Just as many businesses have been affected by COVID-19, homeowners associations, or HOAs, are also feeling the impact as shelter in place orders limit their ability to meet and make important business decisions – including how to protect residents during the pandemic. While meetings are canceled or postponed in response to local mandates, the HOA must balance the needs of the communities they serve.
Board meetings and annual meetings are important functions of the HOA to keep a community safe, efficient, and informed. Bylaws govern everything from how board members are elected, to when and where the board meets to discuss business matters and vote on important decisions.
What happens when the HOA is unable to conduct business as directed by the community’s governing documents and applicable laws?
In some circumstances, it may be necessary to amend governing documents and/or adopt emergency rules that allow the HOA to continue critical business functions when standard procedures are interrupted.
Emergency or Contingency Plans for HOAs
While the COVID-19 pandemic presents novel issues for HAOs, it is not unheard of for disruptive events like inclement weather, illness, or maintenance issues to restrict an HOAs ability to meet as scheduled.
All HOAs should have an emergency or contingency plan in place that provides alternative options for meeting, voting, and conducting business when in-person meetings are not possible. This plan should provide flexibility to allow the HOA board to make quick changes when appropriate.
HOAs can delay annual meetings, shift meetings to an online platform, or host meetings through conference calls. If an HOA decides to hold virtual meetings or make changes in voting procedures to adopt remote options, language in the by-laws should be drafted to permit these changes when necessary. When the by-laws do not explicitly allow a new meeting procedure or voting practice, the HOA board should have the rule-making authority necessary to amend the by-laws to accommodate necessary procedural changes or to enact temporary, emergency rules.
Open communication and compliance with required notice standards in making any changes to business practices will help homeowner organizations avoid costly legal or political challenges from HOA members. Whether an HOA already has a plan, needs to establish one, or must promptly enact emergency rules, HOA leaders should work closely with legal counsel, community managers, and the appropriate insurance experts to ensure their respective communities’ plans are effective, comply with applicable laws, and remain compliant with governing documents.
Mail-In Voting for HOAs
Many HOA by-laws allow mail-in voting. When in-person meetings are not possible, this is a good option to avoid delays in voting on important measures. However, if there is no such provision, or if the board would also like to implement electronic voting during virtual or telephonic meetings, the by-laws can be amended to allow alternative options to in-person voting.
Continued compliance with governing documents and applicable laws is important, but health and safety concerns may require that certain business transactions, including voting, be rescheduled to a later time when an in-person meeting is deemed safe. While HOA laws require that board member votes be made at a meeting that is open to owners, the law does not preclude online meetings. When an alternative to in-person voting is available and all interested parties can be given the appropriate opportunity to participate and/or observe, changing by-laws or adopting emergency rules to accommodate a new voting procedure may be appropriate.
Virtual HOA Meetings
If there are state or local restrictions in place to limit groups from gathering, the HOA must seek an alternative option for holding meetings. This should not be problematic as there are usually several methods for an HOA to conduct business when it is not possible for people to meet in person, such as written consent or virtual meetings.
While HOA laws impose certain requirements like annual meetings, these meetings may be held remotely, so long as all interested parties are provided appropriate notice and fair opportunity to participate in or access the meeting. In making the shift to a virtual platform, the HOA should carefully consider attendance and use a platform that will accommodate the entire audience without cost or other limitations. A test run is advisable to work through any technical difficulties that may arise when relying on technology to conduct important business.
In deciding how to proceed with meetings, it is important that the HOA carefully balance the meeting requirements of governing documents and applicable laws with local health and safety mandates. While the technology exists to make virtual meetings a safe option to limit social interactions and the risk of exposure to COVID-19, postponing meetings may be in the best interest of the HOA. HOA boards and managers must look to local, state, and federal authorities for direction in making decisions in this constantly changing environment.
HOA Meetings by Phone
Pandemic notwithstanding, it is not appropriate for HOAs to hold a board meeting as an emergency meeting simply because of shelter in place mandates. An emergency meeting can only be held when unforeseen circumstances require immediate attention by the board for which providing notice is impracticable. Rather, homeowners must be given proper notice of board meetings and this notice must provide a physical location where they can listen to the board meeting via conference phone if there are no other arrangements made to provide virtual access.
When notice requirements cannot be satisfied or it is not possible to give interested parties remote access to a meeting, the meeting should be postponed until a date when these requirements can be satisfied.If you have questions about how HOAs are faring in light of COVID-19, reach out to our law firm. Attorney Corey Zurbuch is a member of the Community Associations Institute, an organization that supports HOA governance, and is well-versed in the laws impacting HOAs. Please feel free to contact him or other members of our firm to learn more.