Below, our friends at Jordan Price Law Office provide insights into holding HOA meetings virtually.  For additional information or guidance from Jordan Price please see contact information at the bottom of the article.

“We are hearing from many of our clients that your focus is shifting to your annual meetings and how business can be conducted given the challenges of the continuing COVID-19 pandemic.  Unfortunately, all sources seem to indicate that a group membership meeting any time this year will be unlikely, either because of continuing gathering limitations by state or local order, or simply because social distancing is too difficult to achieve in a setting that might accommodate live membership attendance. As we have previously shared, Governor Cooper has, by Executive Order, encouraged all nonprofit corporations in the state to hold annual meetings by remote means (which would include all owners associations).  Specifically,  the order provides that any annual meeting that is held by “remote communication” be held in such a way that members shall have the right to participate by remote communication, “including with respect to the conduct of the business of such members’ meeting.”  Further, the order reaffirms the process of voting by mail ballot, which has existed under NC statute for years but was seldom used in the context of annual meetings.

We want to clarify that there are 2 components of a “virtual” annual meeting:  (1) voting and (2) meeting with opportunity for member participation.  Statutory laws in North Carolina have not yet evolved to authorize electronic  or online voting without specific authority in the bylaws, and the vast majority of HOA bylaws do not contain those provisions.  What this means is that your annual meeting official business—voting on open director seats, approval of minutes from the prior annual meeting, ratification of budgets, and any other matter on which a vote must be taken—is all conducted by mail ballot either before or after the virtual meeting, pursuant to Section 55A-7-08 of the NC General Statutes (the NC Nonprofit Corporation Act).  The virtual meeting can be used to provide committee/financial/board reports and perhaps quell any unrest on any major issues before election voting is to take place.  Alternatively, the ballots may be collected prior to the virtual meeting and announcement of election results provided at the meeting.  We would be happy to discuss which option might best suit your HOA.   In any event, there is no voting during the online meeting; all voting must be done by mail ballot pursuant to the statute.

Anticipating the need to address these virtual meetings, and recognizing that most associations do not have the budget for purchasing hosting software for what may be a one-off meeting, our Firm has procured software that allows interactive hosting of virtual annual meetings.  Several attorneys in the firm are trained to operate the software and host your meeting as a “virtual Parliamentarian.”  We have run through over a dozen of these with different HOA boards at this point, and the results have been very positive.  Some frequently asked questions on voting and how the virtual meeting would operate using this software are answered below:

• No proxies are sent because all members vote by mail ballot
• Quorum is established based on number of ballots received by a deadline date
• Written meeting notice is sent with a web address for members to register individually for the virtual meeting
• Board members, community manager and/or committee members can be set up as presenters to present financials and committee reports to the membership;
• All members are muted and only the meeting host can unmute, eliminating the potential for unruly “zoom” type meetings
• Boards can make the decision to limit questions to written format or for members to be recognized by the host to verbally address the meeting (most boards are choosing written questions)
• Private chat function between presenters protects attorney-client privilege between legal counsel and board members during the meeting

We know many of you already have a backlog and will have questions about this process and how to get started.  Our own Matt Waters will address many of your questions next Friday, June 26th,  as a presenter for a CAI Virtual Annual Meeting Webinar – follow the link to register or learn more.

As always, please let us know if you have further questions or would like to schedule your annual meeting or other virtual meeting open to your membership.  Because only one meeting can be hosted in a particular time slot, early reservation of your date and time is recommended.”

Community Association Practice Group

Jordan Price Law Offices

919-828-2501 (Main) | 919-831-4484 (Fax) | www.jordanprice.com