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Video Interview: Discussing HOA Elections with LXBN TV

Following up on my recent webinar discussing the subject, I had the opportunity to speak with Colin O'Keefe of LXBN on the HOA elections. In the brief interview, I explain some big best practices in elections and a few common missteps I frequently come across. 

HOA Elections: A Step-by-Step Guide to Plan, Properly Notice, and Execute Successful Elections

Stop us if you've heard this one before: You announce an HOA election providing proper notice, yet only a handful of owners show up to vote. You end up short of your quorum requirements, and you have to start all over again with your fingers crossed that next time, your luck will be better, and your election will be successful. Or instead, you hold your election, get definitive results—you think—but then the election gets challenged.

We can help you do better! Join HOALeader.com for an in-depth webinar on October 9 led by two community association lawyers who've devoted their extensive—and impressive—careers to solving the challenges HOAs face every day. You'll log out of the webinar with valuable, workable tactics you can implement immediately to make your election process smoother, more successful, and less contentious.

For more information, or to register for this webinar, visit: www.HOALeader.com

LeClairRyan Attorneys Attend the Virginia Leadership Retreat (VLR): 2014

This weekend, four members of LeClairRyan's Community Association Industry Team are attending the Virginia Leadership Retreat (VLR) at the Homestead in Hot Springs, VA. The team has attended the annual conference each year since its inception six years ago, often having one or more of its attorneys speaking at the event. Pictured below at the Homestead (from left to right) are Brian Muse, Liz White, Will Sleeth, and Lori Schweller.

Is A Member Legally Allowed To Review Voting Records Relating To Elections For An HOA Board Of Directors?

Recently, we had a reader ask whether a member of a homeowners association is legally permitted to review and inspect voting records relating to elections for the board of directors of the member's HOA.

The short answer is that it depends on the nature of the records requested as well as other factors. Virginia Code Section 55-510 spells out when an owner can review certain records for a property owners' association. If an owner (i) is in good standing with the association, and (ii) makes a records inspection request "for a proper purpose related to his membership in the association," then he is entitled to review association "books and records" that do not fall under any statutory exemptions. Section 55-510's discussion of "books and records" needs to be read in conjunction with other provisions of the Virginia Code (and chiefly, the Virginia Nonstock Corporation Act) that elaborate on what exactly constitutes "books and records" (as not every document in an association's possession constitutes a "book and record" as the term is defined in the Virginia Code). As a result, this analysis can sometimes be rather technical, and associations should consult with their legal counsel to ensure that they don't provide for the inspection of any records that they're not legally required to provide.

Under this analysis, assuming that the owner is in good standing with the association, and makes the request "for a proper purpose related to his membership in the association" (and does not, for example, submit the request for the purpose of attempting to pursue litigation against the association), then it would be appropriate for an association to provide the owner with a copy of the vote tally sheet that the association used to count all of the votes. Arguably, ballots and proxies do not constitute "books and records" as defined under Virginia law, and therefore should not be produced by the association. Moreover, if an association's governing documents require or permit voting by secret ballot, producing ballots with names on them or directed proxies would essentially defeat the goals behind such.

Keep in mind that if the association has adopted a records inspection and copying policy, it could charge the owner a monetary fee for expenses related to searching for the records and copying them.

Has Your Homeowner's Association Adopted a Records Copying Policy Yet?

If your homeowners association has not yet adopted a records copying policy, it should move quickly. On July 1, 2012, a new law in Virginia goes into effect that requires boards of directors of associations to have adopted a cost schedule if the association wants to charge owners for the costs of copies and labor related to producing books and records for inspection, pursuant to records requests by owners. Under the current law, associations are not required to have adopted a formal cost schedule in order to impose such charges.

Section 55-510(D) states that the cost schedule must: (i) specify the charges for materials and labor, (ii) apply equally to all members in good standing, and (iii) be provided to such requesting member at the time the request is made. Because some owners make very broad records inspection records, and because some owners make frequent requests, every association should have a cost schedule in place in order to pass the costs (which can sometimes be substantial) along to the owners. If your association has not yet adopted such a policy, it should contact its attorney shortly so that it can put one it place as soon as possible.

