An illegal HOA board meeting can have cascading negative effects on any association. Board members can face legal problems and even have their credibility called into question. To avoid illegal meetings, association boards must understand the laws that govern them.
What is an Illegal HOA Board Meeting?
Homeowners associations rely on board meetings to get things done. At these meetings, board members discuss business and vote on decisions that keep operations running. That said, boards can’t just hold meetings without thought and process. There are certain requirements to meet.
An illegal HOA board meeting is one that violates state laws or the association’s governing documents. Common violations include failing to provide proper advance notice, holding secret meetings without announcement, or continuing a meeting without a quorum.
What Constitutes Illegal Board Meetings in Texas?
In Texas, Section 209.0051 outlines specific requirements for HOA board meetings. The following violations can render a board meeting illegal:
1. Lack of Notice
Owners must receive notice of regular and special board meetings. This notice must include the date, time, location, and general subject matter.
2. Closed Board Meetings
Board meetings must be open to all homeowners, except for executive sessions. The board may adjourn into executive session to discuss personnel matters, pending or threatened litigation, contract negotiations, enforcement actions, attorney communications, privacy matters, and other confidential matters approved by the board.
3. Voting in Secret
While Texas law generally allows boards to take action outside a meeting, including voting electronically, certain matters must be discussed and voted on at a properly noticed open meeting.
The following matters must be considered and voted on at a noticed open meeting:
- Fines
- Damage assessments
- Foreclosure actions
- Most enforcement actions
- Dues increases
- Special assessments
- Architectural appeals
- Owner suspension hearings
- Borrowing or lending money
- Adoption or amendment of governing documents
- Annual budgets and budget amendments
- Purchase or sale of real property
- Filling board vacancies
- Most capital improvement projects
- Election of officers
Of course, some of these involve confidential or identifying information. In such cases, the board must vote on the issue without disclosing private information, such as a delinquent owner’s name or the name of an owner with an existing violation.
4. Inadequate Quorum
Every board meeting must have a quorum of directors before proceeding. If the board conducts official business without a quorum, it counts as an illegal HOA board meeting.
Quorum requirements can vary depending on the association. Boards should check their bylaws to understand what constitutes a quorum.
5. No Minutes
Texas law requires the board to take written minutes of each regular and special board meeting. Subsequently, the board must make them available for owner inspection upon written request.
Consequences of an Illegal HOA Board Meeting
Some boards may simply brush off an illegal meeting, claiming it’s nothing serious. Yet, there are several consequences that can follow. These include the following:
Invalidation of Votes and Decisions
Texas law requires boards to vote on certain decisions at a properly noticed open meeting. Failure to do so can invalidate the action. If the board passes a dues increase in executive session, for example, homeowners can challenge the decision.
Frequent instances of illegal voting will only delay operations. Instead of commencing changes immediately, the board will have to postpone the decision to the next meeting. This can stall important projects and even impede cash flow.
Disputes and Distrust
A single instance of an illegal HOA board meeting may be excusable. But when board members consistently hold unlawful meetings, they can destroy homeowner trust and increase complaints.
Before long, owners will start to question the board at every turn. Once they reach their breaking point, they may even move to remove certain directors.
Legal Challenges
Homeowners can slap a lawsuit on boards that continue to breach board meeting rules. This can increase legal costs and jeopardize the association’s reputation. Additionally, boards that exhibit gross negligence or willful intent may face legal penalties and be held personally liable.
How to Avoid an Illegal HOA Board Meeting
Here are the best strategies for avoiding illegal board meetings.
1. Check State Laws and Governing Documents
First, boards should check state laws and their governing documents. Of course, simply understanding the requirements isn’t enough. Board members must ensure they comply with them as well.
2. Provide Proper Notice
Texas law requires associations to give advance notice of any board meeting. This notice must include the date, time, and location of the meeting, as well as the general subject to be discussed. If the board will meet in executive session, the notice must also include a general description of the matter to be discussed at the closed meeting.
There are two options for the delivery of this notice:
- By Mail. The HOA can mail the notice to every owner. If it chooses this method, the notice must be mailed no more than 60 days before the meeting and no later than 10 days before the meeting
- By Post and Email. Instead of mailing notices, the HOA can post notices in a conspicuous place and email them to owners who have provided an email address. Bulletin boards and the community website are good examples. For this method, regular board meetings require at least 144 hours’ notice, and special board meetings require at least 72 hours’ notice.
3. Invite All Homeowners
According to Texas law, board meetings must be open to all homeowners. The only exception is when the board convenes in executive session, but such closed meetings are only permitted for specific topics.
4. Establish a Quorum
Before proceeding with the meeting, the board must take attendance of all present directors and establish a quorum. This quorum must be recorded in the minutes. While quorum requirements can vary by bylaws, most HOAs require a majority of board members.
5. Utilize Executive Sessions Properly
Closed meetings are allowed, but boards must use them only to discuss certain approved matters. In general, voting on these matters must still take place at the open meeting.
6. Record Minutes
Every meeting must be documented through minutes. For executive sessions, the minutes can stick to general descriptions, without disclosing any identifying or sensitive information.
Knowledge is Power
An illegal HOA board meeting comes with several consequences, so boards would be wise to avoid it at all costs. Of course, avoidance hinges on knowledge. Board members must understand what makes a board meeting illegal. Only then can they take the proper steps for prevention.
PAMco offers exceptional HOA management services to communities in Central Texas. Call us today at 512-918-8100 or contact us online to learn more!
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