Executive Session: Lifting the Veil of Secrecy
The use of executive session is often a confusing and misunderstood function of a community association board’s powers. We commonly see both over and under use of this privilege by well intentioned, but misinformed, boards. The law differs between Washington and Oregon.
In Oregon, both the Condominium Act and Planned Community Act mirror one another and expressly address executive session in the following manner:
All meetings of the board of directors of the association shall be open to owners, except that at the discretion of the board, the board may close the meeting to owners other than board members and meet in executive session to:
(A) Consult with legal counsel.
(B) Consider the following:
(i) Personnel matters, including salary negotiations and employee discipline;
(ii) Negotiation of contracts with third parties; or
(iii) Collection of unpaid assessments.
ORS 100.420(1)( a) (Condo Act); ORS 94.640(8)(a) (Planned Community Act). Note that subsections (A) and (B) are distinct, meaning that executive session can occur when a board consults with legal counsel or considers the three enumerated issues (with or without legal counsel present).
In Washington, there is no requirement under the Washington Condominium Act or Horizontal Property Regimes Act for condominium boards to meet in open; though, we highly recommend they do so. Thus, there is no reference to executive session in either statute.
For Washington HOAs, under the Washington Homeowners Association Act:
Upon the affirmative vote in open meeting to assemble in closed session, the board of directors may convene in closed executive session to consider personnel matters; consult with legal counsel or consider communications with legal counsel; and discuss likely or pending litigation, matters involving possible violations of the governing documents of the association, and matters involving the possible liability of an owner to the association. RCW 64.38.035(2). The statute goes on to describe procedures for conducting business under executive session that are discussed further below.
Now that we’ve covered what the law says, there are some practical suggestions for community association boards to follow when utilizing executive session (regardless of type of community or state where they reside).
1. Boards should use executive session in a consistent and uniform manner, that is, avoid varying its use depending upon which owner they are dealing with.
2. Executive session should not be used as an avoidance tactic. Boards should not convene or threaten to convene in executive session every time a controversial or contentious issue arises. The issues upon which a board can legally enter executive session are stated expressly within the statute applicable to their association, and the statutes can be used as guidelines for all communities.
3. The Washington Homeowners Association Act provides strict procedures when utilizing executive session that are recommended for all boards—condo or HOA, Washington or Oregon:
The board chair should entertain a motion to enter executive session that shall state specifically the purpose for the closed session.
Reference to the motion and the stated purpose for the closed session shall be included in the minutes.
The board of directors shall restrict the consideration of matters during the closed portions of meetings only to those purposes specifically exempted and stated in the motion.
No motion, or other action adopted, passed, or agreed to in closed session may become effective unless the board of directors, following the closed session, reconvenes in open meeting and votes in the open meeting on such motion, or other action which is reasonably identified.
4. If minutes are taken during executive session, they should be marked as “Privileged” and maintained in the same manner as other confidential documents, i.e., not available for disclosure to homeowners or third parties absent court order or extraordinary circumstances.
When used appropriately and discriminately, executive session can be an effective, and essential, tool for community association boards. Proper procedures are paramount in maintaining the integrity of a board’s decision making process. Do not hesitate to contact the team at Barker Martin if you have any questions relating to executive session, or any related topic.