Category Archives: Topic Index

Telephone Wiring

Exclusive Use Common Area  (Maintained by Homeowner)
Regardless of what is stated in an HOA’s CC&Rs, “internal and external telephone wiring designed to serve a single separate interest, but located outside the boundaries of the separate interest, is exclusive use common area allocated exclusively to that separate interest.” (Civ. Code § 4145(c).)  As exclusive use common area, the maintenance and repair of telephone wiring serving a homeowner’s unit is the responsibility of the homeowner, not the association.  (Civ. Code §4775(a).)

Access Rights for Maintenance
Regardless of what is stated in a HOA’s CC&Rs, a homeowner is granted access rights over the common area as needed to maintain the telephone wiring serving the homeowner’s unit:

“Notwithstanding the provisions of the declaration, a member is entitled to reasonable access to the common area for the purpose of maintaining the internal and external telephone wiring made part of the exclusive use common area of the member’s separate interest pursuant to subdivision (c) of Section 4145.” (Civ. Code § 4790.)

Association Approval for Access
When the homeowner needs to access common area in order to maintain the telephone wiring serving his unit, the homeowner may be required to first obtain the HOA’s approval prior to accessing the common area:

“…The access shall be subject to the consent of the association, whose approval shall not be unreasonably withheld, and which may include the association’s approval of telephone wiring upon the exterior of the common area, and other conditions as the association determines reasonable.” (Civ. Code § 4790.)

Open Forum

The Open Meeting Act grants HOA members the right to speak at membership meetings and open board meetings, except for executive session board meetings. (Civ. Code §§ 4925; 5000(b).) The time period for when members are permitted to speak during an open board meeting and address the board is commonly referred to as “Open Forum” or the “Member Comment Period.”

Time Limitations
A member’s right to speak at an open board meeting is subject to a “reasonable time limit” established by the board. (Civ. Code § 4925(b).) Time limits commonly utilized by HOAs in this respect range between 2 and 4 minutes per member.

Topics Discussed; Questions & Responses
Civil Code Section 4930 generally prohibits the board from discussing or acting upon items that were not placed on the agenda that was included with the notice of meeting. (See “Board Meeting Agenda Requirements.”) However Civil Code Section 4930 “does not prohibit a member or resident who is not a director from speaking on issues not on the agenda.” (Civ. Code § 4930(a).) Thus, even if an issue is not listed on the agenda, a member may still speak on that issue. Additionally, regardless of whether a member makes a statement or poses a question about a non-agenda item, Civil Code Section 4930(b) allows a director, an agent of the board, or the association’s manager to do any of the following:

  • “Briefly respond to the member’s statements made or questions posed” by the member; (Civ. Code §4930(b)(1).)
  • “Ask a question for clarification, make a brief announcement, or make a brief report of the person’s own activities, whether in response to questions posed by a member or based upon the person’s own initiative.” (Civ. Code § 4930(b)(2).)

Board Meeting Attendance Rights

California HOAs are private membership organizations and not governmental or public entities.  Members of the general public therefore do not have rights to attend a HOA’s board meetings or membership meetings. Unless an association’s governing documents provide otherwise, the rights to attend board meetings which are provided for in the Open Meeting Act are reserved for the association’s members. (Civ. Code § 4925.)

Open Meetings Only
A member’s right to attend board meetings extends to open meetings, not executive session meetings.  (Civ. Code § 4925(a).) Members are also given the right under Civil Code Section 4925(b) to speak at open meetings and to address the board, subject to certain limitations. (See “Open Forum.”)

Determining Membership Status: Property Owners
An association’s governing documents define who qualifies as a member of the association entitled to attend board meetings. Most governing documents provide that ownership of a lot or unit is the sole qualification for membership in the association. Under such provisions, membership status will extend only to those persons on title to a lot or unit within the association—not to spouses of the owner, the owner’s tenants, agents or attorneys. While many associations permit nonmember spouses to attend board meetings, industry practice is to prohibit the attendance of nonmember tenants, agents (i.e., realtors) and attorneys of members.

