By: Scott Welker
As the old saying goes, the only things certain in life are death and unnecessary remarks in HOA minutes. Well, that might not be exactly like the original but, for our purposes, it’s close enough. When it comes to minutes, less is more. Details of things that are said at a meeting should only be included in a few, specific instances described in this article. A homeowners association’s minutes are frequently the subject of records requests and litigation and, as such, their contents must prudently document critical information about the meeting but refrain from including unnecessary information that is vulnerable to misinterpretation and could increase the risk of liability for the association.
Even the squeakiest clean associations sue and get sued. Formal meeting minutes are often important evidence in such cases, sometimes used to bolster the HOAs case and sometimes used to weaken it. Before a case goes to trial, the opposing party’s attorney will request the HOA’s minutes and comb through them in search of anything he or she can use against the association and anything that appears to support the opposing party’s theories. Innocent commentary can be misinterpreted so, ideally, the minutes will be limited in scope.
Meeting minutes are not a transcript of a meeting but simply provide a record, usually in outline form, and include information that can be released to HOA members and, potentially, to the public. Good minutes are factual and straightforward. The less fluff, the better. Their primary purpose is to record actions taken by the board – meaning, what matters were voted on and the result of the vote. They are also useful for providing evidentiary support that the board has acted properly and met its fiduciary duties. Keep in mind, though, that the latter can be accomplished with brief, factual minutes void of narration.
In addition to providing an accurate account of decisions or actions taken by the board in a meeting, minutes are also appropriate for documenting board decisions or actions that occur between meetings. State law requires associations to keep a record of all action taken without a meeting. One way to accomplish this is to, at the beginning of each meeting, ratify all action taken without a meeting since the last meeting. Then, rather than relying on a cache of emails that might inadvertently contain privileged information, the association can turn to its minutes for a complete record of actions taken without a meeting.
Typically, board members in attendance are listed near the top of board-meeting minutes. Note that, according to Utah law, board members in attendance will be considered to have assented to all action taken at the meeting unless he or she requests his or her dissent or abstention to be noted in the minutes. If the board member states an abstention or recuses him- or herself due to a conflict of interest, the nature of the conflict should be noted. If the board approves a transaction that presented a conflict with one of its members, it should note the highlights of any discussion it had regarding alternatives, such as other vendors that they could have used instead.
When a board member is subject to indemnification, or compensation for harm or loss, the matter should be treated similarly to conflicts, and the minutes should note whether the board based its decision to indemnify on specific provisions in the association’s governing documents. Further, if the board takes any action regarding compensation of board members, they should ensure that the minutes comply with IRS requirements regarding minutes and executive compensation.
Confidential matters, such as reviewing bids for a contract, problems with a board member, and approval of foreclosure actions may be discussed in an executive session that is closed to the public. Minutes taken in a closed session will be subject to discovery in a lawsuit unless they fall under an exception to the evidence rules such as attorney-client privilege. Arguably, they will also be subject to a valid records request made by any member of the HOA. In most cases, a simple notation in the minutes such as “entered closed session to discuss a personnel matter and delinquent assessments” will have the effect of documenting the board’s appropriate justification for closing the meeting, while avoiding the risk of making sensitive information vulnerable to disclosure.
Another option is to have a separate section in your minutes titled “Closed Session” that lists concise bullets void of names or specifics. Bear in mind that, anything subject to attorney-client privilege can be redacted in litigation and when responding to records requests. However, if you are going to keep a detailed record of matters discussed with an attorney, the best practice is to keep it separate from the minutes, preferably as part of the attorney’s notes. Practically, this eliminates the need to comb through minutes and redact information before turning them over to another party. Legally, it makes it easier to establish that the separate record is protected by the attorney-client privilege.
Outside of attorney’s notes, if a board member or any third party takes notes for the minutes-keeper to later reference, those notes should be destroyed after the minute-keeper reviews them and creates an official draft of the minutes. This practice should be codified in a resolution and/or added to the association’s records retention policy. To that point, it is common and appropriate to only keep in association records a finalized version of the minutes that have been approved at the subsequent meeting. All prior drafts should be promptly destroyed, which policy should also be codified. The final draft of the minutes reflects a document that a majority of the Board has approved as an accurate reflection of what took place at the meeting. It can be confusing and misleading for preliminary drafts and notes that only reflect the observations of one person to remain part of the record.
Sample Meeting Minute Format
The following is a list of elements to include in meeting minutes. The meeting format may be provided as an agenda in advance of a meeting. Agendas are a great way to cover all the actions which need to be discussed at the meeting and also assist the attendees in allotting meeting time appropriately.
Include the name of the association, name of meeting, date meeting is held
- Call to Order
List name of officer who calls a meeting to order, where and at what time.
- Roll Call
List board members’ names and titles.
Also list others present, such as the members, HOA manager, and association attorney.
- Open Forum
State that the meeting was open for comments from its members. There is no need to document who spoke or what they said.
- Approval of Minutes
Note approval of meeting minutes from a previous meeting (list date of meeting).
List who provided reports and on what topics. For instance: “Management report provided by property manager; Financial report provided by treasurer.” The full report can be included as an addendum to the minutes.
List in separate bullets each item that was brought to a vote and the result of the vote. There is usually no need to state who voted which way except in special circumstances such as when a conflict of interest is at issue.
- Next Meeting Date
List when and where the next meeting is scheduled to take place.
III. Executive Session Summary
Include a very brief summary of items covered in the executive session. For example:
- Discussed lawsuit against HOA
- Discussed ongoing contract negotiations with vendor
- Discussed assessments delinquencies
Scott Welker practices law at Vial Fotheringham, LLP, a firm that focuses on community association law.
List of Utah Statutes Governing Meeting Minutes
- § 16-6a-102: provides that the secretary is responsible for the preparation and maintenance of the minutes (but, the task may be delegated to another pursuant to § 16-6a-818(3));
- § 16-6a-705: indicates that, if a member waives notice of a meeting, the waiver should be included in the minutes;
- § 16-6a-816: provides that, if a board member is present at a board meeting, he or she is considered to have assented to all action taken at the meeting unless he or she requests for his or her dissent or abstention to be noted in the minutes;
- § 16-6a-818: requires that the board or bylaws appoint somebody to be responsible for preparing and maintaining minutes;
- § 16-6a-1601: requires that minutes be kept as part of the association’s permanent records and indicates that minutes must be taken for every meeting (including executive sessions);
- § 57-8-17/§ 57-8a-227: requires associations to make the most recently approved minutes available to members within 5 days upon request.