D.C., Maryland and Virginia: Open Meeting Requirements
Takeaway: Open Meeting requirements restrict how and when a Board of Directors may discuss Association business. In general, they require that all meetings, including those of any committee or subcommittee, be open to all members of the Association, but provide a limited set of circumstances where a Board may enter an executive or closed session to discuss certain matters in private.
The biggest issue a Board can run into when dealing with Open Meeting requirements is determining when a “meeting” is actually taking place. If some Board members exchange emails about Association issues, is that a “meeting”? If three directors run into each other in the neighborhood, is that a “meeting”? To answer these questions it is best to look at each jurisdiction’s specific requirements. It is important to note that an Association’s governing documents may also impose additional Open Meeting requirements and should always be reviewed to ensure compliance.
I. District of Columbia - Condos
The District of Columbia recently passed legislation incorporating Open Meeting requirements into the D.C. Condominium Act. D.C. Code §42-1903.03. Currently, D.C. does not have an Act that governs homeowners associations and the D.C. Cooperative Act does not impose Open Meeting requirements.
The D.C. Condominium Act requires that all meetings of a Board of Directors be open to all members of an Association who are in good standing. It also allows the Board to move into an executive session to consider: (1) personnel matters, (2) contracts, leases and other commercial transactions, (3) pending or potential litigation, (4) matters involving state or local administrative or other formal proceedings before a government tribunal for enforcement of the condominium instruments or rules and regulations, (5) consultation with legal counsel, (6) matters involving individual unit owners or members, and (7) for any compelling reason that overrides the public policy of an open meeting as long as it is supported by a two-thirds vote of the Board of Directors.
Pursuant to the D.C. Condo Act, a “meeting” includes a telephone conference, video conference or similar electronic means. So this means a Board could be considered to be “meeting” if they are conversing in some manner over email or telephone conference. Because this is a new statute, there is very little additional guidance as to what constitutes a “meeting.” Accordingly, Boards should take a conservative approach and avoid discussions about Association issues until the Open Meeting requirements are observed.
II. Maryland – Condos and HOAs
Section 11B-111 of the Maryland Homeowners Association Act establishes the Open Meeting requirements for Homeowners Associations in Maryland, and Section 11-109.1of the Maryland Condominium Act provides the same for Condominium Unit Owners Associations. The Maryland Cooperative Housing Corporation Act does not have Open Meeting requirements.
The Open Meeting requirements for condos and HOAs vary slightly, but both require all meetings of the Board of Directors be open to all members of the Association. Both statutes provide for the same set of exceptions allowing a Board to enter a closed session including: (1) discussing personnel matters, (2) for the protection of the privacy or reputation of individuals in matters not related to association business, (3) consulting with legal counsel, (4) discussing pending or potential litigation or other legal matters, (5) investigating possible or actual criminal misconduct, (6) for consideration of the terms or conditions of a business transaction in the negotiation stage, if disclosure could adversely affect the economic interest of the association, (7) complying with any law that requires matters not to be publicly disclosed, and (8) discussing owner assessment accounts.
In Maryland, a recent opinion from the Montgomery County Commission on Common Ownership Communities (“CCOC”) defined the term “meeting.” In the combined cases of McBeth and Muse v. Fountain Hills Community Association, ##52-12 and 67-12 (May 1, 2014), a panel of the CCOC made the following rulings: (1) a “meeting” is a discussion in which action is taken by the Board, (2) a gathering or discussion by the Board for the purpose of solely discussing and not deciding Association business is NOT a “meeting,” and (3) a “meeting” conducted by email, instant messenger, telephone or otherwise not in person is by definition a closed meeting since other members cannot attend.
Although not binding, the CCOC decision draws a clear line for Maryland Boards: as long as the Board is not making a decision, then a meeting has not occurred, and the Open Meeting requirements are not triggered. This means that a Board may discuss Association business, whether in person or by some other means such as email, and it will not constitute a meeting unless an action is taken.
III. Virginia – Condos and HOAs
Section 55-510.1 of the Virginia Property Owners Act establishes the Open Meeting requirements for Homeowners Associations, and Section 55-79.75 of the Virginia Condominium Act provides the same for Condominium Unit Owners Associations. Both code sections provide near identical language in regards to the Open Meeting requirements imposed on Boards. The Virginia Real Estate Cooperative Act does not have Open Meeting requirements.
The acts for condos and HOAs provide that all meetings of a Board of Directors, including the meetings of any committee or subcommittee, be open to all members of the Association. They do allow a Board, however, to enter an executive session to discuss certain matters in private. These matters include: (1) personnel matters, (2) to consult with legal counsel, (3) to discuss and consider contracts, pending and/or probable litigation and matters involving violations of the declaration or rules and regulations, and (4) matters relating to the personal liability of any member to the association.
The Virginia statutes give a broad meaning to the term “meeting” by including “work sessions” and “informal gatherings” within its definition. The question then becomes do emails or running into a fellow board member in the neighborhood constitute work sessions or informal gatherings? Unfortunately, there is no clear-cut answer to this question. In a recent decision by the Supreme Court of Virginia interpreting similar Open Meeting requirements contained in the Freedom of Information Act, the Court determined that emails exchanged in rapid succession on an email thread where a majority of the Board members were included could constitute a “meeting” and violate the Open Meeting requirements. See Hill v. Fairfax Cnty. Sch. Bd., 284 Va. 306, 311, 727 S.E.2d 75, 78 (2012). Accordingly, email communications could in fact constitute a “meeting” in Virginia depending on the discussion.
Given the uncertainty described above, the best approach by a Board would be a cautious approach. A Board is best served to avoid any discussion regarding the Association’s affairs when a majority is present if the Open Meeting requirements have not been observed. The dissemination of information among a Board is likely not a problem, but the discussion of that information could very well be. Therefore, it is best to play it safe and avoid discussions outside of a properly called “meeting.”