Business Entities
When ownership of a lot or unit is in the name of a business or other legal entity, the person who is entitled to attend board meetings on the entity’s behalf will likely depend upon whether the person is authorized under the entity’s managing or organizing documents to manage the entity’s business and affairs. (SB Liberty, LLC v. Isla Verde Association, Inc. (2013) 217 Cal.App.4th 272, 283.)

Related Links

Homeowner Attorneys at your HOA’s Board Meetings? This Could Become the New Normal – Published on HOA Lawyer Blog (January 29, 2016)

No Action Without a Meeting

Corporations Code Section 7211 allows for corporate boards to take board actions “without a meeting, if all directors of the board…individually or collectively consent in writing to that action.” (Corp. Code § 7211(b).)  This “action without a meeting” (aka “unanimous written consent”) provision was historically relied upon by HOA boards of directors in order to conduct association business outside of board meetings. However, as a result of the 2012 amendments to the Open Meeting Act, HOA boards are generally prohibited from taking such “actions without a meeting”:

“The board shall not take action on any item of business outside of a board meeting.” (Civ. Code § 4910(a).)

“Items of Business” & Delegation
An “item of business” for the purpose of Civil Code Section 4910’s prohibition on actions without a meeting means “any action within the authority of the Board, except those actions the board has validly delegated to any other person or persons, managing agent, officer of the association, or committee of the board comprising less than a quorum of the board.” (Civ. Code § 4155 (Emphasis added).) Thus, a board may delegate some of its responsibilities to a manager or committee in order for certain actions to be taken between board meetings. (See “Delegating Duties & Authority.”)

Email & Emergency Meetings
Civil Code Section 4910 also prohibits boards from a conducting a meeting “via a series of electronic transmissions, including but not limited to, electronic mail.” (Civ. Code § 4910(b)(1); See also “Email Meetings.”) Email meetings may, however, be used to conduct emergency meetings. (Civ. Code § 4910(b)(2).)

Email Discussions Permitted
The prohibition on acting on items of business outside of a board meeting does not prohibit the board from discussing items of business via a series of email communications. (See LNSU #1, LLC v. Alta Del Mar Coastal Community Assn (2023).)

Related Links

Email Discussions Between HOA Board Members are not “Meetings”
-Published on HOA Lawyer Blog (September 2023)

Executive Session

One of the primary purposes of the Open Meeting Act is to ensure that an association’s members have the opportunity to attend board meetings and to observe the board’s decisionmaking process. However, there are certain items of business that involve confidential, privileged and/or sensitive information which should not be disclosed to the association’s members for a number of reasons. Civil Code Section 4935 therefore authorizes a board to meet privately in “executive session” to address specified matters, and further does not provide members with the right to attend such “executive session” meetings. (See “Board Meeting Attendance Rights.”)

Executive Session Matters
Civil Code Section 4935 specifies certain matters which may, and in some instances must, be discussed or acted upon by the board in executive session.  The following matters are those which may be discussed or acted upon by the board in executive session:

