted by email, then, might be: “I can’t meet next Tuesday so we have to make it when I can because I intend to vote against the landscape contract.” Or “The only color I like is blue.”

The limitation on email may seem inefficient in today’s world, but if one thinks about it, the opposite might well be true. Limiting email exchanges will require greater organization and also free up directors who are otherwise heavily trapped by emails relaying every nuance of activity in their communities. Managers’ reports will be comprehensive, not piecemeal. The time for discussion, deliberation and decision can be easily recognized among directors as the night of the board meeting, not in seriatim email exchanges throughout the month or quarter. The new legislation also encourages proper delegation of responsibility to officers and managers, so that between-meeting reporting might be more the norm, not the exception. And in those communities where board scrutiny is highest, board decision-making on agendized items will demonstrate the commitment of the board to run business meetings professionally.

The clarity that the new amendments bring to long-debated subjects in the Open Meeting Act is, if not welcomed, then at least a relief. Question marks always come with risks of going one way or another. SB 563 will result in some changes by having answered many of the questions.

Sandra Bonato is a principal with the law firm of Berding & Weil LLP in Alamo, California. She is the Bay Area member of the four-person California State Bar sub-committee tapped to give comments to the CLRC on its efforts to restate Davis-Stirling and is a member and former chairperson of the ECHO Legislative committee. She is a frequent speaker at ECHO seminars.