Electronic Board of Directors and Membership Meetings in a Post-Covid-19 World
Well, it is not quite a post-COVID-19 world yet, but hopefully, it will be one day soon. We are, however, living in a post-governor-ordered-state-of-emergency world, meaning that the emergency powers granted to condominium, cooperative, and homeowners’ associations’ boards of directors by virtue of the governor’s emergency orders have come to an end, with this caveat: The emergency authority granted to community association boards of directors after the expiration of the governor’s emergency orders is, generally speaking, “limited to that time reasonably necessary to protect the health, safety, and welfare of the association and the owners and their family members, tenants, guests, agents, or invitees, and to mitigate further damage and make emergency repairs.” As such, each passing day diminishes the arguments supporting a board’s reasonable reliance on the utilization of these emergency powers. However, given the recent uptick in Covid cases plus ever evolving CDC guidance issued towards the end of July, 2021, some community associations may consider relying on the continuance of the emergency powers provision. If so, it is strongly recommended that such a community association receive proper guidance from its legal counsel.
Interestingly, until July 1, 2021, electronic meetings of community association members and boards of directors were not specifically addressed in the legislative grant of emergency powers which could be used during a governor-declared state of emergency. Rather, the emergency powers of days gone by provided that association boards of directors could conduct board meetings and membership meetings with notice given in as practicable a manner as possible, including publication, radio, United States mail, the Internet, public service announcements, and conspicuous posting on the common property or any other means the board deems reasonable under the circumstances. Notice of board decisions may be similarly communicated. In addition, the board could cancel and reschedule any association meeting. Under certain circumstances, decisions could be made on the spot, so to speak, without the need for a noticed meeting. The legislative emergency powers can be found in §718.1265, §719.128, and §720.316 of the Florida Statutes for condominium, cooperative, and homeowners’ associations, respectively. Nowhere in the pre-July 1, 2021 version of the emergency powers legislation did these powers set forth the clear right of the association to conduct solely electronic board and membership meetings, though due to life safety reasons, such power was inferred. However, it should be noted that effective July 1, 2021 the emergency powers legislation was significantly revised to provide for the use of electronic meetings during a governor declared state of emergency.
BOARD MEETINGS
With this as our backdrop, without a declared state of emergency can community associations continue to hold electronic board meetings via platforms such as zoom? Let us examine the relevant legislation that bears on this important inquiry. As to condominium board meetings,
[a] board or committee member’s participation in a meeting via telephone, real-time videoconferencing, or similar real-time electronic or video communication counts toward a quorum, and such member may vote as if physically present. A speaker must be used so that the conversation of such members may be heard by the board or committee members
attending in person as well as by any unit owners
present at a meeting… Meetings of the board of administration at which a quorum of the members is present are open to all unit owners… The right to attend such meetings includes the right to speak at such meetings with reference to all designated agenda items… [§718.112(2), Fla. Stat. (2020), Emphasis added].
Note that similar provisions are provided for cooperative associations in §719.106), Fla. Stat. (2020).]
As to homeowners’ association board meetings,
[a] meeting of the board of directors of an association occurs whenever a quorum of the board gathers to conduct association business. Meetings of the board must be open to all members, except for meetings between the board and its attorney with respect to proposed or pending litigation where the contents of the discussion would otherwise be governed by the attorney-client privilege.
A meeting of the board must be held at a location that is accessible to a physically handicapped person if requested by a physically handicapped person who has a right to attend the meeting… Members have the right
to attend all meetings of the board. The right
to attend such meetings includes the right to speak at such meetings with reference to all designated items. [§720.303(2), Fla. Stat. (2020), Emphasis Added.]
In addition, the “Florida Not For Profit Corporation Act,” set out in Chapter 617, Florida Statutes, which applies, in large part, to condominium, cooperative, and homeowners’ associations, so long as not in conflict with Chapters 718, 719, and 720 of the Florida Statutes (and certain other exceptions not relevant to this analysis), provides that,
Unless the articles of incorporation or the bylaws provide otherwise, the board of directors may permit any or all directors to participate in a regular or special meeting by, or conduct the meeting through the use of, any means of communication by which all directors participating may simultaneously hear each other during the meeting. A director participating in a meeting by this means is deemed to be present in person at the meeting. [§617.0820(4), Fla. Stat. (2020).]
Mixing all of these ingredients together so that they all have meaning clearly implies that the community association board can conduct its board meetings via electronic means, like Zoom. However, in our opinion, a more prudent approach is to also make on-site accommodations available to those who wish to attend in person. This can be easily accomplished by ensuring the meeting is noticed in a physical location where the non-board member owners can listen and participate through use of an on-site speaker phone or computer that is preferably provided or otherwise arranged for by the association. (Reminder that Zoom also has a call in feature for those who do not access to, or are not comfortable with, a computer).
MEMBERSHIP MEETINGS
As to all community association membership meetings, members have a right to speak at meetings of the membership. Pursuant to §718.112(2)(d)7 and §719.106(1)(d)4, Florida Statutes, members of condominium and cooperative associations, respectively, have the right to participate in meetings of the unit owners with reference to all designated agenda items. Pursuant to §720.306(6), Florida Statutes, members of a homeowners’ association have the right to speak with reference to all items opened for discussion or included on the agenda. During elections and other meetings where a vote of the membership is at issue, members should be able to observe the tallying of ballots.
As to condominium associations, membership meeting requirements include the following:
An annual meeting of the unit owners must be held at the location provided in the association bylaws and, if the bylaws are silent as to the location, the meeting must be held within 45 miles of the condominium property… [§718.112(2)(d)1, Fla. Stat. (2020).]
