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Closed Sessions

by Jim Slaughter

Originally published as "Closed Meetings & Community Associations" in the NC Newsletter of the NC Community Associations Institute (CAI)

 

[W]e are as a people, inherently and historically opposed to secret societies, to secret oaths, and to secret proceedings."  Despite this advice from President Kennedy, “secret proceedings” are not uncommon in community associations. Homeowners may be asked to leave for all or parts of board meetings.  At times, boards attempt to conduct business by telephone or e-mail to avoid public scrutiny.

Without question, boards occasionally need to do their business outside of the public eye.  Before doing so, however, it's worth considering two questions: (1) Should you go into closed session? (2) Can you go into closed session?

Should You Go into Closed Session?

Generally, too much secrecy by boards leads to suspicion, distrust, and strife. With that said, why would a board exclude association members from its meetings?  Most often, boards meet in private to avoid having to deal with association members.  Some boards hold closed sessions to discuss controversial issues. In other associations, the board develops an “us versus them” attitude and prefers not to have members watching.  At times boards meet in secret to avoid dealing with an irate homeowner.

These are poor reasons to close a meeting, and most can be resolved without upsetting the entire neighborhood.  For instance, association members generally have no right to participate—make motions or to debate—in board meetings.  As a result, their attendance should not interrupt business.  In the event a homeowner becomes disorderly, that owner can be excluded from the meeting without excluding all association members.

Legitimate reasons for closing a meeting generally concern issues that if discussed in public could violate privacy laws, harm the association, or cause embarrassment to a party.  Valid reasons for going into closed session include:

arrow consulting with legal counsel;
arrow discussing litigation or prospective litigation by or against the association;
arrow reviewing information that is confidential or should not be generally known, such as delinquent dues;
arrow conferring about contracts or real property purchases;
arrow reviewing association employees or personnel issues; or
arrow handling disciplinary matters or rules violations by members.


Can You Go into Closed Session?

A first question is whether state law permits association boards to hold closed meetings.  One NC statute provides that homeowners must be given an opportunity to attend a portion of a board meeting to speak about issues or concerns “at regular intervals.”  Certainly, then, not all board meetings can be closed.  Another statute provides: “Except as otherwise provided in the bylaws, meetings of the association and the executive board shall be conducted in accordance with the most recent edition of Robert's Rules of Order Newly Revised.”  However, Robert’s doesn't care whether board meetings are open or closed.  In fact, there are no general parliamentary prohibitions on closed meetings or what can happen during closed portions.

A better question is how closed meetings are impacted by language in association governing documents.  For instance, the declaration or bylaws may restrict when a board can go into closed session to certain circumstances.  Occasionally, association governing documents will provide that “all board meetings shall be open to association members.”  Generally, such language is too broad in that there are legitimate reasons for a board meeting in closed session.

Associations sometimes attempt to avoid in-person meetings by transacting business through telephone or e-mail.  Beware.  There are statutes dealing with telephonic meetings.  However, decisions made online or by e-mail are usually not official actions and must be ratified at a later meeting.

Conclusion

Closed board sessions should be approached cautiously and with the advice of legal counsel.  Even if permitted by law and the governing documents, the question must still be asked, “Should the meeting be held in private?”  Not much has changed since President Kennedy noted inherent opposition to secret proceedings.  Except for those instances where closed sessions are truly necessary, the controversy and suspicion may not be worth the trouble.

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Articles are intended to provide general information and are not legal advice or a legal opinion. Specific questions should be directed to an attorney at Black, Slaughter & Black, PA., or to another lawyer.