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The

Accell Advisor

Legislative Update

SB 563: Board MeetingsBy Ramona Acosta, Director of Public Relations, Accell Property Management, Inc.

and Delegate to CAI-CLAC

2011 was a fairly active year in Sacramento involving homeowners

associations. One of the most significant bills to have passed and take

effect January 1, 2012 is Senate Bill 563, which amends Civil Code

1363.05, commonly known as the Open Meeting Act. We have

summarized the most notable provisions of the Code below; however,

we recommend you consult your Associations legal counsel for a more

in depth analysis.

Board Action Outside of a Meeting Prohibited: The most significant

change to the Open Meeting Act is the deletion of the power of a Board

to make a decision outside of a meeting by unanimous written consent.

Previously, the Corporations Code permitted a Board of Directors to

take action outside of a meeting providing the action was approved by

Unanimous Written Consent. However, most association attorneys

have advised that an action without meeting be reserved for items of an

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W I N T E R 2 0 1 2

SB150: LeasingProhibitions

This new law adds a new Civil

Code Section 1360.2 and makes

three changes:

1. Leasing limitations (i.e.rental caps) or

prohibitions recorded on or

after January 1, 2012, will

only apply to new owners

taking title after that date or to

owners voluntarily accepting the

applicability;

2. The association must add to itsCivil Code 1368 (escrow)

disclosures if there is a limitation

or prohibition on rentals; and

3. Prior to leasing, landlords mustprovide the association the date

they acquired ownership and the

name and contact information

for the tenant.

The net effect of this legislation is that in

order for a lease maximum or

prohibition in a governing document to

apply as to any owner, it must have

been in effect prior to that owner

acquiring title to their separate interest,

unless the owner voluntarily consents.

This new law does not apply to

commercial common interest

developments.

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THE ACCELL ADVISOR WINTER 2012

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Senate Bill 563: Board MeetingsThis meant that the Board could not take action on any

item of business that was not properly noticed on the

posted meeting notice and agenda. SB 563 expands this

definition to a congregation of a majority of themembers of the board, at the same time and place to hear,

discuss or deliberate upon any item of business that is

within the authority of the Board. A common example

would be a majority of the Board, acting as the Landscape

Committee, conducting a landscape walk. This would be

prohibited without proper notice, as the landscape is

within the authority of the Board.

Creates a New Definition of Item of Business: The

Board may resolve the issue of the expanded meeting by

delegating certain tasks and procedures to Management

or Committees. SB 563 creates a definition for an item o

business as any action within the authority of the board

except those actions that the board has validly delegated

to any other person or persons, managing agent, officer of

the association, or committee of the board comprising less

than a majority of the directors. Using the example

above, the Board may delegate matters regarding the

landscape to a Landscape Committee comprised of less

than a majority of the Board. Keeping in mind that any

Committees with decision-making authority must takeminutes, which must be made available to the

membership upon request under Civil Code 1365.2.

Requires Executive Session Meeting Notice & Agenda

Disclosure: SB 563 requires that the Board must now

give members at least two days notice of a meeting, which

is solely held in executive session. As with the regula

meeting, the notice must be posted within a prominent

place in the common area, and include an agenda of the

meeting. This could provide confusion to the

membership, as they will be receiving notice of a meetingfor which they cannot attend. It is recommended that the

Board use caution in drafting the agenda to ensure it

protects the privacy and confidentiality of the matters to

be discussed.

The changes to the Open Meeting Act will have a

significant impact on the way Boards of Directors

conduct business in the future. Should you need

assistance in working through these changes, please

contact your Association Manager or legal counsel.

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emergency nature, that require immediate action, and for

which an emergency meeting of the Board of Directors

could not be noticed and held. SB 563 has codified this

advice by expressly prohibiting actions without meeting

except for emergency situations. This means that some

communities may be required to meet more often,

especially those that are in the practice of meeting bi-

monthly or quarterly.

Allows Emergency Meetings by Email: Currently, the

Open Meeting Act provides that an emergency situation

exits if there are circumstances that could not have been

reasonably foreseen by the board, that require immediate

attention and possible action by the board, and that, of

necessity, make it impracticable to provide notice. SB

563 permits a Board to take action on such emergency

situations via an electronic meeting (email) provided that

the Board unanimously consents in writing to the

electronic meeting. In addition, the Board must

unanimously consent in writing to the action, and the

written consent must be filed with the minutes of the

meeting of the Board.

Allows for Meetings by Teleconference: In addition toemergency meetings by email, SB 563 allows for regular

meetings by teleconference. California law has allowed

Board members to attend meetings via teleconference

provided that all Directors could hear and participate in

the discussion. The new Bill expands the definition of a

meeting to include a teleconference in which a majority

of the Board, in different locations, are connected by

electronic means, through audio or video or both. In

order to conduct a meeting via teleconference, 1) the

meeting notice must provide at least one physical

location at which members may attend the meeting, and

2) at least one Board member must be present in that

location. The additional notice requirement does not

apply to Executive Session or Emergency Meetings.

Expands the Definition of a Meeting: Previously, the

Open Meeting Act defined a meeting as, a congregation

of a majority of the members of the board, at the same

time and place to hear, discuss, or deliberate upon any

item of business scheduled to be heard by the board.