Let’s face it, communication among board members can be difficult; sometimes, certain directors are not residents of the pertinent associations. Other times, there are so many directors, it becomes hard to keep track of who communicated what to whom. But perhaps, the biggest breakdowns in communication are seen when directors don’t get along.
Although in many cases, board members work well together, even when views differ, this is not always the case. Sometimes directors are at odds with one another and purposely try to exclude certain directors from communication. Whether the discord arises from distrust, personality differences, or something different, secret communications among directors are not in the best interests of the community and in fact, are ultimately unlawful.
In 2009, there were enough complaints lodged with legislators about exclusionary communications among directors, that the Colorado Common Interest Ownership Act (“CCIOA”) was amended to address this issue. Ultimately, this amendment prohibited secret communications between directors, as well as hoarding of information.
Section 303(1)(b) of CCIOA provides as follows:
Notwithstanding any provision of the declaration or bylaws to the contrary, all members of the executive board shall have available to them all information related to the responsibilities and operation of the association obtained any other member of the executive board. This information shall include, but is not necessarily limited to, reports of detailed monthly expenditures, contracts to which the association is a party, and copies of communications, reports, and opinions to and from any member of the executive board or managing agent, attorney, or accountant . . . [emphasis added].
The above provision of CCIOA applies to all common interest communities in Colorado, regardless of when such community was created, and ultimately it prohibits directors from keeping information from other directors on their boards. The scope of the term “information” is quite broad and includes copies of communications with the attorney, manager, and accountant.
Oftentimes, directors don’t realize they are committing violations of the above statutory provision, so to help you discern whether you or your board members are in violation of the above clause, below are several examples of communications that violate this provision of CCIOA.
Bob, the board member is disliked by the remaining directors who believe it would be in the best interests of the community if Bob was removed from the board. As a result, this group of directors reaches out to the association’s attorney, at the exclusion of Bob, to seek advice on how Bob may be removed. Bob was neither invited to the discussion, nor provided with any information obtained from the discussion.
Dan, board member, believes the board is mismanaging money, so he reaches out to the association’s CPA to get more information. Upon discussion with CPA, Dan feels better and realizes the money is being properly handled. He does not advise the other board members of this conversation with the CPA.
Jeff and Jenny, who are both directors, do not get along. Most board meetings are continually disrupted by bickering between these directors. The three remaining directors do not know what to do, so they reach out to the community manager and the association’s attorney for advice. Although the advice is used, these communications are not disclosed to Jeff or Jenny.
Lilly, a board member, believes the remaining directors are not properly complying with their duty to maintain portions of the community, so she contacts the association’s attorney. Attorney advises that everything is being performed correctly. Lilly does not communicate this information to the rest of the directors believing no harm, no foul.
Dave and Janice (directors) believe that Carl (another director) is disclosing board information to owners in the community, and they don’t trust him. As a result, Dave and Janice discuss association business outside of meetings between themselves and leave Carl out to ensure confidential information does not get leaked.
In some of the above examples, directors believed they were acting in the best interests of their communities by excluding certain directors from communications; but in reality, these directors were exposing themselves and their associations to liability by violating the requirements of the law.
The above does not mean that all directors must be involved in all communication at all times; but it does mean that any information obtained by a board member, or group of board members, must be shared with all other directors who were not privy to the conversation or who did not directly receive the documentation.
For more information concerning communications between board members, please contact an Altitude attorney at 303.432.9999 or at [email protected].