Every now and then, the board will have to meet in an HOA executive session, a closed-door meeting that owners can’t join. This type of meeting, while permitted, can cause problems for boards if they hold them without the authority to do so. To avoid claims of mismanagement or impropriety, association boards must learn to navigate closed meetings legally.
What is an HOA Executive Session?
Homeowners might have noticed that board members sometimes adjourn into executive session in HOA meetings. But what is an executive session anyway?
An HOA executive session is simply a closed board meeting. Most state laws and governing documents require associations to hold open board meetings and invite all homeowners to attend. This applies to both condos and HOAs.
Yet, many associations are also permitted to hold a portion of the meeting in closed session. During this executive session, board members discuss private, sensitive, or confidential matters.
Is an HOA Executive Session Legal in Illinois?
In Illinois, 765 ILCS 160/1-40 states that board meetings must generally be open to homeowners. The board must provide notice of such meetings at least 48 hours prior. That said, the same law allows boards to go into a private session to discuss certain sensitive topics.
As per the law, executive session reasons include discussions on:
- Lawsuits or possible lawsuits involving the association,
- Contracts with vendors or service providers,
- Hiring, firing, or evaluating employees or contractors,
- Interviewing potential vendors or employees,
- Rule violations by owners or residents,
- An owner’s unpaid assessments or delinquent account, and
- Legal advice from the HOA’s attorney.
Homeowners have a right to attend open board meetings. The board can’t routinely meet in secret. At the same time, the above situations can’t be discussed in front of everyone, as it would not be appropriate. In those cases, the board may close part of the meeting or hold a separate private discussion.
Of course, there is one important limitation. The board can’t take the final vote in private. If the board needs to approve something, the vote must take place in the open portion of the meeting, where homeowners are allowed to attend.
How to Maintain Confidentiality Without Destroying Trust
Closed meetings allow the board to protect confidentiality and privacy, but they can also diminish homeowner trust. Board members must know how to balance both in order to fulfill their fiduciary duties, keep residents informed, and maintain harmony.
Adopt Executive Session Board Meeting Rules
Association boards can maintain confidentiality while preserving trust by implementing HOA executive session rules. These rules hold board members accountable and keep processes standardized.
A good rule to have, for instance, is to notify homeowners that an executive session will take place. Include this information in the open board meeting notice. If the board intends to hold a separate closed meeting, notifying owners keeps them in the loop.
Additionally, the board can let owners know what the agenda items are for the closed meeting. Since sensitive matters are involved, the board should disclose the agenda only in general or broad terms. Do not go into specifics.
Take HOA Executive Session Minutes
Meeting minutes not only support accountability, but they also serve as a reference or record of actions. Board members can use them as a reminder or guide for future decisions. On the other hand, homeowners can review minutes to stay informed on community affairs and keep boards in check.
Executive session minutes are usually separate from the open board meeting minutes. They are more detailed but not open to inspection or copying by homeowners.
That said, it is still a good idea to summarize actions or discussions that took place and include them in the open board meeting minutes. Of course, boards should be careful to use general terms.
Don’t be specific or revealing. For example, if the board discussed a rule violation, the minutes shouldn’t include the owner’s name.
Votes must take place at the open meeting, as per Illinois law. Because of this, the open board meeting minutes must reflect these votes.
Hold Open Board Meetings Regularly
Barring any extenuating circumstances, closed meetings should not occur too frequently. If a board holds too many executive sessions, it might raise questions and challenges from homeowners. The same result is likely if the board holds too few open meetings or none at all.
Failure to hold open meetings or invite owners to board meetings can make it look like the board is up to no good. It can make it seem as if the board is hiding something from homeowners, making decisions behind closed doors rather than in full view of residents. The law is clear about what decisions must be made at open meetings.
Educate and Inform Homeowners
Sometimes, it’s only a matter of education. Homeowners may not be aware that boards may go into executive session. They may not know that certain topics warrant a closed meeting.
Educating homeowners on executive sessions and their purpose is a good way to avoid disputes later on. Let them know why closed meetings happen and when they happen. Most conflicts can be resolved with a simple conversation.
Beyond that, association boards must strive to keep homeowners informed. Without going into detail, board members can summarize outcomes of closed meetings and report them to homeowners. For example, the board can simply state that a rule-violation case has been settled or that a vendor contract has been approved.
Only When Necessary
An HOA executive session plays an essential role in community operations. Boards use them to discuss sensitive or private topics that owners must not know, but overuse can destroy trust and credibility. Board members must enter executive session only when there is a valid reason, and still vote on matters at open meetings.
Hillcrest offers HOA management services to communities in Chicago. Call us today at 630-627-3303 or contact us online to request a proposal!
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