Matt Humphrey in Board Operations
"That's a real sticky wicket," says Elizabeth White, a shareholder and the head of the community associations practice at the law firm LeClairRyan in Williamsburg, Va. The simple answer is that your state law may dictate that you make minutes available to shareholders and unit-owners within a certain amount of time, and that may mean that you need to distribute draft minutes.
That should be no problem for boards that meet and approve minutes monthly. But if your board meets quarterly, the issue becomes more complicated.
"In most states, owners are entitled to that information regardless of whether the board has had its next meeting or not," explains Duane McPherson, the San Rafael, Calif.-based division president at RealManage, an association management firm that oversees properties in seven states. "If boards meet monthly, sending draft minutes isn't usually necessary because minutes are approved the next month. So most of the time, owners have access to the minutes within 30 days, and that works just fine.
"But some boards meet quarterly and don't approve meeting minutes until the next quarter, and owners are still allowed to get those minutes," adds McPherson. "So you've got to have the ability to send them in a draft form to those who request them, and we've done that. The biggest question then is determining when to send the minutes out in draft form."
If you must produce draft minutes for your members, be sure they're identified as such. "A 'draft' stamp or a box at the top of the minutes that says, 'Draft; hasn't been adopted by the board' is really prudent," says White.
What Not to Include
While you may need to send draft minutes to co-op shareholders and condo unit-owners, you need to be careful not to send drafts that contain information that opens your building to liability or communicates the wrong message to residents.
"When you have hot-issue items, you want to make sure everything that goes into meeting packages is suitable for viewing by the entire membership so they won't get wrong or privileged information," explains White, "and the minutes fall into that category."
Unfortunately, that can happen when minutes haven't been reviewed and approved by the board.
"You want the person who's drafting the minutes to have an understanding of what should and shouldn't go in minutes," says White. Boards, she says, "shouldn't be doing narrative style minutes," and when you remove the narrative prose, "there shouldn't be a whole lot in those minutes."
Do resolution-style minutes, she advises. "If you're doing resolution-style minutes, which cover only the resolutions proposed and the board's action on them, the secretary shouldn't have all that difficulty producing draft minutes."
Warren also believes too-detailed minutes can cause problems for boards because minutes aren't a good way to communicate with residents.
"To protect the corporation, the minutes should be drafted in a deliberate and specific way, and those don't always tell [residents] why something happened," says Debra A. Warren, principal of Cinnabar Consulting in San Rafael, Calif., which provides training and others services to community and homeowner association board members. While she believes it is a good idea to make draft minutes available to shareholders and unit-owners, she also says that "minutes are generally not the best communication vehicle. Boards should have other ways of communicating with [residents] and not make the meeting minutes do that for them."
There can sometimes be conflicts among board members over how much information should be included in minutes. But you should stick to your guns about making sure minutes contain only actions taken by the board. "At one association, we had a problem over what to include in the minutes, and it was a major education effort," says White. "There's still a small faction of owners who say there's a dictatorship mentality and that the board doesn't want to the membership to know going on. But that's what [open] meetings and the newsletter are for," she notes.
"If your goal is to impart information," she says, "that's not what minutes are for. All that matters in minutes is the action the board ultimately took."
Matt Humphrey is president of the Alameda, California-based HOAleader.com, from which this article was adapted. A journalist and entrepreneur, he is a graduate of the Wharton School.
Illustration by Danny Hellman
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