In light of COVID-19, many condominium association and homeowners association Boards of Directors are holding their “meetings” via virtual/online means. But, what does that mean as far as voting at those meetings?
The online/virtual element is not the determining fact as to what is required for a vote to be considered valid. The key is whether the vote is taken at a meeting.
Action without meeting must be unanimous. The Nonprofit Corporation Act, MCL 450.2525 states:
450.2525 Taking action without meeting; consent.
Unless prohibited by the articles of incorporation or bylaws, action required or permitted to be taken under authorization voted at a meeting of the board or a committee of the board may be taken without a meeting if, before or after the action, all members of the board then in office or of the committee consent to the action in writing or by electronic transmission. The written consents shall be filed with the minutes of the proceedings of the board or committee. The consent has the same effect as a vote of the board or committee for all purposes.
Contested votes have to be taken at a meeting. However, it is permissible to hold a Board meeting by teleconference or videoconference. The Nonprofit Corporation Act, MCL 450.2521(3) states:
450.2521 Regular or special meetings of board; location; notice; attendance or participation as waiver of notice; participation by means of conference telephone or other remote communication.
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(3) Unless otherwise restricted in the articles of incorporation or bylaws, a member of the board or of a committee designated by the board may participate in a meeting by means of conference telephone or other means of remote communication if all individuals who are participating in the meeting can communicate with the other participants. Participation in a meeting under this subsection constitutes attendance in person at the meeting.
Many condominium and HOA bylaws also specifically authorize remote participation by members of the Board at meetings by telephone conference, audio conference, audio-visual conference or other means of remote communication. Every association’s bylaws are unique, and you should check yours to see if remote participation is specifically addressed.
So what happens if you take action without a meeting, say through an email vote, and it is not unanimous, what can you do? Most bylaws contain a provision stating that notice must be sent calling a special Board meeting and that such notice must be sent a specific number of days before that meeting occurs. However, if the matter is of a urgent nature and a Board wants to bypass the notice requirements of the meeting, in many instances it can if all the Directors are actually present at the meeting. Each association should check their bylaws as to what exceptions there are to notice of Board meetings.
In the current world, condominium associations and HOAs are facing many challenges and navigating those challenges can be difficult. If you or your association have questions about how to navigate these challenges or any others, please feel free to contact Tilchin & Hall, P.C. at (248) 349-6203.
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