Tag Archives: politics

Are Director Speeches and Consent Calendars OK for our HOA?

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By Kelly G. Richardson, Esq. CCAL, HOA Homefront Column

Mr. Richardson: I really enjoy your HOA Homefront column. Here’s a question: Is it appropriate for board members to use homeowner time to make speeches? We have a board member who likes to do that — often disparaging owners who have different opinions from hers. Thank you, A.M., San Diego

Dear A.M.: Open forum is not the time for the board members to talk, but is their time to LISTEN. They should be noting any questions or action items that need to be answered or directed to management or a committee. The Open Meeting Act prohibits directors from discussing (or orating) on matters not disclosed on the agenda, per Civil Code Section 4930(a). However, subparts (b) and (c) of Section 4930 allow directors to answer questions or request matters be referred to management, staff, or a committee, which should happen AFTER open forum ends. Board members who abuse open forum by interrupting members cannot fairly insist that homeowners in the audience not interrupt board deliberations. Finally, it’s bad form to use one’s board seat as a platform to bully or criticize other members. Sounds like someone should gently rein this person in a bit. Best, Kelly

Dear Kelly: In an attempt to make board meetings brief, they have taken to voting the “consent calendar” as one agenda item, without any prior members’ knowledge, discussion or even speaking the items on it. This month these include: approve the minutes; acknowledgement that board members have reviewed the financials; treasurer’s report; and manager’s report. These reports are provided to the board by the treasurer and manager prior to the meeting. They are then adopted by the Board at the meeting always without discussion or disclosure of the contents. The reports are then attached as separate PDFs to the minutes of the meeting which are provided to the members a few days after the meeting. Should not these reports be seen by the members before the Board votes on them? How can this square with the open meeting rules or intent? R.S., Solana Beach

Dear R.S.: Consent calendars are a powerful tool to dispose of items not expected to require any discussion – such as the items you list- in one quick vote without deliberation. The consent calendar items still must be listed on the posted agenda, and any director can without explanation ask for an item to be removed and handled as a separate motion. Since consent calendar items are not discussed, it is another reason to conduct open forum at the beginning of the meeting. However, reports the board receives in their “board packets” are not normally shared with the rest of the HOA unless those reports are accepted and added to the minutes. Sometimes the board packet has confidential information such as multiple bid proposals, or incident reports, or delinquency lists, which should not be shared with the community at large.

Consent calendars are valuable because they preserve time and energy for the items which might be controversial and need board focus. Even the smallest HOAs would benefit from their use. One caution – don’t overuse consent calendars as a technique to avoid discussing matters which are not truly routine or non-controversial, because that can quickly destroy a board’s credibility. Nothing is more important than the HOA’s trust in their board.

Sincerely, Kelly

The Importance of How Boards Decide Actions

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By Kelly G. Richardson, Esq., CCAL, HOA Homefront Column 

In the HOA world, corporate formalities can often seem to discourage and frustrate quick decisive action. However, there are important reasons the process must be followed, and the corporate process is a critically important legal protection for volunteers. 

Volunteer immunity from Civil Code 5800(a)(1) is limited to acts “performed within the scope” of the officer/director’s association duties. This echoes similar language commonly found in directors and officers insurance policies. Volunteers who skip the HOA approval process and act without board authority may be outside of the protections of both the statute and the insurance. This could be a disaster for volunteers who “take the bull by the horns” instead of waiting for their board colleagues to decide upon a particular action. 

Corporations are legal fictions recognized by law as “persons” with rights to own property, sue, and be sued. However, as legal fictions, corporations only act through boards, and board actions are proven through written minutes. Minutes prove that a legal commitment is the corporation’s.  Without minutes documenting corporate authority, a volunteer may not be able to prove a vendor commitment was the HOA’s and not theirs personally. While that scenario would be a nightmare for the volunteer, it can easily be avoided by waiting to sign contracts until the board approves them. Managers and volunteers should insist that board authority to act is confirmed in writing and then soon as possible is recorded in minutes.

Corporate powers come from statutes and governing documents, and actions outside that corporate authority are called “Ultra Vires,” a Latin term meaning “outside the powers.”  In business corporations, officers often are the primary deciders, but in HOAs boards are the primary decision-maker. If an officer acts outside those powers and without board approval, it is not corporate action, and the officer is exposed to risk.

