(For Townhomes and Subdivisions. This does not apply to condominiums).
With the advent of the new laws relating to open board meetings, managers and directors have been struggling to find a practical way to comply. Now that most board meetings must be open to the owners and the board must hold meetings to vote on certain association issues, boards are raising unique questions related to options on compliance. There has been much buzz about the possibility of electronic meetings—“webinars”—to satisfy the open meeting requirement. However, electronic meetings should not be considered the panacea they were once proclaimed...
Section 209.0051 of the Texas Property Code regarding open meetings is poorly written, grammatically incorrect, and is subject to at least two possible interpretations with respect to electronic meetings. Subsection (h) thereto pertains to electronic meetings and states, in
relevant part, as follows:
A board may meet by any method of communication, including electronic and telephonic, without prior notice to owners under Subsection (e), if each director may hear and be heard by every other director, or the board may take action by unanimous written consent to consider routine and administrative matters or a reasonably unforeseen emergency . . . [emphasis added].
Under the first, and more conservative, interpretation, electronic meetings may only be used for routine, administrative and emergency matters. Nowhere else in Section 209.0051 is a board granted the authority to meet electronically, so electronic meetings should be treated like unanimous consent and used only for routine or emergency matters. Under the second and more liberal interpretation, if the owners are provided notice of the meeting, the board may meet electronically (webcast) and still have the meeting qualify as an open meeting. Subsection (h) relates to the subject matter that may be discussed at a meeting where the owners have not been provided notice of the meeting and arguably is not a limitation on the use of electronic meetings as a whole.
Section 209.0051 became effective January 1, 2012; it is too early to have received any guidance from any court. Using electronic meetings for anything other than routine and emergency matters is risky, as a court may adopt the conservative view and find that such meetings are not “open meetings” and violate the intent of the statute.
Even if electronic meetings (webcasts) constitute open meetings and can be used for issues other than routine and emergency matters, there are practical matters that should be considered. At a board meeting conducted in person, the board can identify each person attending the meeting. The board is also aware of and can control the recording of any
Further, owners who attend, after being recognized, will have the ability to express a concern over an issue. This gives the board notice and an opportunity to resolve an issue before it matures into a dispute. Owner feedback is important to every board of directors.
With an electronic (webcast) meeting, even if owners can attend only if they have the password, an owner could distribute this information to non-owners, or invite others to attend the meeting on the owner’s computer screen. The board would have no knowledge that an owner’s attorney or even the media is observing the meeting. A disgruntled owner could
make a recording of a meeting and use the recording in future litigation. To safeguard against the risk of an altered recording of the meeting, the board would also need to preserve its own recordings of the meetings. Electronic meetings also bring up the practical issue of whether the board has complied with open meeting requirements if the board is unaware that the feed dies
during the meeting and the board continues to conduct the meeting. And, an electronically conducted meeting (webcast) eliminates owner feedback.
Even if electronic meetings ultimately qualify as open meetings, the inherent risk associated with transmitting the meeting over the Internet should be carefully considered. Absent court cases to interpret the new law, at present, electronic meetings are probably best used for routine and administrative matters where the board does not need to notify the owners of the meeting, or give owners access to the meeting online. Using electronic meetings as “open meetings” is arguably an expansion of the statute—electronic meetings relate to how a board may meet, but do not relate to how the owners may attend a meeting. The authors of this legislation failed to define the phrase “regular and special board meetings must be open to owners.” Until the courts have had an opportunity to take up this issue, it is impossible to accurately predict what constitutes an open meeting.
About the Author:
This article is intended to provide thought-provoking questions. This article is not a legal opinion and should not be used as a substitute for the advice of competent legal counsel.
Riddle and Williams, PC
3710 Rawlins Street
Suite 1400, Regency Plaza
Dallas, TX 75219
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