An executive session board meeting is sometimes necessary to discuss sensitive matters. Still, the idea of a closed meeting can ruffle some feathers, especially when the board fails to educate owners about it. In Maryland, board members must adhere to a few requirements to ensure that closed meetings remain legal.
What is an Executive Session Board Meeting?
An executive session is simply a closed board meeting. At this meeting, board members discuss confidential or private matters critical to the association’s operations.
Board meetings are typically open to all homeowners. In fact, many state laws and governing documents require open board meetings. In Maryland, Section 11B-111 states that board meetings, membership meetings, and committee meetings must be open to all members and their agents.
Is an HOA Executive Session Legal?
Whether an association has the authority to hold an executive session of the HOA board depends on two things: state law and the governing documents. Boards should check these two areas first before scheduling a closed meeting.
In Maryland, both the Homeowners Association Act and the Condominium Act allow executive sessions for specific reasons. Section 11B-111 (for HOAs) and Section 11-109.1 (for condos) are clear on this.
If state laws are silent, associations must refer to their bylaws. The bylaws will usually spell out the requirements for closed meetings, if any. Sometimes, the bylaws also don’t address executive sessions. In this case, it is best for the board to amend the bylaws to allow closed meetings.
What are Valid Executive Session Reasons?
Board members don’t have unlimited authority over closed meetings. In fact, most state laws are clear on when executive sessions should be used.
In Maryland, the executive session topics below permit the board to meet in private under Section 11B-111 (for HOAs) and Section 11-109.1 (for condos).
- Personnel Issues. The board may meet in a closed meeting to discuss employee or staffing concerns.
- Privacy Protection. If the board wishes to protect someone’s privacy or reputation, it may convene in a closed session.
- Correspondence With Lawyer. Speaking to the association’s attorney about legal matters can also warrant an executive meeting.
- Lawsuits. Lawsuits can be very sensitive, especially ongoing ones. If the board must discuss pending or potential legal issues, it may do so in closed session.
- Potential Criminal Investigations. Criminal investigations are often confidential. If the board is looking into possible crimes, it may discuss the investigation at a closed meeting.
- Negotiations. Contract negotiations and business deals may take place in executive session to avoid financial harm to the association.
- Meeting Confidentiality Requirements. If the law requires confidentiality for a certain matter, the board may discuss it privately.
- Owner Account Reviews. When reviewing individual owner accounts, such as unpaid dues or violations, the board can convene in executive session.
Why Can’t Homeowners Attend Executive Sessions?
Homeowners may wonder why the board even needs to meet in private. If something affects the association, shouldn’t all members be privy to the information?
Not necessarily. There are some matters that should be discussed only in a closed meeting. Privacy concerns, for instance, often involve specific people. If these discussions were to take place in public, it could expose personal or financial details.
Legal strategies also usually require confidentiality. When the board talks to its attorney about lawsuits or disputes, those conversations are protected. If a homeowner sits in, that protection can be compromised. It can also weaken the association’s legal position.
Moreover, negotiations demand discretion. The board often negotiates contracts, settlements, and vendor pricing. If the board shares this information openly, it can hurt the HOA’s bargaining power, thereby increasing costs.
By convening in an executive session board meeting, leaders can protect the HOA against legal risks. Discussing a sensitive matter, such as a personnel issue or an owner’s delinquency, could lead to defamation or privacy claims.
So, while closed meetings may not be popular, homeowners must understand that they are sometimes necessary. On their part, board members should educate owners on what executive sessions are and when they take place. It is also imperative to only use closed meetings when permitted. Using them for improper reasons could damage trust and credibility.
HOA Executive Session Rules in Maryland
In Maryland, Section 11B-111 (for HOAs) and Section 11-109.1 (for condos) set strict requirements for meetings in a board executive session. Adhering to these rules is integral, as noncompliance could invalidate decisions and expose the association to legal liability.
Allowed Topics Only
Board members must discuss only the topics allowed under Maryland law. Anything outside of this list must be discussed at an open board meeting.
No Action on Unrelated Matters
Board members must never take action on matters that aren’t relevant to the permitted topics. Doing so can render these decisions void.
Executive Session Minutes Required
Even if the board meets in executive session, minutes must still be taken. The board must record key details in the next meeting minutes, including:
- When and where the closed meeting happened,
- Why was it closed, and
- How each board member voted to close it.
The minutes don’t have to reflect detailed information. Board members can use general language without going into specifics or identifying key persons involved. This helps protect the association from legal issues.
Legal Agreements Open
For condominiums, even if the board discussed something in private, it can’t hide the terms of a legal agreement from the owners. This means that conversations can take place behind closed doors, but owners can still review or inspect final or executed legal deals, such as vendor contracts.
Seeking Professional Assistance
It is not always easy to navigate an executive session board meeting, especially for volunteer leaders. Boards often don’t know what can be discussed in a closed session or what rules to follow. Hiring an HOA management company can ease this burden, as managers can schedule and organize meetings in accordance with statutory requirements and bylaws.
Majerle Management, Inc. provides management services to HOAs and condo associations in Maryland. Call us today at (301) 220-1850 or contact us online to get started!
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