  • Legal Matters. A board may adjourn to, or meet solely in, executive session “to consider litigation.” (Civ. Code § 4935(a).) This language is broad, but is generally interpreted to include matters involving pending litigation, as well as matters which have the potential to result in litigation, in order to preserve attorney-client privilege.
  • Formation of Contracts. A board may adjourn to, or meet solely in, executive session to consider matters “relating to the formation of contracts with third parties.” (Civ. Code § 4935(a).) The Civil Code does not explicitly address whether matters “relating to the formation of contracts” allows for the board to actually vote on and execute contracts in executive session, though doing so is common practice. Once a contract has been executed by the board, the contract becomes an association record which may be inspected by members except in instances where the contract is “privileged under law.” (Civ. Code § 5200(a)(4).)
  • Member Discipline. A board may adjourn to, or meet solely in, executive session for matters involving “member discipline.” (Civ. Code § 4935(a).) However, if a member who is the subject of the disciplinary matter requests that the board meet in executive session to discuss the matter, the board is required to comply with the member’s request and to allow the member to attend the executive session. (Civ. Code § 4935(b); See also “Notice & Hearing Requirements.”)
  • Personnel Matters. A board may adjourn to, or meet solely in, executive session for “personnel matters.” (Civ. Code § 4935(a).) Personnel matters would include, but not be limited to, hiring, firing, raises, disciplinary issues, etc. that pertain to the association’s employees.
  • Payment Plans. A board may adjourn to, or meet solely in, executive session “to meet with a member, upon the member’s request, regarding the member’s payment of assessments, as specified in Section 5665.” (Civ. Code § 4935(a).) This involves discussing a payment plan with a delinquent member for the payment of the delinquent member’s assessment debt in accordance with Civil Code Section 5665. Notably, Civil Code Section 4935(b) requires the board to meet in executive session to discuss a payment plan—indicating that any such discussions must take place in executive session regardless of the word “may” contained in Civil Code Section 4935(a). (See also “Payment Plans.”)

The following matters are those which must be discussed or acted upon by the board in executive session:

  • Member Discipline Upon Member’s Request. A board must adjourn to, or meet solely in, executive session “to discuss member discipline, if requested by the member who is the subject of the discussion,” and must further allow the member to attend the executive session. (Civ. Code § 4935(b).) Additionally, when the board is to meet “to consider or impose discipline upon a member,” (i.e., to levy a fine or a reimbursement assessment), the board must notify the member of the meeting (aka the “hearing”) and such notification must contain a statement that the member has a right to attend the meeting and address the board. (Civ. Code § 5855; See also “Notice & Hearing Requirements.”)
  • Payment Plans. A board must adjourn to, or meet solely in, executive session “to discuss a payment plan pursuant to Section 5665.” (Civ. Code § 4935(c); See also “Payment Plans.”)
  • Lien Foreclosure. A board must adjourn to, or meet solely in, executive session “to decide whether to foreclose on a lien pursuant to subdivision (b) of Section 5705.” (Civ. Code § 4935(d); See also “Decision to Initiate Foreclosure.”)

Notice & Agenda Requirements
Notice of executive session meetings must be provided to the association’s members and must include an agenda of items to be discussed or acted upon at the meeting. (Civ. Code § 4920.) The amount of notice varies depending upon whether the executive session is held with a scheduled open meeting, or whether the board is meeting “solely in executive session”:

  • Executive Session with Open Meeting. If the executive session is held with a scheduled open meeting, notice of the executive session and its agenda is included in the open meeting’s notice and agenda that is provided to the members at least four (4) days prior to the meeting, unless the association’s governing documents require a longer period of notice. (Civ. Code § 4920; See also “Board Meeting Notice Requirements.”)
  • Solely in Executive Session. If the board is to meet “solely in executive session” (i.e., between scheduled open meetings), the notice and agenda must be provided at least two (2) days prior to the meeting. (Civ. Code § 4920.) If a provision of the association’s governing documents requires a longer period of notice for meetings held solely in executive session, that provision does not apply “unless it specifically states that it applies” to meetings held solely in executive session. (Civ. Code § 4920(b)(3).)

Executive session matters involve confidential, privileged and/or sensitive information which are only “generally noted” in the minutes of the following open board meeting pursuant to Civil Code Section 4935(e).  Broad and generalized descriptions are typically used for executive session agenda items.

Executive Session Minutes; Items Noted In Open Meeting Minutes
Although there is no explicit legal requirement for the board to keep minutes of executive session meetings, provisions of the Corporations Code and Civil Code strongly indicate the existence of such a requirement. (See “Board Meeting Minutes.”) Notwithstanding that issue, “any matter discussed in executive session shall be generally noted in the minutes of the immediately following meeting that is open to the entire membership.” (Civ. Code § 4935(e).)

