CONFIDENTIALITY
Organizations across the world house at least some confidential information. So what's confidential?
Your state statutes might tell you. In Washington State, WUCIOA provides the most definitive list of permissible reasons to hold an executive session AND what material can be considered confidential. The 20 or so states that have adopted a version of the Uniform Common Interest Ownership Act (UCIOA) or Uniform Condominium Act (UCA) have statutory language comparable to what you see below. Except where your state statutes conflict, all communities should consider the principles of the UCIOA as a baseline threshold of best practices. Reinventing the wheel because your statutes lack specificity is just an excuse to eschew transparency with your owners. Moreover, directors have a duty of confidentiality that's part of their duty of care.
It would be incorrect to assume that emails sent among board members are confidential by default due to the recipient list. Emails between board members, a community manager and other vendors are generally not privileged. That stands in contrast to a privileged email between an attorney and a client. It's also important to consider the context of an email with regard to your code of ethics.
Copying your attorney on an electronic (typically email) communication does not necessarily create attorney/client privilege.
Having your attorney attend a meeting (especially an open meeting) should likewise not be assumed to create privilege.
In dismissing In Re Grand Jury as improvidently granted, the US Supreme Court solidified that the "primary purpose" test is the gold standard to establish privileged communication. Supreme Court Evaluates Scope of Attorney-Client Privilege – Adam Liptak | WSJ | 01/09/23
If nothing else, decades of electronic communication have taught us that the Forward button is imminently convenient and that replies sometimes surprise us when additional recipients have been added (or BCC'd without our knowledge). Emails are unlikely to be considered confidential by default unless they include confidential information. While WA State's wiretapping laws prohibit recording conversations without the consent of other parties, there are no blanket prohibitions against sharing the contents of an email with a third party.
Most of the books and records of your community ARE NOT confidential. Many people (for example realtors and potential purchasers) receive detailed information about a community without the need to complete a real property transaction. Are those persons legally barred from sharing that information with the world? No. Certain statues prohibit the use of documents disclosed to members for commercial activity, but many forms of disclosure, including posts on social media, are not commercial in nature. Common interest communities (usually a nonprofit corporations) generally lack authority to hold their directors and members accountable for items that fall outside of their established governance. If there's something gnawing at you, check out Always Ask "WHY?"
Having independent directors who think for themselves and apply their skills, knowledge and experience to benefit your community should result in differences of opinion. Omnipotence and unreasonableness often like to hide in the shadows and don't come out in the light of open discussion in front of homeowners who are not directors. That's just one reason that open meetings are a best practice. Are you willing to speak to the unvarnished truth in an open meeting? Why not?
There's no reason to be confused about what's confidential or caught off-guard when words you put in writing end up somewhere you may not have intended. Confidentiality and ethics often intertwine. Leading with consistency, empathy, honesty, integrity, reason and transparency (open meetings, access to records, satisfaction surveys, etc.) proactively builds a healthy community.
Associations located in California are subject to additional scrutiny based on the Davis Sterling Act. Read about Davis-Sterling restrictions for email between Board members and also here. You may also enjoy reviewing the limited privacy ruling for ballots from this 2021 decision from Tennessee (Rarity Bay Partners v. Rarity Bay Company No. E2021-00166-COA-R10-CV).
California: Executive Session & Record Inspection
California Civ Code Civil Code § 4935 - Executive Session Meetings (additional details: Davis-Sterling.com)
(a) The board may adjourn to, or meet solely in, executive session to consider litigation, matters relating to the formation of contracts with third parties, member discipline, personnel matters, or to meet with a member, upon the member’s request, regarding the member’s payment of assessments, as specified in Section 5665.
(b) The board shall adjourn to, or meet solely in, executive session to discuss member discipline, if requested by the member who is the subject of the discussion. That member shall be entitled to attend the executive session.
(c) The board shall adjourn to, or meet solely in, executive session to discuss a payment plan pursuant to Section 5665.
(d) The board shall adjourn to, or meet solely in, executive session to decide whether to foreclose on a lien pursuant to subdivision (b) of Section 5705.
(e) 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.
