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Conducting Open Board Meetings In Maryland*
By Brian Bichy
*This article originally appeared in the September 2004 edition of Quorum™, a publication of the Washington Metropolitan Chapter Community Associations Institute.
Board Meetings….why meet at all if we can simply connect to the on-line internet service and send e-mails to my fellow Board members. We are busy people and it is much easier if we can vote on the latest landscape contractor via e-mail. Come to think of it, the entire business of the Board could be run from the President’s home office. The Association would run more efficiently – no questions or comments from the homeowners - and the monthly meetings would last less than an hour. Board members may never have to leave the house anymore.
To some Boards of Directors, such a scenario is appealing. Review several e-mails each month and write a few comments and vote in favor or against a number of action items prepared and distributed via e-mail by the property manager. As the most current technology becomes more widespread, e-mail has become part of everyone’s most basic information (name, address, phone number and e-mail address). Any business card you receive today includes a personal e-mail address. At the workplace, some people may never even speak or see a fellow co-worker, however, they have e-mailed messages back and forth about a project or assignment throughout the day. Due to the access and simplicity of using e-mails, it is tempting for Board members to begin making several decisions each month via e-mail prior to an actual Board meeting. It may start with the property manager contacting the Board President either by e-mail or phone asking if the Board had reviewed the bids for the new pool contract. The President then e-mails the other Board members and soon responses flood the “INBOX” that include comments, questions, and even a vote in favor of “ABC Pool Inc.”. It is so easy to simply hit the “REPLY ALL” button and type your comments to the other Board members.
Notwithstanding the simplicity of the use of technology such as e-mails, Boards of Directors in Maryland must be careful not to run afoul of the open meeting requirements set forth in the Maryland Condominium Act and Maryland Homeowners Association Act. Section 11-109 (c)(6) of the Maryland Condominium Act provides that except as provided in Section 11-109.1, a meeting of a governing body shall be open and held at a time and location as provided in the notice or bylaws. The use of the word “governing body” is a general term and includes not only the Board of Directors, but also any committee meetings, such as the ACC or Covenants Committee. Thus, all meetings of the Board or any committee or other “governing body” must be open to all members of the association. Section 11-109.1 sets forth the specific purposes that a Board meeting may be held in closed session, including: (1) Discussion of matters pertaining to employees and personnel; (2) Protection of the privacy or reputation of individuals in matters not related to the council of unit owners’ business; (3) Consultation with legal counsel; (4) Consultation with staff personnel, consultants, attorneys, or other persons in connection with pending or potential litigation; (5) Investigative proceedings concerning possible or actual criminal misconduct; (6) Complying with a specific constitutional, statutory, or judicially imposed requirement protecting particular proceedings or matters from public disclosure; or (7) On an affirmatively recorded affirmative vote of two-thirds of the board members present, for some other exceptional reason so compelling as to override the general public policy in favor of open meetings.
Similar to the Maryland Condominium Act, Section 11B-111 of the Maryland Homeowners Association Act also requires that all meetings of the homeowners association, including meetings of the board of directors or other governing body of the homeowners association or a committee of the homeowners association, shall be open to all members of the homeowners association or their agents. All members of the homeowners association shall be given reasonable notice of all regularly scheduled open meetings of the homeowners association. Therefore, it is recommended that so long as the meetings of the Board or a committee are held on the same day and time (i.e. third Wednesday at 7:00 p.m.), an annual notice of such meetings should be mailed to each member and/or included in a newsletter, which likely satisfies the notice requirements. However, if a meeting date or time should change, reasonable notice should be provided to the members of such change, i.e. posting a notice to the clubhouse or a frequent place where members may review same. Additionally, if the Association has a community website, notice of the meetings may be posted and any changes to such meetings. However, as not all people may have personal access to the website, some form of written notice should still be utilized (i.e. mailing or posting at the clubhouse or other community facility). The Homeowners Association Act also includes exceptions to the open meeting requirements which are similar to the exceptions included within the Condominium Act and are set forth in Section 11B-111 (4)(i)-(viii). In light of open meeting requirements, if a Board discusses its business via e-mail prior to a regularly scheduled meeting and even makes several decisions via e-mail, such actions are contrary to the open meeting requirements. The primary purpose of the open meeting requirements is to provide the association’s owners an opportunity to observe the Board conduct the association’s business, particularly the discussions between Board members. However, if all the decisions were made prior to the meeting via e-mail, the owners have no such opportunity, and the Board is essentially conducting its business behind closed doors using a computer and e-mail. Of course, there are always situations or circumstances where a decision may be necessary prior to a regular meeting. Many association governing documents include authority of the Board to take action without a meeting upon unanimous written consent. Additionally, ยง 2-408 (c) of the Corporations and Associations article of the Maryland Annotated Code authorizes a Board to also take action without a meeting upon unanimous written consent provided such consent is filed in paper or electronic form with the minutes of the Board meeting. This section was recently amended to specifically allow electronic transmissions to satisfy the written consent requirement. Thus, using such authority, a Board may take action via e-mail so long as there is unanimous consent. Then, during the subsequent open Board meeting, the Board should ratify the prior action and ensure an appropriate record is maintained and also discloses the Board’s action to the owners at the open meeting.
Although a Board may have authority to take action without a meeting, it is only recommended when a Board decision is absolutely necessary, i.e. an emergency exists or a deadline that may cost the association additional monies or costs, and requires a decision prior to the regularly scheduled meeting. If the decision can wait for the regular meeting, this is the more prudent action. E-mails and similar technologies can be useful tools to allow Board members to communicate between meetings with each other and the association’s management agent and other contractors. However, Board members need to understand that e-mail and other communications technology should not be utilized in lieu of holding Board meetings. Not only are open meetings statutorily required in Maryland, it is important to show the owners that the Board is not conducting its business behind closed doors, or in this case, at the home office or the local coffee house with a laptop.
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