Virginia Community Association Law Blog : Virginia Condo & HOA Lawyers & Attorneys in Williamsburg & York & Newport News & Hampton VA / Property Management Issues

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.

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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.

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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.

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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.

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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.

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