To Zoom or Not To Zoom?

Adapting to challenges during and after the pandemic

The past 18 months have presented HOAs with several new challenges and more than one opportunity to do things differently and still be successful.

The homeowners association industry was one that took quick action when presented with the issue of holding meetings in person during the pandemic. Direction came down through the state government that boards could not meet in person with shelter-in-place orders in effect, thus the need for an immediate solution. Governor Newsom issued Executive Order N-29-20 on March 17, 2020. Paragraph 3 of the order provides, in relevant part:

Notwithstanding any other provision of state or local law (including, but not limited to, the Bagley-Keene Act or the Brown Act), and subject to the notice and accessibility requirements set forth below, a local legislative body or state body is authorized to hold public meetings via teleconferencing and to make public meetings accessible telephonically or otherwise electronically to all members of the public seeking to observe and to address the local legislative body or state body.

In particular, any otherwise applicable requirements that… at least one member of the state body be physically present at the location specified in the notice of the meeting … [a]re hereby suspended. (Emphasis added)

The Common Interest Development Open Meeting Act (“Open Meeting Act”) as outlined in Civil Code section 4090 et seq. is modeled after the California Ralph M. Brown Act and the Bagley-Keene Act (herein referred to collectively as the “Brown Act” for convenience), which are bodies of law that require public and governmental entities to conduct business and discussions in meetings that are open to the public, in the interest of transparency. As such, the Open Meeting Act, like the Brown Act, permits a board to meet via teleconferencing, but requires that at least one director or another designated person (such as the manager) be physically present in an identified location where members can attend in person and hear the board discuss and deliberate on items of association business and address the board during open forum. (Civil Code section 4090(b)).

Due to the shelter-in-place orders during the pandemic, associations ceased providing notice and a physical space for members to participate in meetings and began using remote technologies exclusively. This practice was legally supportable

California Civil Code §4090 – “Board Meeting” Defined

“Board meeting” means either of the following: (a) A congregation, at the same time and place, of a sufficient number of directors to establish a quorum of the board, to hear, discuss, or deliberate upon any item of business that is within the authority of the board. (b) A teleconference, where a sufficient number of directors to establish a quorum of the board, in different locations, are connected by electronic means, through audio or video, or both. A teleconference meeting shall be conducted in a manner that protects the rights of members of the association and otherwise complies with the requirements of this act. Except for a meeting that will be held solely in executive session, the notice of the teleconference meeting shall identify at least one physical location so that members of the association may attend, and at least one director or a person designated by the board shall be present at that location. Participation by directors in a teleconference meeting constitutes presence at that meeting as long as all directors participating are able to hear one another, as well as members of the association speaking on matters before the board. (Amended by Stats. 2013, Ch. 183, Sec. 10. Effective January 1, 2014.)

during the pandemic because community associations function as quasi-government entities with powers, duties, and responsibilities that parallel those of local governments (see Cohen v. Kite Hill Community Assn. (1983) 142 Cal.App.3d 642). Because California courts have analogized common interest developments to local governments, and because common interest developments are required to comply with open meeting restrictions based on the Brown Act, associations were similarly permitted to alter how they conducted board meetings and disciplinary hearings considering the lifted restrictions outlined in Executive Order N-2920. During this transition, many management companies did research to find the most userfriendly option for conducting association business meetings – not only for their clients but also for their team members. It was discovered that the application software trademarked and known as “Zoom” had instantly become the most popular choice. And so, the process of crash course training for both team members and clients began. The use of high-quality cameras and improved lighting expanded the quality of the engagement. The ability to turn users’ microphones on and off permitted managers to maintain decorum during meetings and disciplinary hearings. Although there were still challenges with engagement, associations could continue to conduct business while keeping everyone in compliance with the Open Meeting Act mandates.

What about post-pandemic? Many associations have shared that with the use of electronic meetings there has been an increase in homeowner participation. Many boards of directors are considering keeping the process in place. During the pandemic, meetings were held by necessity and for safety. But it was also found to be a time-saver not only for the manager, who no longer drove to the physical meeting location, but for board members and homeowners, who could easily attend a board meeting from home or business. Valued business partners were also able to attend multiple meetings and personally engage in the information-gathering process for associations.

So how can boards continue using this successful technological solution for meetings once the emergency meeting status is lifted?

As noted above, Civil Code 4090(b) currently permits the use of teleconferencing for conducting board meetings if there is at least one director or designated person located at a predetermined physical location, of which the membership has been properly notified. Thus, under existing law, a board meeting can take place physically and by electronic means simultaneously.