Sometimes urgency requires an immediate decision to be made — such as calling an emergency contractor, for example. Boards may take emergency actions via email, under Civil Code Section 4910(b)(2). If that isn’t possible, it’s critical that directors acting for the corporation in emergencies as soon as possible obtains formal corporate approval, called “ratification” of the action taken, which ratification must be documented in minutes. 

California’s Open Meeting Act (Civil Code §4900-4955) contains many mandatory governance procedures — in addition to those in the governing documents. That law requires advance notice of board meetings, bans actions outside of board meetings, limits use of executive sessions, and requires prompt availability of draft minutes.

Boards violating the Open Meeting Act often invoke explanations of efficiency or convenience. However, boards violating the legally required corporate process by deliberating outside of open meetings may expose those decisions to legal challenge as outside the corporate authority. 

Sometimes directors step out ahead of the board in their zeal to “get things done,” acting without documented board authority. However, what if the board later disavows the director’s action, leaving the director personally exposed to that contract liability? What if it turns out that the action turns out to be a mistake and wasn’t really the best for the HOA? The board might refuse to ratify the action, leaving the director personally exposed.

Board motions, votes, and recorded minutes prove that the corporation is liable, not you. Embrace them- they protect you.

Are Director Speeches and Consent Calendars OK for our HOA?

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By Kelly G. Richardson, Esq. CCAL, HOA Homefront Column

Mr. Richardson: I really enjoy your HOA Homefront column. Here’s a question: Is it appropriate for board members to use homeowner time to make speeches? We have a board member who likes to do that — often disparaging owners who have different opinions from hers. Thank you, A.M., San Diego

Dear A.M.: Open forum is not the time for the board members to talk, but is their time to LISTEN. They should be noting any questions or action items that need to be answered or directed to management or a committee. The Open Meeting Act prohibits directors from discussing (or orating) on matters not disclosed on the agenda, per Civil Code Section 4930(a). However, subparts (b) and (c) of Section 4930 allow directors to answer questions or request matters be referred to management, staff, or a committee, which should happen AFTER open forum ends. Board members who abuse open forum by interrupting members cannot fairly insist that homeowners in the audience not interrupt board deliberations. Finally, it’s bad form to use one’s board seat as a platform to bully or criticize other members. Sounds like someone should gently rein this person in a bit. Best, Kelly

Dear Kelly: In an attempt to make board meetings brief, they have taken to voting the “consent calendar” as one agenda item, without any prior members’ knowledge, discussion or even speaking the items on it. This month these include: approve the minutes; acknowledgement that board members have reviewed the financials; treasurer’s report; and manager’s report. These reports are provided to the board by the treasurer and manager prior to the meeting. They are then adopted by the Board at the meeting always without discussion or disclosure of the contents. The reports are then attached as separate PDFs to the minutes of the meeting which are provided to the members a few days after the meeting. Should not these reports be seen by the members before the Board votes on them? How can this square with the open meeting rules or intent? R.S., Solana Beach

Dear R.S.: Consent calendars are a powerful tool to dispose of items not expected to require any discussion – such as the items you list- in one quick vote without deliberation. The consent calendar items still must be listed on the posted agenda, and any director can without explanation ask for an item to be removed and handled as a separate motion. Since consent calendar items are not discussed, it is another reason to conduct open forum at the beginning of the meeting. However, reports the board receives in their “board packets” are not normally shared with the rest of the HOA unless those reports are accepted and added to the minutes. Sometimes the board packet has confidential information such as multiple bid proposals, or incident reports, or delinquency lists, which should not be shared with the community at large.

Consent calendars are valuable because they preserve time and energy for the items which might be controversial and need board focus. Even the smallest HOAs would benefit from their use. One caution – don’t overuse consent calendars as a technique to avoid discussing matters which are not truly routine or non-controversial, because that can quickly destroy a board’s credibility. Nothing is more important than the HOA’s trust in their board.

Sincerely, Kelly

Is Our Board Following the Open Meeting Act?

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By Kelly G. Richardson, Esq., CCAL, HOA Homefront Column

Mr. Richardson: Is homeowner open forum a requirement in California or just handy for everyone involved? Or, should I speak with each board member individually to ask for that time in the monthly board meetings? Or, is that only an agenda item at the yearly membership meeting? S.L., El Centro.

