Month: October 2013

Executive Session: Lifting the Veil of Secrecy – Guest Blog by Dan Zimberoff

Executive Session

 

The use of executive session is often a confusing and misunderstood function of a community association board’s powers.  We commonly see both over and underuse of this privilege by well-intentioned, but misinformed boards.  The law differs between Washington and Oregon.

In Oregon, both the Condominium Act and Planned Community Act mirror one another and expressly address executive session in the following manner:

All meetings of the board of directors of the association shall be open to owners, except that at the discretion of the board, the board may close the meeting to owners other than board members and meet in executive session to: (A) Consult with legal counsel. (B) Consider the following:    (i) Personnel matters, including salary negotiations and employee discipline; (ii) Negotiation of contracts with third parties; or   (iii) Collection of unpaid assessments. ORS 100.420(1)( a) (Condo Act); ORS 94.640(8)(a) (Planned Community Act).  Note that subsections (A) and (B) are distinct, meaning that executive sessions can occur when a board consults with legal counsel or considers the three enumerated issues (with or without legal counsel present).

In Washington, there is no requirement under the Washington Condominium Act or Horizontal Property Regimes Act for condominium boards to meet in open; though, we highly recommend they do so.  Thus, there is no reference to executive session in either statute. For Washington HOAs, under the Washington Homeowners Association Act: Upon the affirmative vote in open meeting to assemble in closed session, the board of directors may convene in closed executive session to consider personnel matters; consult with legal counsel or consider communications with legal counsel; and discuss likely or pending litigation, matters involving possible violations of the governing documents of the association, and matters involving the possible liability of an owner to the association.   RCW 64.38.035(2).  The statute goes on to describe procedures for conducting business under executive session that are discussed further below.

Now that we’ve covered what the law says, there are some practical suggestions for community association boards to follow when utilizing executive session (regardless of the type of community or state where they reside).

1. Boards should use executive session in a consistent and uniform manner, that is, avoid varying its use depending upon which owner they are dealing with.

2. Executive session should not be used as an avoidance tactic.  Boards should not convene or threaten to convene in executive session every time a controversial or contentious issue arises.  The issues upon which a board can legally enter executive session are stated expressly within the statute applicable to their association, and the statutes can be used as guidelines for all communities.

3. The Washington Homeowners Association Act provides strict procedures when utilizing executive sessions that are recommended for all boards—condo or HOA, Washington or Oregon:

a. The board chair should entertain a motion to enter an executive session that shall state specifically the purpose of the closed session.

b. Reference to the motion and the stated purpose for the closed session shall be included in the minutes.

c. The board of directors shall restrict the consideration of matters during the closed portions of meetings only to those purposes specifically exempted and stated in the motion.

d. No motion or other action adopted, passed, or agreed to in closed session may become effective unless the board of directors, following the closed session, reconvenes in open meeting and votes in the open meeting on such motion, or other action which is reasonably identified.

4. If minutes are taken during executive session, they should be marked as “Privileged” and maintained in the same manner as other confidential documents, i.e., not available for disclosure to homeowners or third parties absent court order or extraordinary circumstances. When used appropriately and discriminately, an executive session can be an effective, and essential, tool for community association boards.  Proper procedures are paramount in maintaining the integrity of a board’s decision-making process.  Do not hesitate to contact the team at Barker Martin if you have any questions relating to an executive session or any related topic.

Board Members Beware… Your Emails Probably Constitute an Association Record – Guest Blog by Dean Martin

Email can be dangerous if used improperly

Email is an incredibly useful tool for board members given everyone’s busy schedule and the number of issues that arise between board meetings. But, like many tools, email can be a dangerous thing if used improperly. Just remember, it is not unusual for owners to request certain association records, including any emails to or from board members about association business. They will argue that any such email is an association record, and they are therefore entitled to review and copy any such communication. Unit owners can always demand to see non-privileged association records. For Oregon association see ORS 100.480 and ORS 94.670. For Washington associations see RCW 64.32.170, RCW 64.34.372 (1), RCW 64.38.045. These days most people view emails as confidential communications and while they are certainly less public than Facebook posts or Tweets, they are not always confidential. Unfortunately, that false sense of confidentiality prompts many people to write things that they would never want to see on the front page of a newspaper or community newsletter.

To avoid the disclosure of embarrassing or even damaging board emails, there are two basic steps each board member can take to protect themselves:

1. Create a separate email for association business.

This is a good idea so that you can be certain you have not mixed personal and association emails. It also helps prevent a unit owner from requesting all of your personal emails in order to make sure they see every email you sent that involved association business. Lastly, an association email account (e.g., VillaPointeTreasurer@gmail.com) allows for historical and institutional information to be passed down easily.

