Let the sunshine in. I am not talking about the popular 1969 song by The 5th Dimension. I am referring to the statutes governing Virginia community associations that require all meetings of a board of directors, including any subcommittee or other committee of the board of directors, where the business of the association is discussed or transacted, to be open to all owners of record[1]. These are known as “sunshine laws” and are the rule for community association meetings.
As with most rules, there is an exception – executive session, during which it is permissible to “close” the door, so to speak. Too often in our practice, we are reminded that the permitted reasons and procedure to convene in executive session are not well understood. This article will uncharacteristically shine some light on executive session and examine what it is and how to do it correctly.
Executive session is a portion of an otherwise open meeting, which is closed to the membership and treated as confidential. The statutes provide a detailed roadmap on how to properly convene in executive session, and the limited purposes for which this may be done. I emphasize the word “may” because there is no requirement to convene in executive session. It is permitted for certain, limited topics and there are other reasons why it would be advisable to go into executive session, such as to protect information the disclosure of which would be in violation of law and to preserve attorney-client privilege.
The Virginia Condominium Act (“Condominium Act”) and the Property Owners’ Association Act (“POA Act”) list the specific reasons the Board or any subcommittee or other committee may convene in executive session as follows:
Condominium Act (Va. Code Section 55.1-1949C)
- Consider personnel matters
- Consult with legal counsel
- Discuss and consider contracts, probable or pending litigation, and matters involving violations of the condominium instruments or rules and regulations promulgated pursuant to such condominium instruments for which a unit owner, his family members, tenants, guests, or other invitees are responsible
- Discuss and consider the personal liability of unit owners to the unit owners’ association
POA Act (Va. Code Section 55.1-1816C)
- Consider personnel matters
- Consult with legal counsel
- Discuss and consider contracts, pending or probable litigation, and matters involving violations of the declaration or rules and regulations adopted pursuant to such declaration for which a member or his family members, tenants, guests or other invitees are responsible
- Discuss and consider the personal liability of members to the association
The reasons for which a condominium or property owners’ association Board or committee may convene in executive session are virtually identical, but are limited. The list is notably short and does not include reasons that are commonly believed to be appropriate, but are not. The statutes do not permit the Board or a committee to convene an execute session to prepare the budget, discuss finances, review the reserve study, consider amendments and rule changes, consider exterior modification/architectural requests, review association complaints, and consider policies, although we hear these reasons given all the time. That the subjects may be controversial or difficult does not make them appropriate for executive session. The statutes do permit a closed session to hold due process hearings, consider contract proposals/bids, address an employment issue, review delinquencies, discuss requests for reasonable accommodation or modification that would involve disclosure of protected health information, and discuss a threatened lawsuit, to name a few.
To properly convene in execute session, the Board or committee must be in a duly constituted open meeting. The process commences with a motion stating specifically the permitted purpose(s) for the executive session. The motion must be seconded and approved. Persons who are not members of the board or committee and other persons who are not involved in the stated purpose of the session are then excluded from the executive session. This could mean they are excused from the room or those eligible to be in the executive session move to a different space.
The discussion in executive session must be restricted to the purpose(s) specifically exempted and stated in the motion. No contract, motion, or other action taken in execute session is effective unless, the board or committee following executive session, reconvenes in open session and takes a vote on such contract, motion, or other action, which has its substance reasonably identified in the open meeting. The minutes of the meeting shall include the motion, the stated and permitted purpose for the executive session and the action taken in open meeting. Even if no one other than the Board or committee members and persons permitted to attend the executive session are present, it is important to go through the motions to properly convene an executive session.
Frequently we are asked how much information need be disclosed about the substance or parties involved. The statutes provide that the substance be “reasonably identified”. This may mean that a violation or delinquency case could be given a case number as opposed to identifying an owner/address. Parties bidding on a contract need not be identified nor do any of the terms need to be disclosed. The substance could be to consider roofing proposals, for example. Identifying the purpose as one permitted by the statute, however, is critical.
If a Board or committee is concerned that owners/residents will be discouraged from attending or angered by being excluded from a portion of a meeting, then the meeting notice and agenda can include reference as a “heads up” that at least a portion of the meeting will be closed. This will help manage expectations and is considerate.
The risk in convening in executive session for a purpose other than what the statutes provide or not following the statutorily-mandated procedures, is that any contract, motion or action would be invalid, subjecting the Association to legal challenges and costs. It is a very mechanical, simple process to follow just by reviewing the applicable statute. If you have any questions about executive session, contact your association legal counsel for guidance.
[1] See Va. Code Section 55.1-1816A and Va. Code Section 55.1-1949B.1