California Civ Code Civil Code § 5215 - Record Inspection (bulleted list from Davis-Sterling.com)
(a) Except as provided in subdivision (b), the association may withhold or redact information from the association records if any of the following are true:
(1) The release of the information is reasonably likely to lead to identity theft. For the purposes of this section, “identity theft” means the unauthorized use of another person’s personal identifying information to obtain credit, goods, services, money, or property. Examples of information that may be withheld or redacted pursuant to this paragraph include bank account numbers of members or vendors, social security or tax identification numbers, and check, stock, and credit card numbers.
(2) The release of the information is reasonably likely to lead to fraud in connection with the association.
(3) The information is privileged under law. Examples include documents subject to attorney-client privilege or relating to litigation in which the association is or may become involved, and confidential settlement agreements.
(4) The release of the information is reasonably likely to compromise the privacy of an individual member of the association.
(5) The information contains any of the following:
(A) Records of goods or services provided a la carte to individual members of the association for which the association received monetary consideration other than assessments.
(B) Records of disciplinary actions, collection activities, or payment plans of members other than the member requesting the records.
(C) Any person’s personal identification information, including, without limitation, social security number, tax identification number, driver’s license number, credit card account numbers, bank account number, and bank routing number.
(D) Minutes and other information from executive sessions of the board as described in Article 2 (commencing with Section 4900), except for executed contracts not otherwise privileged. Privileged contracts shall not include contracts for maintenance, management, or legal services.
(E) Personnel records other than the payroll records required to be provided under subdivision (b).
(F) Interior architectural plans, including security features, for individual homes.
(b) Except as provided by the attorney-client privilege, the association may not withhold or redact information concerning the compensation paid to employees, vendors, or contractors. Compensation information for individual employees shall be set forth by job classification or title, not by the employee’s name, social security number, or other personal information.
(c) No association, officer, director, employee, agent, or volunteer of an association shall be liable for damages to a member of the association or any third party as the result of identity theft or other breach of privacy because of the failure to withhold or redact that member’s information under this section unless the failure to withhold or redact the information was intentional, willful, or negligent.
(d) If requested by the requesting member, an association that denies or redacts records shall provide a written explanation specifying the legal basis for withholding or redacting the requested records.
Texas: Executive Session
Texas Property Code Section 209.0051(c) - Open Board Meetings
(c) Regular and special board meetings must be open to owners, subject to the right of the board to adjourn a board meeting and reconvene in closed executive session to consider actions involving:
personnel,
pending or threatened litigation,
contract negotiations,
enforcement actions,
confidential communications with the property owners' association's attorney,
matters involving the invasion of privacy of individual owners,
or matters that are to remain confidential by request of the affected parties and agreement of the board.
Following an executive session, any decision made in the executive session must be summarized orally and placed in the minutes, in general terms, without breaching the privacy of individual owners, violating any privilege, or disclosing information that was to remain confidential at the request of the affected parties. The oral summary must include a general explanation of expenditures approved in executive session... [view full text]
Washington State: Confidential Records
View Washington State open meeting requirements.
Reference Confidential Association Records: RCW 64.38.045 | RCW 64.32.170 | RCW 64.34.372 | RCW 64.90.495
(3) Records retained by an association may be withheld from inspection and copying to the extent that they concern:
(a) Personnel and medical records relating to specific individuals;
(b) Contracts, leases, and other commercial transactions to purchase or provide goods or services currently being negotiated;
(c) Existing or potential litigation or mediation, arbitration, or administrative proceedings;
(d) Existing or potential matters involving federal, state, or local administrative or other formal proceedings before a governmental tribunal for enforcement of the governing documents;
(e) Legal advice or communications that are otherwise protected by the attorney-client privilege or the attorney work product doctrine, including communications with the managing agent or other agent of the association;
(f) Information the disclosure of which would violate a court order or law;
(g) Records of an executive session of the board;
(h) Individual unit files other than those of the requesting unit owner;
(i) Unlisted telephone number or electronic address of any unit owner or resident;
(j) Security access information provided to the association for emergency purposes; or
(k) Agreements that for good cause prohibit disclosure to the members.
(4) In addition to the requirements in subsection (3) of this section, an association must, prior to disclosure of the list of unit owners required to be retained by an association under subsection (1)(c) of this section, redact or otherwise remove the address of any unit owner or resident who is known to the association to be a participant in the address confidentiality program described in chapter 40.24 RCW or any similar program established by law.
