Normally (not during a pandemic), virtual membership meetings of homeowner and condominium associations are not permitted. As noted in this Coronavirus, Flu, and HOA/Condo Association Meetings article, members usually have two options for making decisions outside of meetings: (1) “action by written (unanimous) consent” and (2) “action by written ballot.” In addition, for declaration amendments the NC Planned Community Act and Condominium Act allow adoption by “written agreement” from members, which is a different no-meeting process. But recognize that none of these count as a “meeting.” They are all methods of making decisions without a meeting.
So, if you want to have your annual or special membership meeting and can’t do it in person, what options are there? As summarized in this New NC Executive Order Again Allows Electronic Nonprofit Membership Meetings article, Governor Cooper has again authorized virtual nonprofit corporation membership meetings through August 31, 2020. Depending on the course of COVID-19, that Executive Order may be extended again. However, the Executive Order makes clear that voting at a virtual membership meeting does not occur by hands or voice. So exactly how is the meeting noticed and held?
CAVEAT: Like all of our blogs, this article is not legal advice. The facts of any situation and the governing documents for an association could change the advice given. State statute allows the articles of incorporation or bylaws to prohibit or limit the type of voting, so these options may not available to a particular association. For advice on what meeting options are available for your particular HOA/condo or a specific issue, contact one of the community association attorneys at any of our offices.
That said, the process we most often see for a virtual HOA or condo member meeting is as follow:
- Notice of the meeting must be sent in accordance with the governing documents and state statute. (FYI, notice provisions for condo meetings were changed in July 2020; see Updated NC Condominium Act). The meeting notice should be clear that the meeting will be held virtually by specific method (e.g., Zoom, GoToMeetings, Microsoft Teams, phone, etc.) and the day, time, and any necessary login information, such as URL.
- The notice should include the agenda and make clear there will be discussion of issues. FYI, NC state statute provides that the notice of a meeting must “state the time and place of the meeting and the items on the agenda, including the general nature of any proposed amendment to the declaration or bylaws, any budget changes, and any proposal to remove a director or officer.” To avoid confusion, it may be best to include in the notice that voting and results will not be during the meeting, but by written ballot.
- If elections are to be held, follow any governing document provisions for nominations. In the current state of emergency, this process may need to be reasonably modified to allow for the virtual setting. For instance, many governing documents and Robert’s Rules of Order Newly Revised allow nominations from the floor at the meeting. That’s not practical if ballots have already been sent out. As an alternative, nominations may need to be required earlier (before any ballot goes out) and then have blank lines on the ballot for “write-in votes.”
- Virtual meeting is held with discussion of issues (e.g., community concerns, nominations and elections, bylaws amendment). Depending on the meeting, special rules of order may be necessary for getting recognized, how long and many times an owner may speak, etc.
- Remember—no virtual “live” meeting votes by voice, hand, or Zoom poll. Those don’t meet the statutory requirements of a “written ballot.” Action by written ballot can include a written or electronic ballot (or both) sent to all members. If electronic, the electronic transmission must set forth or be submitted “with information from which it can be determined that the electronic transmission was authorized by the member or the member’s proxy.”
- Sophisticated platforms are available for online voting, and “election services” is listed among CAI’s Professional Services Directory. While such a service may be appropriate for larger associations, we often see less sophisticated methods. Most often, ballots are mailed and/or emailed to all members setting forth the proposeds actions and providing an opportunity to vote “For” or “Against” the action or election. Owners print out, cast their votes, sign, date and return the ballots by US Mail or email with a scanned ballot or even photograph of the ballot. The owner’s actual signature/date can serve as proof “that the electronic transmission was authorized,” just as if at a meeting. More complicated processes can be followed if ballots are to remain secret. The usual concern with an email only (no attached ballot) is that it is more difficult to verify the accuracy of the sender.
- Written ballot votes have to include a “drop-dead” return date by which the ballot, whether sent by US Mail or e-mail, must be received or will not be counted. The date should be set far enough out to ensure sufficient votes. For a written ballot vote to count, enough votes must be cast to equal or exceed the quorum required at a meeting.
FYI, the Governor’s Executive Order makes clear that the calling and holding of a virtual membership meeting is in the sole discretion of the Board. That is, members can’t “demand” a special virtual membership meeting against the Board’s wishes.
If properly noticed and held, a virtual meeting along with a written ballot vote will both adopt the actions taken AND count as holding the annual or special meeting. How long will this emergency process for virtual membership meetings and voting be available? As of right now, through August 31. After that, who knows? Keep in mind, though, that the “written ballot” method of making decisions is a North Carolina statute that existed before the current crisis. Even without an Executive Order, there may be nothing to prevent your association from holding a virtual gathering/“town hall” to discuss issues, and then to vote by written ballot. Decisions will have been made, there just won’t have been a “meeting” for purposes of holding any required annual meeting.
Author: Jim Slaughter
Articles have been Reprinted with permission from Black, Slaughter, Black.
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