No Member Attendance Rights
Except in instances involving a member’s disciplinary matter or payment plan (discussed above), the association’s members are not entitled to attend executive session meetings. (Civ. Code § 4925(a); See also “Board Meeting Attendance Rights.”)

Form of Meeting
Executive sessions may take place in any of the following forms:

  • In Person. The directors may meet in person at a physical location, typically within a common area clubhouse or recreational facility. (Civ. Code § 4090(a).)
  • Teleconference. The directors may meet via teleconference “where a sufficient number of directors to establish a quorum of the board, in different locations, are connected by electronic means, through audio or video, or both.” (Civ. Code § 4090(b).)
  • Email (Prohibited). Email executive session meetings are prohibited except for emergency meetings. (Civ. Code § 4910(b).)

Calling Executive Session Meetings
Unless otherwise provided in the association’s articles or bylaws, executive session meetings “may be called by the chair of the board or the president or any vice president or the secretary or any two directors.” (Corp. Code § 7211(a)(1).)  

Board Meeting Agenda Requirements

An agenda of items to be discussed or acted upon by the board at a board meeting must be included within the notice of meeting that is provided to the association’s members. (Civ. Code § 4920(d).) The only exception to the agenda requirement is in the context of emergency meetings where no notice is required. (Civ. Code § 4920(b)(1).)

Discussions and Actions Constrained by Agenda
In general, “the board may not discuss or take action on any item at a nonemergency meeting unless the item was placed on the agenda” included with the notice of meeting. (Civ. Code § 4930(a).) The content of the agenda is thus significant because the board is generally prohibited from discussing or acting upon items that were not placed on the agenda, subject to the following exceptions:

  • A director or the association’s manager may briefly respond to statements made or questions posed by a person speaking at an open meeting. (Civ. Code § 4930(b)(1).)
  • A director or the association’s manager may ask a question for clarification, make a brief announcement, or make a brief report of the person’s own activities, whether in response to questions posed by a member or based upon the person’s own initiative. (Civ. Code § 4930(b)(2).)
  • A director or the board may provide a reference to, or provide other resources for factual information to, the association’s manager or other agents or staff. (Civ. Code § 4930(c)(1).)
  • A director or the board may request that the association’s manager or other agents or staff report back to the board at a subsequent meeting concerning any matter, or take action to direct the manager or other agents or staff place a matter of business on a future agenda, or to direct its manager to perform administrative tasks that are necessary to carry out the requirements of Civil Code Section 4930. (Civ. Code § 4930(c)(2)-(3).)
  • The board may act on emergency items, items requiring immediate action, and items that appeared on the agenda for the board’s previous meeting (discussed further, below). (Civ. Code § 4930(d).)

Emergency Items; Items Requiring Immediate Action; Items on Prior Agenda
In addition to the exceptions listed above, the board may take action on any item of business not appearing on the agenda under any of the following conditions:

  • Emergency Situation. Upon a determination made by a majority of the board present at the meeting that an emergency situation exists. An emergency situation exists if there are circumstances that could not have been reasonably foreseen by the board, that require immediate attention and possible action by the board, and that, of necessity, make it impracticable to provide notice. (Civ. Code § 4930(d)(1).)
  • Item Requiring Immediate Action. Upon a determination made by the board by a vote of two-thirds of the directors present at the meeting, or, if less than two-thirds of total membership of the board is present at the meeting, by a unanimous vote of the directors present, that there is a need to take immediate action and that the need for action came to the attention of the board after the agenda was distributed. (Civ. Code § 4930(d)(2).)
  • Item Appearing on Prior Agenda. The item appeared on an agenda for a prior meeting of the board that occurred not more than thirty (30) calendar days before the date that action is taken on the item and, at the prior meeting, action on the item was continued to the meeting at which the action is taken. (Civ. Code § 4930(d)(3).)

