Over the past week, I have had several association presidents contact me to ask if it is permissible for directors to socialize outside of Board meetings. On one case, the president and two new directors have been close friends for over a decade, and meet for lunch monthly. In another, the Board wanted to host a potluck dinner for the directors so they could get to know one another, since there were many new faces this year. In a third, a director wanted to invite the other directors to his annual post-holiday wine and cheese party. All three said, in one form or another, “I know we can’t have closed Board meetings, but I’d still like to be able to gather with my friends/fellow directors from time to time. Did I give up my right to socialize with whomever I choose when I was elected to the Board?” The short answer is “no,” but the short answer rarely tells the whole story.
Open Meeting Requirement under MCIOA
Associations governed by Minnesota Statutes Chapter 515B, commonly known as the Minnesota Common Interest Ownership Act (MCIOA), are required to allow homeowners to attend all Board meetings, except in certain limited circumstances. (See Minn. Stat. Section 515B.3-103(g).) Any time a quorum of directors meets (in person or otherwise) and discusses Association business, that’s a meeting. Owners should be notified of that meeting and be permitted to attend. (Note, however, that a failure to give owners notice of the meeting does not invalidate the meeting or any action taken at the meeting.)
Associations that are not governed by MCIOA will need to consult their governing documents. Many non-MCIOA associations’ Bylaws include open meeting language similar, if not identical, to the language of MCIOA.
Gathering with Friends
In each of the conversations I had with these leaders, they were adamant that no Association business is discussed: “We mostly talk about our grandchildren and our next vacation destination.” “I just want to foster a good working relationship on the Board.” “It seems rude not to invite people I’ve invited in past years just because we are now on the Board.”
Under these circumstances, Board members may socialize together. However, just as we have designated drivers who ensure everyone gets safely home after a night of celebration, there should be at least one “designated director.” The primary purpose of the designated director is to ensure that there is in fact no Association business discussed. If someone brings up anything to do with Association operations, the designated director must remind the others of their promise not to discuss Association business. “Association business” should be broadly defined to include even such comments as
- “Did you happen to see the inside of Marilyn’s garage? It filled floor to ceiling with boxes. I wonder what’s in them.” (Using a garage exclusively for storage might be a violation of the governing documents.)
- “What’s going on at Bruce and Judy’s house? I hear them shouting at each all the way across the cul-de-sac.” (Excessive noise may be a violation of the governing documents.)
- “The Petersons’ new front door is so ugly! Did the Architectural Committee really approve that??” (Most changes to the exterior of a home require approval of the Board or architectural committee, so a door that seems out of sync with the rest of the community may not have been approved, which might be a violation of the governing documents.)
Here are some suggestions directors may want to keep in mind as they gather:
- Don’t mix business with pleasure. Enjoy a glass of wine or burger and fries with your fellow directors. Just don’t talk business!
- Avoid “working dinners,” unless you intend to invite all of the homeowners to join you.
- Save the alcohol until after you’ve concluded the Board meeting.
- Keep social gatherings and Board meetings separate. Having a social event immediately after a Board meeting may be convenient, but it is then more likely that Association business is discussed during the socializing. At the very least, separate the spaces: Hold the meeting in a public space, and then travel to the host’s home for the social event.
- Don’t use Association funds to pay any expenses related to these social occasions. Directors may be reimbursed for out-of-pocket expenses related to Association business only (e.g., copy charges for agendas, notices, etc.; postage for Association mailings; snacks/treats for annual meeting; etc.). When in doubt, err on the side of not reimbursing the expense.
- Be transparent with homeowners. If it’s common for directors to socialize—particularly if the group socializing constitutes a quorum—consider adopting a statement (i) acknowledging that there is no prohibition on directors socializing, provided no Association business is discussed; (ii) outlining the procedures the Board has put in place to ensure no Association business is discussed (e.g., designated directors), and (iii) promising that, if procedures fail and Association business is discussed outside a Board meeting, those matters will be added to the next meeting’s agenda, and the discussions held outside the meeting will be discussed at the meeting (not merely summarized), and any decisions made outside a meeting will be revisited.
Serving on the Board of Directors can be a thankless job. There’s no reason such service should require any director to forego socializing with other directors so long as they are on the Board. However, they must be ever-mindful of the importance of avoiding discussion of any Association business during those social occasion. Keeping business and pleasure separate is a good way to avoid controversy about allegations that the Board is making decisions outside meetings.
If you have questions regarding open meeting requirements, or any other questions or issues related to community association, please feel free to contact Nancy Polomis at [email protected] or 952-746-2105.