An illegal HOA board meeting can lead to several consequences, including overturned decisions and a loss of trust. To avoid this, boards must first understand what counts as an illegal board meeting. Factors can vary depending on state laws and the governing documents.
How to Avoid an Illegal HOA Board Meeting in Texas
Board meetings play an important role in ensuring seamless operations. These meetings are where board members discuss community matters and vote on decisions. But the board can’t just meet up at a restaurant and call it a meeting. There are certain rules that must be followed.
To hold a legal HOA board meeting, the board must accomplish the following:
1. Send Proper Notice
Texas law requires associations to notify homeowners of the meeting. This written notice must include the date, time, and location of the meeting. It should also outline the general subject of the meeting and a general description of topics in the executive session.
Associations must deliver this notice in one of two ways:
- Via mail, at least 10 to 60 days before the meeting, or
- Through posted and electronic notice, at least 144 hours before a regular meeting and at least 72 hours before a special meeting.
If the board goes with the second option, it must post the notice on the association property or the community website. The board must also send it via email to owners who registered an email address with the HOA.
2. Invite All Homeowners
Section 209.0051 of the Texas Property Code requires regular and special board meetings to be open to all homeowners. Given this requirement, boards must ensure owners have the option to exercise this right.
That said, closed board meetings are allowed. These are known as executive sessions. Only certain items may be discussed or voted on at these closed meetings.
3. Pick the Right Location
According to the same Texas law, board meetings must take place in either the association’s county of residence or an adjacent county. This ensures that owners may easily travel to the meeting location.
4. Establish a Quorum
A quorum is the minimum number of voting members that must be present at the meeting for business to proceed. Board meetings only require a quorum of board members, unlike annual meetings, which require a quorum of all members.
If not enough board members attend the meeting, votes may not be taken. Choosing to continue with decisions, votes, and actions despite the lack of a quorum can result in an illegal HOA board meeting.
5. Follow the Agenda
Board meetings must follow an established agenda, typically distributed with the meeting notice. If the board strays from the agenda, it may invalidate the decisions made. To avoid this, the board must stay on topic and table any concerns outside the agenda.
6. Be Wary of Taking Actions Outside Meetings
According to Texas law, the board may act outside a meeting only if each board member has a reasonable opportunity to discuss and vote. That said, the board must summarize these actions verbally at the next meeting. The minutes must also reflect them and include any explanation of approved expenditures.
There are plenty more actions that boards may not take outside a meeting. Any votes or actions on the following topics must take place in a properly noticed open meeting:
- Fines
- Damage assessments
- Foreclosure actions
- Enforcement actions (except emergency situations)
- Assessment increases
- Special assessments
- Architectural appeals
- Suspension of an owner’s rights
- Borrowing or lending money
- Adoption or amendment of governing documents
- Annual budget approval or amendment
- Sale or purchase of real property
- Filling a board vacancy
- Construction of new capital improvements
- Election of officers
7. Take Meeting Minutes
Texas law requires associations to take minutes of board meetings. Homeowners also have a right to inspect or copy approved meeting minutes, but they must submit a written request.
8. Adhere to Executive Session Rules
Board members may enter an executive session, a closed meeting, to discuss certain items. These include:
- Personnel matters
- Pending or threatened litigation
- Contract negotiations
- Enforcement actions
- Confidential communications with the HOA attorney
- Privacy matters involving individual owners
- Confidential issues requested by affected parties and agreed to by the board
After the executive session, the board must summarize its decisions in general terms. Be careful not to give away any confidential, sensitive, or private information, such as homeowner names. The meeting minutes must reflect this general summary.
9. Follow Electronic Meeting Requirements
Meetings don’t always have to take place in person. Associations may hold electronic meetings, but there are certain conditions. These include:
- Every board member must be able to hear and speak with one another.
- Owners who attend the meeting must be able to hear the board members (except in executive session).
- Owners may listen in on the meeting using the same communication methods as the board members.
- The meeting notice must include the instructions for owners to access the electronic meeting.
Failure to follow these requirements can render the board meeting invalid.
Consequences of an Illegal HOA Board Meeting
Some boards may be tempted to skip crucial requirements or procedures out of laziness or neglect. But this can lead to a number of potential consequences. Here’s what can happen if directors hold illegal HOA board meetings.
- Overturned Decisions. Homeowners may challenge any decisions the board made at an improperly held meeting. For example, if the board doesn’t have a quorum yet approved plans for a new project, that approval may become null and void. The board would have to hold another meeting, this time following all requirements, to vote on the same project.
- Fines and Legal Damages. Texas law is rather specific about how board meetings must go. If an association defies these rules, it may face liability and even financial penalties.
- Legal Action. Homeowners may file a lawsuit against the association for failing to conduct proper meetings. Board members may even be personally liable if they breach their fiduciary duties.
- Board Member Removal. Homeowners may petition to forcibly remove a board member or two for consistently violating board meeting rules.
- Damaged Trust. When boards fail to follow proper procedure, homeowners will quickly lose faith in their judgment. Decisions will be constantly questioned or challenged.
Prevention Over Cure
An illegal HOA board meeting presents several problems and legal risks, not all of which board members are ready to face. It is best to avoid holding an illegal meeting in the first place rather than to deal with the repercussions after the fact. Rules exist for a reason; in this case, they protect the rights of owners and the best interests of the association.
Graham Management offers exceptional HOA management services to Houston communities. Call us today at (713) 334-8000, request a proposal, or contact us online to learn more!
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