For example, a manager could be at the management office, which would be announced to the homeowners and the board members as the official meeting place. Homeowners and board members could then either attend in person or from any virtual location of their choice. A board member could also choose to host the meeting in the clubhouse, leaving the option for the manager, homeowners, board members, and business partners to attend virtually or in person.

Anticipating the value of technological solutions and increased participation by community members, the California state legislature recently passed Senate Bill 391. The new statute, Chapter 276 of the 2021 Statutes, allows boards to host virtual meetings without providing a physical location but only during certain declared states of emergency. Thus, once the pandemic has passed, managers should be prepared to have a physical location ready for board meetings that has the capability of simultaneously hosting hybrid virtual and in-person meetings. Several conditions must be met to 1) qualify the emergency and thus the need for a remote meeting, 2) to ensure members can participate as fully as possible given technological constraints, and 3) board decisions are clearly attributed and recorded. It is suggested that all boards, managers, and concerned HOA homeowners review this short, new statute to ensure compliance. The chaptered legislation can be found at https://bit.ly/3GYvjFk.

Nothing will ever replace the personal engagement that is experienced in face-toface meetings, but virtual meetings have been a successful option during the challenging times of the COVID lockdown starting in March 2020. However, it is important for managers and boards to think outside the box to create even more successful options for hosting virtual meetings!

Joe Price, CCAM, CAMEx, CMCA is the owner and president of HMC Property Management. After a successful career as a food industry executive, Joe joined the HOA management world nearly twenty years ago. HMC Property Management is based in Concord, California. A special thank you to Jennifer Jacobsen, Esq., of Baydaline & Jacobsen LLP, for her legal review of references to compliance with Civil Code 4090.

The Echo Legislation Tracker

For more information, visit the HOA Advocacy section at the Echo website, www.echo-ca.org/article/hoa-advocacy/

The legislature adjourned sine die on Friday, September

20, 2021. The governor had until October 10, 2021, to sign

all bills that passed both houses. Legislation that goes

to the governor’s desk, generally, can be approved and

signed, or become law by not being addressed by the

governor. Of course, any bill that is sent to the governor

by the legislature may be vetoed and sent back to the

house of origin. Veto power is used sparingly, often as

a threat to amend language favorable to the governor.

Once the bill becomes law it goes to the Secretary of

State, where a chronological chapter number is assigned.

These sequential numbers are used to track new statutes

until they are codified. Below are the outcomes of bills

tracked by Echo in 2021.

2021 LEGISLATION

AB-502 – SUPPORT

STATUS: Approved by Governor October 05, 2021. Filed with Secretary of State October 05, 2021. Chapter 517 AUTHOR: Davies SUBJECT: Election by Acclamation POSITION: Support – Reasonably streamlines the election process and saves money for HOA SUMMARY: This bill would allow common-interest developments of any size to vote by acclamation. It would delete the requirement that the association include 6,000 or more units. And it would specify that this acclamation procedure applies notwithstanding any contrary provision in the governing documents of the common-interest development.

SB-391 – SUPPORT

STATUS: Approved by Governor September 23, 2021. Filed with Secretary of State September 23, 2021. Chapter 276 AUTHOR: Min SUBJECT: Meetings and Teleconferencing Procedures During an Emergency POSITION: Support – Sensible solution as learned from the COVID-19 pandemic. SUMMARY: This bill would establish alternative teleconferencing procedures for emergency board meetings or meetings of the members if the common-interest development is in an area affected by a federal, state, or local emergency.

SB-392 – SUPPORT

STATUS: Approved by Governor October 07, 2021. Filed with Secretary of State October 07, 2021. Chapter 640. AUTHOR: Archuleta SUBJECT: Email Delivery of Documents POSITION: Support – Requirement for association to have a website if more than 50 units could be a problem for some. Adds to cost of running the association. SUMMARY: This bill would allow associations to deliver specified documents by email unless a member opts out of email delivery. It requires members to provide their physical or email address annually, among other requirements. And it requires that associations with at least separate interest to maintain a website, with certain exceptions. It specifies that documents posted to the association website would satisfy the general delivery requirement.

SB-432 – SUPPORT

STATUS: Approved by Governor October 07, 2021. Filed with Secretary of State October 07, 2021. Chapter 642. AUTHOR: Wieckowski SUBJECT: Disqualification of candidates due to term limits in governing documents. POSITION: Support SUMMARY: This bill disqualifies termed-out board members of CIDs from running for reelection and requires an individual who is appointed to count and tabulate votes in a CID election to meet specified requirements.