Before discussing any item falling into one of the three (3) categories above, the board is required to openly identify the item to the members in attendance at the meeting. (Civ. Code § 4930(e).)

Related Links

‘Substantial Compliance Test’ Possibly Applicable to Open Meeting Act Requirements – Published on HOA Lawyer Blog (01/05/16)

Board Meeting Notice Requirements

The Open Meeting Act contains several requirements governing the notice of board meetings which must be provided to an association’s members, as well as the items that must be placed on an agenda that is included with the notice. Those requirements vary depending upon the type of board meeting being held (i.e., whether the meeting is an open meeting, a meeting held solely in executive session, or an emergency meeting). The notice requirements that apply to board meetings are distinct from those that apply to membership meetings. A notice of board meeting must include an agenda of items to be discussed or acted upon by the board at the meeting. (See “Board Meeting Agenda Requirements.”)

Notice to Members
The type of notice that must be provided to members varies based upon the type of meeting being held.

Open Meetings
Notice of the time and place of open board meetings must be provided to all members at least four (4) days prior to the meeting, unless the association’s governing documents require a longer period of notice. (Civ. Code § 4920.)

Teleconference Meetings – If the open board meeting is to be held via teleconference, Civil Code Section 4090(b) requires the association to specify within the meeting notice a physical location where members may attend and observe (listen to) the teleconference meeting, as well as address the board on association matters during Open Forum. (See “Teleconference Meetings.”)

Virtual Meetings – If the open board meeting is to be conducted virtually (entirely by teleconference without any physical location), Civil Code Section 4926 requires the association to also include within the notice: instructions on how to participate by telephone, the contact information of someone who can provide technical assistance with the teleconference process, and a reminder that members may request individual delivery of meeting notices with instructions how to do so. (See “Virtual Meetings.”)

Executive Session Meetings
Notice of the time and place of board meetings which are held solely in executive session must be provided to all members at least two (2) days prior to the meeting. (Civ. Code § 4920(b)(2).) If a provision of the association’s governing documents requires a longer period of notice, that provision does not apply to a meeting held solely in executive session “unless it specifically states that it applies” to that type of meeting. (Civ. Code § 4920(b)(3).)

Emergency Meetings
No notice is required for an emergency meeting. (Civ. Code § 4920(b)(1).) If a provision of the association’s governing documents requires notice, that provision does not apply to an emergency meeting “unless it specifically states that it applies” to that type of meeting. (Civ. Code § 4920(b)(3).)

Delivery of Notice to Members
The notice of meeting, which includes the agenda, must be given to members by “general delivery” pursuant to Civil Code Section 4045. (Civ. Code § 4920(c).) General delivery includes any of the following methods:

  • “Any method for delivery of an individual notice pursuant to Section 4040.” (Civ. Code § 4045(a)(1).)
  • “Inclusion in a billing statement, newsletter, or other document that is delivered by one of the methods provided in this section.” (Civ. Code § 4045(a)(2).)
  • “Posting the printed document in a prominent location that is accessible to all members, if the location has been designated for the posting of general notices by the association in the annual policy statement, prepared pursuant to Section 5310.” (Civ. Code § 4045(a)(3).)
  • “If the association broadcasts television programming for the purposes of distributing information on association business to its members, by inclusion in the programming.” (Civ. Code § 4045(a)(4).)

Posting the notice in a designated area (i.e., a bulletin board located at a common area pool or recreational facility) or including it within a billing statement or newsletter are the more common methods used by associations.

Request for Individual Delivery of Notice
If a member requests to receive general notices by individual delivery, all general notices to that member (which would include notices of meetings), must be delivered to that member by individual delivery (i.e., first-class mail). (Civ. Code §§ 4045(b), 4040.) A member’s right to receive notices of meetings by individual delivery must be described in the association’s annual policy statement. (Civ. Code § 4045(b).)

