QUESTION: I sent a letter to a board member questioning a major expense the association is undertaking. When the director tried to include this letter in the minutes, the board refused. Is this proper? I always thought a director could have letters from residents added to the minutes so they’re part of the permanent record of the association.
ANSWER: The board’s refusal was proper. Neither members nor directors have a right to include their letters in the minutes. The purpose of minutes is to record the official business of the board, not act as an outlet for grievances. If letters were included in the minutes, I can only imagine the flood of correspondence from owners with axes to grind and personal agendas. Those potentially inflammatory, inaccurate and defamatory letters would then be published to the membership and included in escrow demands for buyers to read. I shudder at the thought.
OF SOLAR PANELS
A new case from the Court of Appeals provides some guidance on architectural review of solar energy systems.
Facts. A homeowner in the Tesoro del Valle Master Homeowners Association installed solar panels on a slope adjacent to his property without HOA approval. For aesthetic reasons and because of slope structure restrictions, the HOA wanted the panels on the owner’s roof. The owner refused and the association sued.
Aesthetic Considerations. The homeowner argued that “aesthetic considerations” were an improper part of the review process and violated Civil Code §714. The court disagreed. It ruled that “an evaluation of a proposed solar energy system–just as any other proposed improvement–would involve consideration of aesthetics.”
Cost Considerations. Expert testimony by the association showed that the cost of installing the solar panels on the owner’s roof was actually cheaper than installing them on the slope. Based on the testimony, the court ruled that the HOA’s guidelines were not unduly burdensome and, therefore, reasonable.
Duty to Redesign. The owner then argued that once the architectural committee disapproved his original application, it had a duty to redesign his solar energy system to meet their guidelines. Again the court disagreed. The court found that the law imposed no such burden on associations. Per statute, the only obligation by the committee was to inform the owner of the basis for its denial of his application. The court ruled that “the burden is on the homeowner to submit an application that is complete and sufficient to generate [architectural committee] approval.” (Tesoro del Valle v. Griffen).
RECOMMENDATION: The court’s ruling does not give associations license to deny any and all applications for solar energy systems. It does, however, demonstrate that if an association’s architectural guidelines are reasonable, they are enforceable. If boards are unsure about their guidelines, they should have an architect and legal counsel review them. For more information, see Solar Panels.
OF MINUTES
QUESTION: Our board sometimes approves meeting minutes by email (ex: annual meeting minutes for prompt notification of election results; monthly meeting minutes where there will be no meeting the following month). Does the amended Open Meeting Act allow such approval, since minutes are only reports of actions and don’t constitute actions in themselves?
ANSWER: Good question. I like your practical approach to the issue but I suspect a court would be less practical in its ruling. Judges have an odd predisposition toward following the law. Even though minutes are only reports, approval of minutes (motion, second, all in favor) is itself a board action. For more information see board decisions by email.
ON BOARD
QUESTION: I have been the chair of a committee for four years. I am considering running for the board. Does my chairmanship of the committee create a conflict if I am elected to the board?
ANSWER: There is no conflict of interest. In fact, chairing a committee is good experience for serving on the board. Unless your bylaws provide otherwise, boards may appoint anyone they believe would be helpful (whether owner, renter or otherwise) on the committee. Moreover, the board president often serves as an ex officio member of all committees of the board. If so, the president has the right but not the obligation to participate in the committees. (Robert’s Rules, 11th ed., p. 456, 497.)
AND FIDUCIARY DUTIES
QUESTION: We are a small HOA and self-managed. Directors kept most HOA records on their personal computers. No longer on the board, the former directors now refuse to make information including prior minutes available to the current board. What are the rules about passing records from one board to the next?
ANSWER: Most of the documents in question are probably corporate records and belong to the association, not the former directors. Minutes are clearly corporate records. Your former directors had a fiduciary dutypreserve corporate records on behalf of the association and then pass them to the incoming board. It sounds like your ex-directors are in breach of their fiduciary duties. If they are worried about the records being altered or destroyed by the incoming board, they can make copies (at their own expense) and then turn over the originals to the new board.
IRS NOW CHASING HOMEOWNER ASSOCIATIONS
Assessment Refund. Did someone send you a trick question, asking about raising assessments? Dues were increased by $11 but 20% and 5% of the current $36 would be $9. An $11 increase would violate the Davis-Stirling Act. -Jean M.
RESPONSE: A number of you picked up on this and sent me emails. I’m impressed with the sharpness of my readers. The person who sent the original question included details that the increase had occurred over several years and, therefore, did not violate Davis-Stirling limitations. Kudos to everyone who spotted this issue.
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 Adrian J. Adams, Esq. |