Can an HOA Board Go Into Executive Session to Dodge Controversy?

An HOAleader.com reader writes:

"I participate on a board of managers (BOM) for an HOA in New England. The complex consists of 12 buildings and 140 units. The BOM (for which I am one of five) are authoritative and condescending at times to unit owners. We are involved in litigation with an adjoining marina and have several collections and foreclosure challenges as well. We are attempting to hire a new management company as the previous company (for the past five years) has resigned after I exposed them for billing improprieties. There was also a conflict of interest as it was the son of one of our board members.

"The BOM brought back the previous management company who was fired for other infractions on a temporary basis until a new management company can be hired. The BOM organized a search committee, which also included one BOM to keep consistency with the board's wishes. The committee did an excellent job and selected one of the six candidates by an overwhelming margin. The BOM balked at the selection and is now going to meet in executive session to block out unit owners from the decision process.

"Although I know we have bigger problems than this, it's frustrating for people to volunteer, exceed at the task that was asked, only to be knocked down with a multitude of challenges to their decision. Any state law (in Massachusetts) that prohibits executive sessions for something that's not legally or financially (individual unit owner) sensitive?"

Here, our experts give our reader some insight.

Executive Session: States Vary

What's executive session? It's a process by which a board meets privately to discuss matters that shouldn't be revealed generally. Each state has different rules on the practice.

Some don't permit it. "In Florida, we don't have this executive session concept," says Jed L. Frankel, a partner at Eisinger, Brown, Lewis, Frankel & Chaiet PA in Hollywood, Fla., who advises community associations. "Everything is open unless there's an attorney–client privilege issue. Maybe there's litigation or there need to be confidential communications between the board and its counsel. That would be an exception where only board members and possibly the manager would be permitted to attend. Other than that, everything in Florida is going to be an open meeting."

Many other states, however, permit use of executive session in specific circumstances. "There are times when boards can and should go into executive session depending on state law and the governing documents," says Elizabeth White, a shareholder and head of the community associations practice at the law firm of LeClairRyan in Williamsburg, Va. "In Virginia, we have open meeting requirements, which compel boards to meet in the open. So members should have notice of the meeting and an opportunity to attend and observe. Then there's a list of exceptions, which say a board may go into executive session to discuss things like legal advice, pending litigation, contracts under negotiation, and anything required by law to be confidential."

Click here for the entire article.

When a Board Is Afraid to Take the Heat on a Controversial Topic

In this week's tip, we answer a reader's question about whether his board can slink away into executive session simply because there's a controversial topic—which management company to hire—on the agenda.

What's executive session? It's a process by which a board meets privately to discuss matters that shouldn't be revealed generally. Each state has different rules on the practice.

Some don't permit it. "In Florida, we don't have this executive session concept," says Jed L. Frankel, a partner at Eisinger, Brown, Lewis, Frankel & Chaiet PA in Hollywood, Fla., who advises community associations. "Everything is open unless there's an attorney–client privilege issue. Maybe there's litigation or there need to be confidential communications between the board and its counsel. That would be an exception where only board members and possibly the manager would be permitted to attend. Other than that, everything in Florida is going to be an open meeting."

Click here for the entire article.

Community Association Attorney Liz White Published in Currents Magazine

Currents Magazine recently published an article by Liz White entitled "Best Practices Ensure the Best Outcome." The article contains a discussion of ways that community associations can run efficient elections and ensure that they comply with the legal requirements contained in their governing documents and in Virginia law.

To view a copy of the article, click here.

LeClairRyan's Liz White Quoted in National Media Article on Board Meetings

LeClairRyan's Liz White was recently featured in an article on Board Meetings that was featured by several national media outlets, including Forbes magazine, the Atlanta Business Chronicle, the Baltimore Business Journal, the Business Journal of Phoenix, and the Cincinnati Business Courier. Locally, the article was featured by NBC12. To view the article, in which Liz discusses tips for an effective board meeting (and in which she shares some humorous tidbits about board meetings gone awry), click here.

