The community association board meeting is an essential function for the business operations of the association. Not every aspect of association business will be discussed during the meeting. But for single-family associations, Chapter 209 of the Texas Property Code details fifteen (15) items where actions on these items must take place during the open session of a properly noticed board meeting when homeowners are allowed to be present. For purposes of this article, they will be referred to as “The Open Meeting 15”.
The Law
The Property Code outlines the topics covered by The Open Meeting 15 in Section 209.0051(h).
“Except as provided by this subsection, a board may take action outside of a meeting, including voting by electronic or telephonic means, without prior notice to owners under Subsection (e), if each board member is given a reasonable opportunity to express the board member’s opinion to all other board members and to vote. Any action taken without notice to owners under Subsection (e) must be summarized orally, including an explanation of any known actual or estimated expenditures approved at the meeting, and documented in the minutes of the next regular or special board meeting. The board may not, unless done in an open meeting for which prior notice was given to owners under Subsection (e), consider or vote on:
(1) fines;
(2) damage assessments;
(3) initiation of foreclosure actions;
(4) initiation of enforcement actions, excluding temporary restraining orders or violations involving a threat to health or safety;
(5) increases in assessments;
(6) levying of special assessments;
(7) appeals from a denial of architectural control approval;
(8) a suspension of a right of a particular owner before the owner has an opportunity to attend a board meeting to present the owner’s position, including any defense, on the issue;
(9) lending or borrowing money;
(10) the adoption or amendment of a dedicatory instrument;
(11) the approval of an annual budget or the approval of an amendment of an annual budget;
(12) the sale or purchase of real property;
(13) the filling of a vacancy on the board;
(14) the construction of capital improvements other than the repair, replacement, or enhancement of existing capital improvements; or
(15) the election of an officer.”
Approaches to The Open Meeting 15 During the Board Meeting
While actions on these items must be taken and mentioned in the minutes of a properly noticed board meeting, board members still need to be cautious in their approach to these subjects during the meeting.
1. Fines – Homeowner names and addresses must be kept confidential, but the types of fines can be mentioned. Boards are recommended to use account numbers when referring to fines. For example, “Account numbers 135786 was fined $50 for a trash can violation, 135796 was issued a second fine of $100 for failure to paint the exterior of their home using an ACC approved color.”
2. Damage Assessments – As with fines, homeowner names and addresses must be kept confidential. Refer only to account numbers when voting to enter collections.
3. Initiation of Foreclosure Actions – Keep homeowner name and address confidential. Refer only to account numbers when voting on foreclosure actions.
4. Initiation of Enforcement Actions – Refer only to account numbers, not homeowner names and addresses. Describe the enforcement action being taken. If the homeowner wishes to discuss the matter at the meeting, this can be done during the executive session.
5. Increases in Assessments – State the amount of increase when voting. During the discussion phase prior to the vote, detail the reasons for an assessment increase, such as increase in vendor and/or insurance costs, unexpected expense in the prior calendar year, etc.
6. Levying of Special Assessment – State the amount of the special assessment per homeowner being voted on, during the discussion detail why the special assessment is needed.
7. Appeals from a Denial of an ACC Approval – Only refer to account numbers and not homeowner names or addresses. Limit details during board meeting.
8. Suspension of Homeowner Rights – Only use account numbers. Reminder, this action is only when the homeowner has not been able to come before the board to offer a defense. Limit the description of the violation causing the vote to a general statement, such as “failure to pay the annual assessment,” or “failure to comply with CC&Rs.”
9. Lending or Borrowing Money – Describe the amount, its purpose and payback terms, including interest rates. This is typically a step of last resort.
10. Adoption or Amendment of a Dedicatory Instrument – Detail what is being adopted or amended. Allow for any final clarification by board members on specifics before the final vote.
11. Approval or Amendment of an Annual Budget – Specify the amount of the budget. The board should offer general details on how the budget will be broken up throughout the year. Specifics can be requested by homeowners separate from the meeting or via budget workshops prior to the board meeting.
12. Sale or Purchase of Real Property – Describe the property being bought or sold, the reasons behind choosing to buy or sale, the party on the other side of the transaction and the agreed upon sale or purchase price.
13. Filling of a Vacancy on the Board – This should be a quick item with limited discussion. Discussion of a board filled vacancy can take place during executive session; however, the vote must occur during the open session.
14. Construction of Capital Improvements – Detail what the new construction will consist of and provide a generalized description of expectations, including location, costs and construction timeline.
15. Election of an Officer – As with filling a vacancy, discussion on which board member would like which officer position can take place during executive session. The meeting should be limited to only the vote with a reminder to those in attendance at the board meeting that Officer positions are voted on by the board.
A detailed chart of The Open Meeting 15 can be found here.
By sticking to the approaches detailed above, community association board meetings will run smoother, the business of the board can be done effectively and members of the association can be assured that board members are acting in their best interest.
