Meeting minutes are one of the most important of all corporate documents. Nonetheless, more often than not Minutes fail to properly record Board action, or they refer to matters that are a detriment to the Association. When it comes to Minutes, to borrow a phrase from Ludwig Mies van der Rohe, “Less is more”!
What to Include
Minutes should describe the meeting (e.g., “Minutes of April 1, 2004 Meeting of Board of Managers of ABC Corporation”), identify which Board members are present/absent, identify management representatives and/or any guest speakers that are present, and indicate that a quorum of the Board is present. Minutes should reflect the time that the meeting is called to order and adjourned. If a Board member arrives late, or leaves early, the Minutes should note this and the specific time. And the Minutes should be signed by the Secretary and indicate that they have been approved by the Board.
Minutes must accurately record matters considered and action taken by the Board on agenda items (i.e., the outcome of the vote on motions). For example, “Motion to approve the proposed lighting maintenance contract with XYZ Lighting, dated July 4, 2004, made by John Smith, seconded by Jane Jones. Vote Taken: 4 In Favor, 1 Opposed, Motion Passes.” Recording how individual Board members voted is not generally required. It is helpful to organize the Minutes to mirror the agenda.
As important as what should be in Minutes is what should not be in the Minutes. The Minutes are not a transcript of a meeting, and they should not include the comments of Board members or owners (which are often made in an “owner’s forum”). If the Board is so inclined, the Minutes could refer generally to a “unit owner forum” or a topic discussed by the Board, without further detail as to the substance of the comments/discussion. Minutes that are too extensive may include incorrect information or statements from unqualified persons that could be used against the Association in litigation. And to underscore, the comments may not even be factually accurate, but there they are in the official corporate record!
So, it is generally not a good idea to include the comment of an owner that “the roof needs to be replaced,” or “Mrs. Kravitz’ tripped over the crack in the sidewalk for the second time in a year. When is the sidewalk going to be repaired?” That is, unless you want to make it easy for someone to prove that the Board had notice of a condition that later causes injury. And the Minutes should not recite or summarize the privileged advice of Association counsel; unless you want to waive the privilege (not a good idea). That said, I am not suggesting that the Board not keep owners informed. That is the role of a newsletter.
Executive Session Issue
Initially, do note that under an appellate court ruling in Boucher , a Board will need to provide copies of a video/audio tape of a Board meeting, including of an executive session if, in my view, it does not take careful written Minutes. Frankly, the executive session should not generally be recorded on audio/video. A question comes up from time to time regarding motions on issues, like owner rules violations, that were discussed by the Board during executive session.
The Minutes of the Board meeting where there is an executive session should reflect the votes to go in and out of executive session. Further, the Minutes should generally describe the reason for the executive session, which can simply refer to one of the six exceptions for executive sessions noted under Section 18(a)(9)(A) of the Condominium Property Act or Section 1-40(b)(5) of the Common Interest Community Association Act for executive session. These are to (i) discuss litigation when an action against or on behalf of the particular association has been filed and is pending in a court or administrative tribunal, or when the board of managers finds that such an action is probable or imminent, (ii) discuss the appointment, employment, engagement or dismissal of an employee, independent contractor, agent, or other provider of goods and services, (iii) interview a potential employee, independent contractor, agent, or other provider of goods and services, (iv) discuss violations of rules and regulations of the association, (v) discuss a unit owner’s unpaid share of common expenses or (vi) consult with the association’s legal counsel.
No further details should be included in the Minutes with respect to the discussion in the executive session.
Since the respective Acts do not permit votes or decisions to be made in an executive session, there should be no substantive information or “notes” of what was discussed in the executive session contained in the Minutes.
As always, any vote on decisions arising out of an executive session matter must take place in an open Board meeting, and the Minutes should, of course, reflect the motion and vote in open session of a Board meeting as to the matter that was discussed in executive session. For example, based on the decision with respect to a rules violation hearing, the motion should describe “what kinds of allegations of misconduct have led to disciplinary proceedings against members, what evidence the board heard and relied on in such proceedings, and what penalties the Board imposed for misconduct.”
The issue then is whether the Minutes need to include the unit number or identify the owners in these motions?
The law is not clear on this. The conservative approach is to list the unit numbers/owner names in the motions made by the Board when referring to unit owner rules violations and when levying fines, and to describe the amount of the fine. The reason is that if the fine is challenged in court, the Board should have a clear, detailed, corporate record of its actions, and as to what unit and owner is involved. The Minutes are where this record is memorialized.
Here is an example: Motion to find that following the hearing of March 1, 2017 that the violation set forth in the January 6, 2017 notice of violation did occur and to levy a fine in the amount of $100.00 against unit owner John Smith of Unit 999.”
That said, I understand that there may be “privacy” or similar reasons why Board members do not want to list a unit number or identify an owner by name. There is an alternative approach that many associations use in this situation. That is, many associations will keep a log of matters, discussed in executive session. The log is kept separate and apart from the Minutes. For example, the log might state:
“March 1, 2017 Executive Session Item 1: Unit 999/Owner Smith rules violation.”
“March 1, 2017 Executive Session Item 2: Unit 123/Owner Jones rules violation.”
Then, rather than referring to a unit number or owner by name, the Minutes could refer to the executive session log item number. Here is an example: “Motion regarding March 1, 2017 Executive Session Item 1 to find that the violation set forth in the January 6, 2017 notice of violation did occur and to levy a fine in the amount of $100.00.” The log book must be maintained for as long as the meeting Minutes are maintained in case it is ever needed to be referenced in, for example, litigation. I do need to point out that this approach has not been tested in an Illinois appellate court. Further, the Minutes need to be carefully drafted when addressing litigation, so as not to reveal privileged information/strategy.
Here is sample language for the portion of Minutes that include an executive session:
“Executive Session (If Applicable) Motion to go into executive (closed) session of the Board made by________, seconded by________, and approved by the Board. On ________, at approximately ____:____ a.m./p.m., the Board of Directors convened in an executive (closed session) of the Board meeting. During the closed session the Board of Directors did [SELECT AS APPLICABLE] (i) discuss litigation when an action against or on behalf of the particular association has been filed and is pending in a court or administrative tribunal, or when the board of managers finds that such an action is probable or imminent, (ii) discuss the appointment, employment, engagement or dismissal of an employee, independent contractor, agent, or other provider of goods and services, (iii) interview a potential employee, independent contractor, agent, or other provider of goods and services, (iv) discuss violations of rules and regulations of the association, (v) discuss a unit owner’s unpaid share of common expenses or (vi) consult with the association’s legal counsel.
No vote or action was taken in this executive (closed) session of the Board meeting. Motion to close the executive (closed) session and re-open the open portion of the Board meeting made by________, seconded by________, and approved by the Board. Resume Open Portion of Board Meeting [Note: Any motion/vote/decision regarding the matter discussed in executive (closed) session needs to be made in this open portion and included here.]”
With a little thought, Board meeting Minutes will create an accurate record of Board action without resembling a novel or exposing the Association to liability. If your community has legal concerns regarding meeting minutes, do not hesitate to contact our firm.
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