You’ve surely heard that it’s important to be careful about which HOA business you handle through email. But California has taken restrictions on HOA business conducted via email to a new level. Here, an expert explains California’s new anti–email law and provides three examples of never–handle–this–by–email issues.
Know Your State’s Rule on Email
States may have different rules governing the use of email by an HOA board of directors, so be sure you check with your HOA attorney on state–specific regulations you’ll have to follow. California’s, for instance, just got tighter.
“In California, SB 563 just modified a few provisions of the Davis–Stirling act [the shorthand name for the state’s law governing common interest communities],” explains James R. McCormick Jr., a partner at Peters & Freedman LLP in Encinitas, Calif., who represents associations.
Under the new law, boards can almost never take action without a meeting, says McCormick. “The only time they can take action by email is in an emergency, which is defined in the law as any unforeseen circumstance that requires immediate attention,” he explains. “Then the action must be by unanimous consent by the board, and the consent has to be filed with the action and the minutes. The new rules are very anti–email.”
What NOT to Put in Email
California has obviously made it clear that it wants HOA board actions to be transparent. What if your state doesn’t have such specific rules? Here are three smart rules to follow.
1. Address only easy–to–answer issues, and offer no personal opinions.
“Generally, you should be putting in email only yes and no answers to questions, not things like, ‘I hate that guy,’ says McCormick. “Don’t put anything in an email that you don’t want in the 5 p.m. news. It’s discoverable in litigation, and if there’s a lawsuit on any issue, the other side will discover the email, and you’ll be embarrassed.”
2. Don’t assume minor decisions are fair game.
What if a board member proposes purchasing a $59 coupon for a one–hour consultation with a landscaping expert? Is that such a minor expense that it can be approved by the board through email? “You’re not supposed to do that—in California at least,” says McCormick. “The idea is that there has to be an open meeting which owners can attend, and the board has to make its decisions as transparent as possible. If it’s discussing any item of business over which the board has authority, discussions have to take place at a meeting.”
3. Make sure an email discussion doesn’t lapse into an email decision.
“What if the board makes a decision by email, and an owner says, ‘What’s going on? When did you discuss this because I don’t remember any discussion of this at any board meetings,'” explains McCormick.
You may think there’s no harm in making decisions via email because, after all, will an owner sue over email decision making when everyone uses email today? “If the owner sues, the obvious question is what are the damages?” says McCormick. “Well, if the decision was about a $1 million reconstruction contract, there could be significant damages from making the decision improperly.”