New Law Mitigates the Restrictions of Palm

Posted by KDAOSep 06, 20160 Comments

For most boards, the Palm case has severely hindered the day-to-day operations of the association because it prevented the board from discussing association issues, even those topics designated for closed/executive board sessions (i.e., litigation, employment, violations, and delinquencies) outside a scheduled board meeting. While transparency is necessary for an association to run smoothly, the Palm case seemed to take it a bit far – for example, to discuss a pending litigation action, a board would need to schedule a board meeting & invite owners to attend, open the meeting, and then immediately close it and make the owners leave.

Thankfully, a new law has been enacted to mitigate these harsh restrictions. This new law applies to both condo and non-condo common interest community associations. Effective January 1, 2017, a board can meet separately from a noticed meeting to discuss certain specific issues, to interview potential employees or providers of goods and services, and to consult with the association's legal counsel. Under Public Act 99-0567, the board can close any potion of a noticed board meeting or meet separately from a noticed meeting: (i) to discuss probable or pending litigation; (ii) to discuss third-party contracts or information regarding appointment, employment, engagement, or dismissal of an employee, independent contractor, agent, or other provider of goods and services; (iii) to interview a potential employee, independent contractor, agent, or other provider of goods and services; (iv) to discuss violations of the rules and regulations of the association; (v) to discuss member's or unit owner's unpaid share of common expenses; or (vi) to consult with the association's legal counsel.

What does this mean for your association? It means that as of January 1, 2017, the board can discuss more topics in a closed session or it can meet outside a noticed meeting or in a board workshop closed to the other owners to discuss these topics and even discuss them by phone or email. This change will mitigate the constraints placed on the board by Palm and allow the board to more effectively administer the association's day-to-day operations.

Please contact KDAO to discuss how this case affects your association.