Dear S.L.: An open forum opportunity is required by Civil Code Section 4925 in all open board meetings and in membership meetings. This is mandatory. The board “shall” establish a reasonable time limit for members to speak. A common limit is 3 minutes per speaker, with many boards allocating up to 30 minutes for the open forum session portion of the meeting. It’s also a good idea to establish some reasonable open forum policies so attendees know what is expected.

Open forum is not only required but is a valuable opportunity for boards to hear from their members; their neighbors. It’s an important aspect of healthy HOA governance, showing that members are heard. Best, Kelly

Dear Kelly: I learned that our board authorized themselves to approve non-emergency expenses up to a stated amount between meetings if two or more directors agree to it. Isn’t this a violation of the Open Meeting Act? There have been items such as holiday lighting that never appeared on the agenda or reflected in minutes due to this self-imposed power. L.C., Anaheim Hills.

Dear L.C: The board should avoid granting directors blanket authority to spend funds outside of official board meetings. If the board does so, then decisions are being made outside of board meetings. Corporations Code Section 7210 allows the board to delegate certain activities to the manager, a committee, or other persons but the board still must ultimately be in control. So, at minimum those decisions should be disclosed and ratified by the board in its next open meeting. I suspect many of your neighbors may agree with you that your board’s current practice is not transparent. I can understand the practice if your HOA does not have a professional manager, but otherwise I think it’s a bad idea. Sincerely, Kelly.

Kelly: Our HOA board members have discussions and decide who will serve as president, VP, etc prior to a board meeting.  This occurs annually in preparation for the new term and in some cases, before the election of board members and/or after the election of board members but before their first meeting.  Should these discussions and decisions be part of the open meeting and should these discussions and decisions occur outside of board meetings? Thank you, L.O., Nipomo.

Dear L.O.: The selection of officers is not a topic permitted for executive session under Civil Code Section 4935(a). Some boards mistakenly refer to officer discussions as “personnel” (one of the few topics allowed to be handled in closed sessions) but “personnel” refers to HOA employees. Officer appointments are decisions of the board and must be made in open session. A common mistake after annual meetings is to forget to announce four days before that after the election there will be a short board meeting to elect officers. If the board does not wish to have a meeting (with agenda notice and open forum opportunity) right after the membership meeting, then it should hold off on electing officers until its next announced meeting. Best, Kelly.

City Partners With AI to Rework Condo Property Tax Assessments

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New York City HABITAT Magazine

The robots are coming! The robots are coming!

New York City’s arcane, unfair and unloved property tax system is about the get help from a new source: artificial intelligence.

The Department of Finance has partnered with technology firm C3 AI for a six-month pilot program that will explore using AI to calculate the assessed value of the city’s residential condo properties, Crain’s reports. The program will use machine learning along with market and sales data, and it will investigate how practical it is to base property tax bills on sales comparisons for condo buildings with more than 10 units. Under the current system, co-op and condo assessed values are based not on sale prices but on the the value of comparable rental properties. (Assessed values, a fraction of market values, are part of the equation used to calculate property tax bills.)

C3 AI’s “approach is considered a more fair and transparent way to assess properties,” and the program could boost property tax revenues if successful, according to a notice published in the city record.

C3 AI’s appraisal platform would allow the city to identify and resolve data discrepancies, appraise several properties simultaneously and identify sites that require additional judgment, according to a promotional video on the company’s website. Every appraisal comes with “an evidence package and sales comparables that explain how the AI property value was generated.”

Valuations play a huge role in New York’s notoriously byzantine and controversial property tax system. Although officials tend to undervalue buildings, which leads to a lower tax bill, owners still frequently go to court to challenge their valuations.

The city released its tentative property tax assessment roll for fiscal year 2026 in January, which put the overall market value of the city’s buildings at about $1.6 trillion, up 5.7% year over year. It anticipated a 7.3% increase in the market value for condos, co-ops and rental apartment buildings.

If successful, the C3 AI pilot program could lead to a longer-term contract. Meanwhile, the organization Tax Equity Now New York (TENNY) is in the middle of a lengthy legal battle seeking to upend New York’s overall property tax system. The group argues that it breaks federal fair-housing laws by overtaxing neighborhoods where people of color make up the majority of residents and breaks the state real property tax law by overtaxing rental properties compared to owned homes.

The current law puts a cap on annual property tax increases, which has had the effect of lowering tax bills in neighborhoods where property is appreciating rapidly, while punishing neighborhoods that are experiencing slow or no appreciation in values.

The TENNY suit dates back to 2017, and the Court of Appeals revived it last year.