A piece of legislation winding its way through Sacramento, AB1738, seeks to override a recent California appellate court decision that allows Boards to prohibit members from bringing legal counsel to Association meetings.
HOA Board meetings may be attended by Association members (excluding proper executive session meetings). However, third parties are not entitled to attend Association meetings. The Board of Directors may exclude non-members from meetings, including but not limited to tenants, homeowner experts, and homeowner legal counsel. These third parties may also be excluded from “Meet and Confer” meetings (Internal Dispute Resolution). Boards of Directors have the authority to determine how to conduct their own meetings, including the exclusion of non-members.
The right of Boards to exclude lawyers representing homeowners from Board meetings was decided in a recent California Court of Appeals case, SB Liberty v. Isla Verde Association ((2013) 217 Cal. App. 4th 272). This case held that a homeowner is not entitled to be represented by legal counsel at Board meetings, and the Board of Directors can exclude said legal counsel from Board meetings. The Court of Appeals specifically found that the Association’s CC&R’s defined “member” as the owner on title for the unit, and the homeowner’s lawyer was not on title. Therefore, the lawyer was not a member and was not entitled to attend meetings. This decision came after the owners in the case tried a creative work-around: The owners transferred their property into a limited liability company (SB Liberty) and executed a power of attorney appointing their lawyer as their agent so he could attend Board meetings and present requests to the Board. This did not work – the Board denied the lawyer access to the meetings. The owners, through SB Liberty, sued the Association, and the Association prevailed at both the trial court and Court of Appeals.
The details of the SB Liberty appellate court decision can be found at the following link:
In response AB1738, authored by State Representative Chau, seeks to overrule this Court of Appeals decision by allowing a homeowner to bring legal counsel to a “Meet and Confer” (IDR) proceeding. It would also allow the homeowner to bring other persons to the IDR proceedings. The troubling part of the proposed bill is that it currently does not contain notice provisions (so that all parties know in advance who will be attending the IDR) and does not contain privilege protections for the proceedings. Since IDR is intended to be an informal process to help resolve a dispute, privilege protections should be included so that any participating party would not have to worry about what is said at these informal proceedings.
The bill, in its current form, is opposed by CAI, CACM and ECHO. However, this bill currently has bi-partisan support, and has just passed out of the Senate Judiciary Committee. This bill will be monitored as it continues through the legislative process in the coming months.