What is an executive session? Can associations hold closed-door board meetings? These are questions many condo and HOA boards ask, especially when sensitive topics come up during an open meeting. It is important to understand the rules and requirements concerning executive sessions to avoid liability.
What is an Executive Session?
An executive session is simply an HOA closed meeting. It is the portion of a board meeting that stays private, i.e., only among board members and select representatives.
Board meetings are integral to the day-to-day operations of any association. It is at these meetings that board members execute contracts, discuss projects, and make decisions. While most of what goes on in a board meeting is open for owners to witness, some things must stay confidential and behind closed doors.
Who can Attend HOA Executive Sessions?
Since executive sessions are private, attendance is limited to the board members and a few select people. The board may invite the association’s manager, lawyer, accountant, engineer, or other professional to provide input on a certain topic.
Unit owners are not permitted to enter executive session. This is due to the confidential or sensitive nature of the meeting. Agenda items often include delinquencies, violations, personnel issues, and litigation.
What are the Executive Session Rules in Illinois?
In Illinois, the general rule is that board meetings must be open to all unit owners. This applies to both HOAs (765 ILCS 160/1-40) and condo associations (765 ILCS 605/18).
Owners have a right to attend and observe how the board conducts association business. After all, board decisions affect everyone in the community. These decisions can impact community standards, finances, and operations.
That said, there is an exception to the open meeting rule. Illinois law allows both HOAs and condominiums to hold closed board meetings for specific purposes. And there are only six things that can call for an executive session.
When is an HOA Executive Session Allowed?
According to Illinois law, the board can close part of a properly noticed meeting or hold a separate private meeting, but only for certain topics. This applies to both HOAs (765 ILCS 160/1-40) and condo communities (765 ILCS 605/18).
These topics are as follows:
1. Pending or Likely Lawsuits
An HOA or condo board executive session is permitted if directors wish to discuss ongoing litigation involving the association. The law also allows board members to meet in private if it reasonably believes that a lawsuit is coming their way.
Lawsuits are touchy subjects. Discussing them in open can give away the association’s position and strategies, especially if the other party in the suit is a unit owner.
2. Contracts and Personnel Matters
The board can discuss contracts with vendors or service providers behind closed doors. It can also discuss hiring, appointing, evaluating, or terminating employees, contractors, management companies, agents, or other service providers.
For example, if a particular employee has been behaving badly as of late, the board can meet in executive session to talk about potentially letting them go. That said, the final vote must take place at the open meeting.
3. Interviewing Candidates
As per the law, association boards may meet in private to interview prospective employees, contractors, managers, or vendors. This keeps the selection process reasonably controlled, as public interviews may add pressure.
4. Rule Violations
Alleged violations of the association’s rules or governing documents may also be discussed in executive session. This helps to protect the privacy of the owner who is accused of the violation.
For example, if the board wishes to discuss an owner’s breach of amenity rules and the potential penalties that may follow, they may do so by moving to a closed session.
5. Unpaid Dues and Assessments
Board members may convene in executive session to discuss a specific owner’s delinquent dues, assessments, or other unpaid fees. Again, this is to protect the privacy of the individual involved.
Disclosing the identity of delinquent owners can result in resentment, blame, and blatant hostility from other members. It is also a matter of preserving the reputation of the delinquent owner. Associations shouldn’t resort to humiliating someone just to get them to pay their dues.
6. Legal Advice
According to Illinois law, HOA and condo boards may meet in private to consult the association’s attorney for legal advice.
Can the Board Vote in Private?
While discussions may take place behind closed doors, board members must generally go back to the open meeting to take a vote. According to Illinois law, neither HOAs nor condo associations may vote in an executive session board meeting. Any official votes must occur during the open portion of the meeting where unit owners are allowed to attend and observe.
Conducting votes at open meetings promotes transparency and accountability within the community. When owners get to witness the vote, they can see firsthand which board members voted for or against an issue. At the next election, they can choose to support the leaders whom they believe have the community’s best interests in mind.
Should the Board Take Executive Session Minutes?
Neither the Illinois Condominium Property Act nor the Illinois Common Interest Community Association Act address minutes of closed or executive sessions. They only specify when the board may meet in closed session and that any vote must occur in an open meeting.
Because Illinois law is silent, many associations follow the common practice. This involves recording confidential executive session minutes, but keeping them separately from the regular minutes. The open meeting minutes simply reflect that the board convened in executive session, with the reason stated in general terms. Once the board reenters the open meeting, the minutes will reflect it, too.
Since the board can’t vote behind closed doors, the actual motion and vote should appear in the open meeting minutes. Again, the secretary can use general language to avoid disclosing any private or sensitive information.
What is an Executive Session? Answered!
An executive session is a legal form of a board meeting. Directors use it as a way to discuss confidential issues, such as litigation, violations, and unpaid dues. While owners aren’t privy to the discussions that take place behind closed doors, they may still witness the final vote, which must happen back in open session.
First Community Management provides expert HOA, condo, and co-op management services to communities in Chicago. Call us today at (312) 829 8900 or contact us online to learn more!
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