AB-611 – SUPPORT

STATUS: Approved by Governor August 31, 2021. Filed with Secretary of State August 31, 2021. Chapter 151. AUTHOR: Quirk-Silva SUBJECT: Confidential Addresses – Safe at Home Program exception. Assembly Rule 77. POSITION: Support SUMMARY: When an association member is a participant in the Safe at Home program – an address confidentiality program that protects victims of violence, assault, stalking, trafficking, or abuse – this bill would require that the association use their designated substitute address, upon the member’s request. Additionally, it would require that the association withhold or redact information that would reveal the name and address of the Safe at Home participant in specified communications.

AB-1101 – WATCH

STATUS: Approved by Governor September 23, 2021. Filed with Secretary of State September 23, 2021. Chapter 270. AUTHOR: Irwin SUBJECT: Funds Transfers and Insurance POSITION: Watch. AB-1101 has obvious advantages, protecting less engaged communities and especially boards, and clarifying recently passed law. However, Echo continues to have concerns (especially for small associations). The legislation would mandate certain insurances which would add unnecessary or unwanted cost to the administration of the association. Furthermore, the bill would require funds to be invested only in secure and insured accounts. This aspect of the legislation could force a community to lose money if the interest rates received were less than inflation rates. This bill would remove valuable financial tools for association boards. It is better that these limitations be placed in governing documents instead of in law and that the boards be entrusted with managing the association.

On the other hand, AB-1101 would protect communities from poor management and give managing agents of CIDs the leverage to help HOA boards understand their fiduciary responsibilities. And in the unlikely situation of malfeasance or fraud, the legislation has protections and insurance in place to minimize the risk. The bill also addresses some needed technical amendments to existing law. There are several good, clarifying concepts in the bill; however, there are also some significant challenges that have driven us to a “watch” position. SUMMARY: This bill would require that certain association funds be deposited into a bank, savings association, or credit union with specific insurance. It also prohibits transfers of $10,000 or more without prior written approval from the board. And it requires that an association maintain specified coverage for itself and its managing agent or management company.

SB-9 – OPPOSE UNLESS AMENDED

STATUS: Approved by Governor September 16, 2021. Filed with Secretary of State September 16, 2021. Chapter 162. AUTHOR: Atkins, Caballero, Rubio, and Wiener SUBJECT: Land Use: Lot-Splitting and possible requirement for duplexes POSITION: Oppose. This bill could have a major negative impact on communities zoned for singlefamily residences and those with limiting CC&Rs restricting the community to single-family housing only.

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Annual Meeting Notice November 18, 2021 9:00 - 9:15 am

• Approval of 2020 Annual

Meeting Minutes • Election • Financial Review

Location of the meeting: 52 Monte Vista, Laguna Hills, CA. Please RSVP to dzepponi@echo-ca.org if you would like to attend. Proof of vaccination and masks are required.

SUMMARY: This bill would allow lots to be split regardless of HOA governing documents, to make room for additional residents. It would give ministerial (local government) approval of not more than two-unit development (a duplex would be included in this definition). Furthermore, the language in the bill must be clarified to disallow duplexes if governing documents (CC&Rs) of an HOA preclude them. Clarification that the bill is not intended to affect HOAs is needed.

SB-10 – OPPOSE

STATUS: Approved by Governor September 16, 2021. Filed with Secretary of State September 16, 2021. Chapter 163. AUTHOR: Wiener SUBJECT: Planning and Zoning: Housing Development: Density POSITION: Oppose. Allows ministerial increase in housing density despite zoning for 10 units or fewer. It will void language in governing documents limiting development in HOAs. SUMMARY: Authorizes a city or county to pass an ordinance that is not subject to the California Environmental Quality Act (CEQA) to upzone any parcel for up to 10 units of residential density if the parcel is located in a transit-rich area or an urban infill site.

AB-1410 – OPPOSE

STATUS: Failed to become law. Assembly. Rereferred to Housing and Community Development. AUTHOR: Rodriguez SUBJECT: Restrictions on Rules Enforcement POSITION: Oppose – This bill is far-reaching, covers many issues. Not focused enough for good policy. SUMMARY: This bill would prohibit an association from restricting a homeowner’s right to rent or lease their separate interest, or any portion thereof. It would also extend, to the entire separate interest, a homeowner’s right to use their backyard for personal agriculture. It would further require every director and association employee to complete a course in ethics and harassment prevention. And it would prohibit any restrictions on discussions critical of the association. It would also prohibit the association from enforcement actions during certain specified conditions. And finally, it would require specific standards for evidence of rules violations and mandate that evidence be made available to the accused.

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