Notice to Directors
The requirements for giving notice of a board meeting to members of the board (an association’s directors) are typically found in the association’s bylaws or articles. If the association’s governing documents are silent on this issue, Corporations Code Section 7211 provides for the following:

  • Regular Meetings. Regular meetings by the board may be held without notice being given to the directors “if the time and place of the meetings are fixed by the bylaws or the board.”  (Corp. Code § 7211(a)(2).)
  • Special Meetings. Special meetings of the board require “four days’ notice by first-class mail or 48 hours’ notice delivered personally or by telephone, including a voice messaging system or by electronic transmission to the corporation. (Corp. Code § 7211(a)(2).) “Electronic transmission” includes facsimile or email. (Corp. Code § 20.) An association’s articles or bylaws may not dispense with any requirement to provide a notice of a special meeting.
  • Emergency Meetings. Corporations Code Section 7211 does not address notice to directors for emergency meetings.

Waivers of Notice, Consent and Approvals by Directors
As set forth in Corporations Code Section 7211(a)(3), a notice of meeting need not be given to a director who:

 “provided a wavier of notice or consent to holding the meeting or an approval of the minutes thereof in writing,” or

“attends the meeting without protesting, prior thereto or at its commencement, the lack of notice to that director.”

These “waivers, consents and approval” must be filed with the association’s records or made part of the meeting’s minutes. (Corp. Code § 7211(a)(3).)

Board Meetings (Generally)

Meetings of an association’s board of directors are governed by the Open Meeting Act found within the Davis-Stirling Act.  The Davis-Stirling Act defines a “board meeting” as either:

  • A congregation of a quorum of the board, at the same time and place, to “hear, discuss, or deliberate upon any item of business that is within the authority of the board.” (Civ. Code § 4090(a).) or
  • A teleconference where a quorum of the board, in different locations, “are connected by electronic means, through audio or video, or both.” (Civ. Code § 4090(b).)

Thus, board meetings may take place either in person, or via teleconference.  Meetings via email are generally prohibited except in circumstances involving emergency meetings.  (Civ. Code § 4910(b).)

Email Exchanges are not “Gatherings” of the Board
Email exchanges between board members do not constitute “gatherings” of the board:

“By sending e-mails to one another through cyberspace, often hours or days apart and from different homes and offices, the Association’s directors did not simultaneously gather in one location to transact board business, and therefore they did not conduct a “board meeting” within the meaning of [the Open Meeting Act].” (LNSU #1, LLC v. Alta Del Mar Coastal Community Assn (2023).)

No Action without a Meeting
The Open Meeting Act prohibits boards from taking actions on items of business outside of a board meeting.  (Civ. Code § 4910; See also “No Action without a Meeting.”)

“Items of Business” & Delegation
The Davis-Stirling Act defines an “item of business” to mean “any action within the authority of the Board, except those actions the board has validly delegated to any other person or persons, managing agent, officer of the association, or committee of the board comprising less than a quorum of the board.” (Civ. Code § 4155 (Emphasis added).)  Thus, a board may delegate some of its responsibilities to a manager or committee in order for certain actions to be taken between board meetings (i.e., the review/approval of architectural applications is often delegated to an “architectural committee”).

Email Discussions Outside of Board Meetings are Permitted
The Open Meeting Act’s prohibition on taking action outside of a board meeting does not prohibit the Board from discussing items of business via email outside of a board meeting:

“By discussing items of Association business in e-mails… the directors did nothing contrary to the purpose of the [Open Meeting Act], because they took no action on those items in the e-mails. Although the [Open Meeting Act] prohibits the board from acting on items of Association business outside a board meeting…it does not prohibit the board from discussing the items outside a meeting.” (LNSU #1, LLC v. Alta Del Mar Coastal Community Assn (2023).)

