The Davis-Stirling Common Interest Development Act, found at Civil Code sections 1350 et seq., governs common interest developments. Civil Code section 1363.05(b) provides that “[a]ny member of the association may attend meetings of the board of directors of the association . . . .” Subdivision (h) of that section provides that “[t]he board of directors of the association shall permit any member of the association to speak at any meeting of the association or the board of directors, except for meetings of the board held in executive session.”
An associations governing documents — typically their Articles, Covenants, Conditions, and Restrictions (CC&Rs), and By-Laws — define who qualifies as a member. They also address both the rights of members and their right to participate at meetings of the board of directors. It is therefore always necessary to refer to the governing documents to determine the rights of members to participate at meetings of the board. Generally, most governing documents define “member” as an “owner” in fee simple of an individual lot or unit. Other common provisions are that: 1) an owner only remains a member so long as that member has an ownership interest; and, 2) that a member’s ownership interest may not be transferred, encumbered, or alienated except by a change in ownership.
Many governing documents of associations also have a “good standing” requirement, i.e., that only members whose dues and assessments are current are considered members in good standing and that only members in good standing have all the rights of membership — including the right to vote on measures submitted to the membership, to serve on a committee, and the right to serve as an officer or director. Other common provisions, consistent with Civil Code section 1363.05(b) quoted above, provide that only members may attend open board meetings. Open board meetings are those where participation is not restricted to board members.
In SB Liberty v. Isla Verde Association the issue was whether SB Liberty, a limited liability company and owner and member of the Association, was entitled to have its attorney attend and participate in open board meetings on behalf of SB Liberty as its representative. The governing documents contained provisions similar to those previously mentioned.
In concluding that SB Liberty’s attorney was not authorized to attend open board meetings on behalf of SB Liberty the court reasoned that under the Beverly-Killea Limited Liability Company Act, Corporations Code section 17000 et seq., the management of the business affairs of a limited liability company is vested in its members unless the articles of organization provide that the company shall be managed by one or more managers. (See, Corporations Code sections 17150 & 17151(a)(7).)
It was undisputed that SB Liberty’s attorney was neither a member nor manager of SB Liberty. Thus, SB Liberty’s attorney was not authorized to manage the business and affairs of SB Liberty. Further, SB Liberty’s members and managers could not delegate management authority to him. In addition, the Associations governing documents and statutory authority specifically prohibited SB Liberty from transferring to its attorney any right arising from SB Liberty’s Association membership except the right to vote by proxy – which right does not include the right to attend and participate in open board meetings.
Finally, the court noted that the board had the authority to determine how to conduct its meetings and therefore the power to prevent a nonmember, such as LB Liberty’s attorney, from attending and participating in those meetings. (See, Corporations Code section 7210; Burt v. Irvine Co. (1964) 224 Cal.App.2d 50.)
The take-away: Generally, only members of common interest development associations have the right to attend meetings. The board of directors has discretion to allow or disallow nonmembers, including representative attorneys of members, from attending and participating when not specifically authorized by the Association’s governing documents.
I consult with clients and accept cases involving common interest development associations regulated by the Davis-Stirling Common Interest Development Act, including those involving the rights and responsibilities of associations and its members. For other types of cases I accept, please scroll my Home and My Practice pages. If you are seeking a legal consultation or representation, please give me a call at 818.971.9409. – Michael Daymude