Can Owners View Draft HOA Meeting Minutes?

Editor's note: Liz White was recently quoted in the following article on HOAleader.com, concerning owners' ability to view draft meeting minutes.

A reader on the HOAleader.com discussion board asks: "A member requested a copy of the board meeting minutes prior to the approval. We conduct open board meetings, and [agendas] are posted in advance. Does a member have the right to these unapproved minutes?" Fellow HOAleader.com readers were split in their responses to our reader's quandary. Here, experts tell us how they'd approach the issue. 

The Simple Answer

 "That's a real sticky wicket," says Elizabeth White, a shareholder and head of the community associations practice at the law firm of LeClairRyan in Williamsburg, Va. White doesn't just mean the distribution of draft meeting minutes. Our reader's question brings together several difficult issues, including who's entitled to see minutes when and what should be in meeting minutes.

Continue Reading...

More on Contracts and Executive Session

We recently received a question regarding a community association board’s consideration of contracts in executive session. A contractor's bid can come in many forms, e.g. a formal written contract, a written proposal, or even an oral statement.  Regardless of the form, a contractor's "bid" is ordinarily the contractor's "offer" to perform a designated scope of work for a specified price.  An enforceable contract is formed when an offer is accepted.  The manner in which the offer is accepted will vary and may depend on the form of the contractor's bid or the level of formality required in light of the nature or scope of the work to be performed.

When a property owners’ association or condominium association requires the services of a contractor, bids will typically be solicited by its board of directors from several contractors.  The purpose of soliciting bids is to obtain "offers" to perform the required services - which offers, if accepted by the board, will form a contract between the association and the contractor.  The Condominium Act, at Virginia Code Sec. 55-79.75, and the Property Owners’ Association Act, at Virginia Code Sec. 55-510.1, each provide that the respective association's board may convene in executive session to "discuss and consider contracts."  It is therefore appropriate for an association's board to convene in executive session to discuss the terms of various bids received by contractors, in the course of considering whether to enter into a contract with any of the bidding contractors on the terms proposed in their bids.

Discussing Contracts and Bids in Executive Session

We recently received a question regarding the ability of condominium boards to legally convene in executive session pursuant to § 55-79.75 of the Virginia Code. Specifically, the question asked whether § 55-79.75’s provision stating that boards may convene in executive session to “discuss and consider contracts” grants boards the authority to discuss and consider bids.

Answer:

The discussion and consideration of bids for contracts relating to the provision of goods and/or services to a Virginia condominium is an important exception to the general requirement that condominium boards meet in the open. The bid process is an integral part of the contracting process. An association's ability to competitively bid out work is largely dependent on its ability to obtain bids from reputable contractors.

Discussing bids in an open session of the board risks contaminating this process and destroying the association's ability to get competitive contracts from licensed, reputable contractors. Many quality contractors would be reluctant to engage in the competitive bid process if they thought that their competitors would have access to their bids. In the case of competitive bidding, information is power. A condominium board in Virginia is acting responsibly and within its rights to discuss and consider contract bids in closed (executive) session. In fact, there is a strong legal argument that the board would violate its fiduciary duty if it were to discuss such bids in open session.

Free Seminar by the LeClairRyan Attorneys -- April 17th

On April 17, 2010, LeClairRyan's Community Association Team will be presenting a free seminar in Williamsburg, Virginia, entitled "Advanced Legal Aspects of Community Associations."

We invite you to join attorneys Liz White, Dan Quarles, Megan Scanlon, and Will Sleeth as they will discuss four topics that board members and managers frequently encounter as they govern and manage associations: 

 

  • Leasing Restriction Amendments
  • Enforcement and Collection of Assessments and Fines
  • Board Meetings
  • Rules and Regulations and Architectural Guidelines

Resource and reference materials will be provided free of charge on a cd.

Again, the seminar will take place on April 17th, from 9 A.M. to 1 P.M., at Jamestown High School in Williamsburg, Virginia.

Space is limited and registration is required, so please click here to register, if you have not already done so. We look forward to seeing you, and encourage you to contact us if you have any questions.