Types of Board Meetings
The types of board meetings include (a) open board meetings, (b) executive session meetings, and (c) emergency meetings.  The type of meeting being held impacts:

Related Links

Email Discussions Between HOA Board Members are not “Meetings”
-Published on HOA Lawyer Blog (September 2023)

AB 648 Signed! Virtual HOA Meetings
-Published on HOA Lawyer Blog (October 2023)

Open Meeting Act

HOA board meetings are governed by the “Common Interest Development Open Meeting Act” (“Open Meeting Act”) found at Civil Code Sections 4900 through 4955.  The provisions of the Open Meeting Act contain requirements that:

Related Links

‘Substantial Compliance Test’ Possibly Applicable to Open Meeting Act Requirements – Published on HOA Lawyer Blog (01/05/16)

Interested Transactions

One of the more common conflicts of interest that arise in the context of homeowners associations involves situations where a contract is awarded to a company in which a director of the association (or a relative of the director) has a material financial interest.  Such “interested transactions” may render the contract void or voidable unless:

  1. The material facts as to the transaction and to the interested director’s conflict are fully disclosed or known to the membership and such contract or transaction is approved by the members, with the interested director abstaining from voting; or
  1. The material facts as to the transaction and the interested director’s interest are fully disclosed or known to the board or committee, and the board or committee authorizes, approves or ratifies the contract or transaction in good faith by a vote sufficient without counting the vote of the interested director or directors and the contract or transaction is just and reasonable as to the corporation at the time it is authorized, approved or ratified. (Corp. Code §§ 310, 7233; Civ. Code § 5350(a).)

Where the decision to approve a transaction or contract benefiting an interested director is challenged, the most significant facts which are considered include:

  1. Full Disclosure of Material Facts. Whether the interested director made full disclosure of all material facts regarding the actual or perceived conflict to the remaining members of the board.
  2. Recusal. Whether the interested director recused himself from board discussions on the proposed transaction or contract, as well as the board’s vote, in order to avoid influencing the board’s decision.
  3. “Just and Reasonable”. Even if the interested director disclosed all material facts and recused himself from the discussions and vote, the contract or transaction must still be “just and reasonable as to the [association] at the time it is authorized, approved or ratified.” (Corp. Code §§ 310, 7233; See also Harvey v. The Landing Homeowners Association (2008) 162 Cal.App.4th 809.)

“Just and Reasonable” – Burden of Proof
Where the validity of an interested transaction is challenged as not being “just and reasonable,” the party who bears the burden of proof depends upon whether the interested director participated in the decision to authorize the transaction or contract, or instead recused himself in order for the transaction or contract to be approved by a “disinterested majority” of the board:

“Where a disinterested majority approves the transactions and there was full disclosure section [7233(a)(2)] applies, and the burden of proof is on the person challenging the transaction. [Citation.] Where, however, the approval was not obtained from a disinterested board vote, section [7233(a)(3)] applies and requires the person seeking to uphold the transaction to prove it was ‘just and reasonable’ as to the corporation.” (Harvey, at 823-824 (Emphasis added.).)

Recusal & Quorum
An interested director’s presence at a meeting of the board or a committee thereof which authorizes, approved or ratifies a contract or transaction may be counted for the purpose of establishing quorum. (Corp. Code §§ 310(c), 7234.) However, the interested director should recuse himself from the board’s discussion and abstain from voting on the interested transaction. (Robert’s Rules, 11th ed., p. 407.)

Prohibited Actions by Directors & Committee Members
As provided for in Civil Code Section 5350(b), a director or member of a committee is prohibited from voting on the following matters affecting the director or committee member:

  1. Discipline of the director or committee member;
  2. An assessment against the director or committee member for damage to common area or facilities (i.e., the vote to levy a “Reimbursement Assessment” against the director or committee member);
  3. A request, by the director or committee member, for a payment plan for the director or committee member’s delinquent assessments;
  4. A decision whether to foreclose on a lien on the separate interest of the director or committee member;
  5. Review of a proposed physical change to the separate interest of the director or committee member (i.e., voting to approve the director or committee member’s architectural application); and
  6. A grant of exclusive use of common area to the director or committee member.