2. Do not mix personal and business information in the same email.

Assume that every board email will ultimately be made public and draft them accordingly. Emails by and between board members or the manager are not the place for venting. They are business communications and should always be professional. Draft your board emails as a board member and keep in mind that all of the owners in your association may have the right to read what you are writing. A little vigilance goes a long way.

 

Emergency Preparedness & Preemptive Actions – A Guest Article by Jeremy Stilwell

Emergency preparedness is often viewed as a topic that relates to large-scale storm or earthquake-related concerns. And yes, it is indeed wise to be prepared for such major events. In fact, the United States Federal Emergency Management Agency (“FEMA”) has repeatedly encouraged every US resident to be prepared to take care of their own essential personal needs for a minimum of three days – and has provided extensive guidance on how to become prepared (see http://www.ready.gov/ for specific information).

Have a disaster response plan

When it comes to homeowner associations and the communities where we live, it is not unusual for these associations to have disaster response plans and, for many associations, their professional managers play a key role in those plans. Even so, whether or not you live in a formalized homeowner association, our government leaders have encouraged everyone to be prepared.

As attorneys, we often help homeowners and community associations deal with:

  • insurance coverage
  • deductibles
  • alternative funding
  • assessments
  • governance
  • liability issues that arise following such events

 

Prevention First

Our goal to first of all focus on prevention – in order to minimize the impact of such an event on an association and individual residents.

What preemptive steps can be taken to reduce the amount of damage with which a homeowner must contend?
For one example of how to answer this question, we can examine a less dramatic event and see how we can be prepared for it. In doing so, this preparation can also apply to a more significant event if it were to occur. Let’s assume that a water line bursts in your home or association. With an active water leak, the time required to turn off the water can have a dramatic impact on the amount of damage done.

Questions to help determine if you are properly prepared for this type of siutation

 

  • How much time is going to pass before someone is able to stop the flow of water by activating the water shut off valve?
  • Can a resident shut off the water?
  • Is there an owner or resident that knows where the shut-off valve is and how to turn off the water? Does anyone know who that person is?
  • For professionally managed associations, if the association manager or the management company’s emergency hotline is called, will they know where the shut-off valve is and how to turn off the water?
  • Are there building plans on-site to aid a plumber or other service professionals to respond more efficiently?

 

Certainly knowing the answers to such questions like these will serve the homeowner and community well regardless of the size of the event. Using the above as an example, associations and neighborhoods may want to formally identify people on site that know the location of key utilities and equipment, such as gas, water, electrical, sprinklers, boilers etc. – as well as knowing how to shut them off if needed.

Provide Details to Emergency Responders

While owners should not be relied upon or entrusted to take the place of emergency responders or service providers, they can be helpful in an emergency situation in addition, being able to provide emergency responders or service providers with floor plans, schematics of gas, water, electrical, fire suppression, and HVAC systems can be extremely valuable in an emergency when professional help is available.

List residents who are in need of special assistance

In addition to having knowledgeable owners identified, it’s also a good idea to have a list of residents with special needs identified for emergency personnel, so that those residents can receive priority assistance following any event that impacts the community.

Preparation is Necessary

In short, preparation for emergencies is smart – and it is strongly encouraged by our National, State, and Local government leaders. And when considering such plans, we don’t need to simply think in terms of larger-scale events. Instead, when planning for emergencies it can be just as helpful to take time to consider the smaller emergencies and what you might do on an individual basis to keep them… smaller. By doing so, such preparation will also serve you well if a larger event were to occur. And because no amount of planning will eliminate all emergencies, please know that you are welcome to call me or any of the attorneys at Barker Martin to help deal with your questions or, if an event occurs (whether small or large) we are here to assist you in dealing with the fall-out.

Expert Customized Service for Associations

Emerald Management & Consulting offers a diverse range of property management, accounting, and consulting services.

We are a full-service property management company dedicated to consistently providing high-quality comprehensive management, accounting, and consulting services to diverse types of communities.

We offer full-service and select-service community management
operating and project-specific accounting services

 

  • Construction and insurance project
  • consulting for budget preparation and ratification
  • new association operations start-up
  • transition meeting assistance
  • Board of Directors guidance and consulting
  • preparation and processing of documents related to real estate transactions

 

As a community matures, its management needs may fluctuate. By customizing our services to the needs of our clients, Emerald Management & Consulting has the flexibility to evolve with our clients based on specific needs as they evolve. Emerald Management & Consulting provides a responsive service agreement that allows our clients the capability of selecting services on an as-needed basis. By providing this multi-faceted approach to community management, we are able to tailor services to a wide range of communities, from small or self-managed associations to large-scale and mixed-use properties.