As to cooperative associations, membership meeting requirements include the following:
There shall be an annual meeting of the shareholders… The bylaws must provide the method for calling meetings, including annual meetings… [§719.106(1)(d), Fla. Stat. (2020).]
As to homeowners’ associations, membership meeting requirements include the following:
The association shall hold a meeting of its members annually for the transaction of any and all proper business at a time, date, and place stated in, or fixed in accordance with, the bylaws. The election of directors, if one is required to be held, must be held at, or in conjunction with, the annual meeting or as provided in the governing documents… [§720.306(2), Fla. Stat. (2020).]
Furthermore, and of great importance, there is the following provision from the Florida Not For Profit Corporation Act, a/k/a Chapter 617, Florida Statutes:
If authorized by the board of directors, and subject to such guidelines and procedures as the board of directors may adopt, members and proxy holders who are not physically present at a meeting may, by means of remote communication participate in the meeting and be deemed to be present in person and vote at the meeting if:
1) the corporation implements reasonable means to verify that each person deemed present and authorized to vote by means of remote communication is a member or proxy holder; and
2) the corporation implements reasonable measures to provide such members or proxy holders with a reasonable opportunity to participate in the meeting and to vote on matters submitted to the members, including an opportunity to communicate and to read or hear the proceedings of the meeting substantially concurrent with the proceedings, and
3) if any member or proxy holder votes or takes other action by means of remote communication, a record of that member’s participation in the meeting must be maintained by the corporation in accordance with §617.1601.
[§617.0721(3), Fla. Stat. (2020); internal numbering, punctuation, capitalization, and formatting removed; emphasis added.]
Therefore, the members at a membership meeting can participate electronically so long as the board has authorized it and has adopted appropriate procedures. Consultation with the association’s attorney is strongly encouraged, most especially if there will be any “live” voting at the membership meeting.
How members vote at an electronic membership meeting when the member attends virtually is an interesting question. Presently, there is no definitive procedure set out in the law for the member to cast their vote “live” during a zoom meeting. Rather, §617.0721(3) Fla. Stat. (2020), places the burden on the board of directors to adopt procedures in this regard. Obviously, if your association has 400 members who all appear virtually at the membership meeting, live voting for all 400 members will prove to be logistically difficult, if not impossible. It may be far easier to have the members vote i) in advance by proxy, limited proxy, absentee ballot as the case may be, or, ii) if adopted by the association, vote electronically pursuant to the procedures as set out in §718.128, §719.129, or §720.317 (Fla. Stat. 2020). A hybrid approach could also be utilized where the association provides for electronic voting and proxy voting prior to the meeting and then only the remaining few voters who have yet to cast their ballot could cast their vote “live” during the meeting, subject to the requirements of §617.0721(3).
Practice tip 1: Remember, electronic voting can be used whenever a membership vote is needed, even if the meeting does not have a zoom type option for attendance so long as the association has followed the requirements to provide for electronic voting.
Practice tip 2 (For Homeowners’ Associations): If your association’s governing documents require or otherwise allow nominations from the floor of the election meeting, consider amending and removing this provision from the governing documents to clear the way for an electronic membership meeting and election.
IN SUMMARY
Perhaps the initial questions phrased above could be better asked as follows: Absent a declared state of emergency can a community association hold board and membership meetings exclusively via an electronic platform, such as Zoom? Unfortunately, this question has not been satisfactorily addressed by the legislature or the Florida Courts. However, in our opinion, the safer approach, and the one that will avoid the potential for a successful legal challenge by an owner, is to avoid holding meetings exclusively via Zoom when there is no declared state of emergency. Consider using the hybrid approach discussed above where both a physical location is provided along with an electronic component such as Zoom and where members are strongly encouraged to attend and participate electronically.
Can community association board meetings and membership meetings be both electronically and at a physical location for those that want to attend in person even if the business is primarily conducted electronically? The answer is “yes”, so long as certain procedural safeguards are put into place. e.g., the ability of the membership watching via Zoom to fully observe the counting of ballots.
Another approach is to consider amending the association’s bylaws to provide for electronic only board and membership meetings. However, doing so has not yet been legally tested in the Florida courts. Also, remember, too, that a homeowners’ association must provide for a physical location for its board meeting, if requested by a handicapped individual. Also, as these matters are not fully settled in the law, your association’s lawyer may have a different opinion and advise that the association may have electronic board and membership meetings without the need for a physical location.
This journey into the foray of electronic meetings demonstrates a clear need for the Florida Legislature to adopt legislation to make clear that both board and membership meetings may take place electronically without the need to also simultaneously provide for a physical location, most especially so long as the association provides a communal device on association property for not-so-tech-savvy members to observe and participate in the meeting. After all we are blessed to be living in the 21st century. Let’s take advantage of it and add a few tech savvy legislative provisions to our laws governing community associations.
It is recommended you consult with your association legal counsel on the adoption of reasonable rules to ensure your virtual/electronic meetings run smoothly while also ensuring that they are in compliance with the association’s governing documents and Florida Statutes, and for further discussion regarding amending the governing documents of the association to provide clear authorization for electronic board and membership meetings.
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Finally, the last step is to determine how much money the association needs to set aside each year. There are three basic plans for reserve funding: baseline, threshold, and full funding. These determine how prepared the HOA or condo will be when the item’s lifespan is up.
Your maintenance fees cover many of the same things you would need to pay for as a homeowner.
