Virtual Governance How Co-ops & Condos Hold Meetings Distantly

In multifamily housing associations and cooperatives, the annual meeting of owners or shareholders is a legally mandated opportunity for a community to convene, learn, share, and exercise their essential duty—to vote. The lead-up to the election of directors and other matters before the owners or shareholders can amount to an entire election season—spring or early summer for many multifamily communities—that includes mingling events, campaigning, and informational meetings. 

This year, boards, managers, and their legal counsel had to face the unprecedented challenge of conducting these processes safely in the midst of a pandemic while complying with both the law and their own governing documents. For some, it meant adjourning the meeting to some future point when the world might resume some form of normalcy—which of course has yet to happen. For others, it meant acquiring and adjusting to new, virtual systems of gathering: the online meeting platforms of Zoom, Google Meets, Microsoft Teams, and the like with which, for better or worse, we have now all become intimately familiar.

Holding the Remote

In many states and municipalities, the legislature offered some solutions in the early days of the pandemic. Scott Smiler, attorney with the New York firm Gallet Dreyer Berkey, tells The Cooperator that the Business Corporation Law (BCL), which governs cooperatives as corporations, was amended “specifically [to provide] that meetings can be held solely by means of electronic communication, and that the platform or service will be deemed the place of the meeting….So whether your bylaws provide it or not, we can now look at that specific BCL section to give us the authority.” Smiler mentions that this provision applies only to co-ops—not condos or HOAs, which are governed by Real Property Law—but that courts would likely apply a similar thought process to condominiums as well if challenged on the matter. An additional caveat is that the order expires on December 31, 2021. (As Smiler says, “Hopefully, we’re not in these conditions at that point.”)  

But being able to do something legally does not mean it’s easy or doable in practice. “It all depends upon the size of your building and the makeup of your building,” continues Smiler. “If you’re dealing with a co-op that’s only 10 units, I as the attorney could probably run the meeting for you. If you’re dealing with, let’s say, a Mitchell-Lama property that might have 2,100 units, then you really need a separate election monitoring company or election service company that will run the platform for you.”

David Berkey, a partner with the firm, has the same recommendation. “For the largest buildings,” he says, “there are professional voting companies [that] assist boards and management companies to prepare for and conduct these virtual annual meetings.” Berkey adds that for owners or shareholders who have concerns about election legitimacy, professional companies can set up a secure electronic voting process. “There are ways to protect against voter fraud, but you just have to design it before you send out your materials to use for the vote,” he says.

Smiler adds, “The goal is to make sure that you can provide reasonable accommodations, reasonable measures where people can vote, that they know their vote is secure, [and] that they know that their vote is being counted.”

Professional Assistance

Chris Backert has been running elections and voting for co-ops, condos, and HOAs (among other types of organizations) with his company, Election-America, for over a decade. He tells The Cooperator that they’ve recently added about a dozen new multifamily clients throughout the country who have specifically needed help adapting to a virtual format for their annual meeting and board elections. 

After voting debacles with previous election administrators—one of which somehow made it into the New York Times (www.nytimes.com/2011/07/12/nyregion/election-errors-causing-strife-at-lower-east-side-co-op.html) —Seward Park Cooperative (where the author has lived for the last 15 years) in lower Manhattan has run sophisticated, successful elections for the last eight years with Election-America. The company provides secure mailing of all voting materials, tabulation and confirmation of quorum and votes (including breakdown by the co-op’s four buildings and other salient data), and voting receipts to all shareholders. In normal times (i.e., absent a global pandemic), election administrators remain on site throughout the day of the meeting and at the meeting itself with touch-screen tablets for voting. Shareholders also have the option of voting by paper or electronic proxy, or—new to the co-op this year—by telephone. Electronic and telephone voting uses a secure code unique to each unit that is mailed in advance with the election materials.

This year’s annual meeting took place in June as normally scheduled, with some notable changes. There was no lobby voting for the four directors’ seats and a ballot question for a bylaw amendment, but online, mail-in, or hand-delivered proxy were still available, as well as telephone voting. For several years, the co-op has had a webinar-style virtual component to its annual meeting, wherein the physical meeting is live-streamed for shareholders who are not able to attend in person. With the meeting taking place completely virtually via Zoom this year, everyone had to attend this way, which made establishing a quorum slightly more touch-and-go. But once the requisite one-third of household units was tallied, the votes could be counted and the meeting proceeded. After the board and its professionals shared their PowerPoint presentation, shareholder participants were able to ask questions via the chat function, which made for a Q&A session that was decidedly more orderly and civil than past years. Many shareholders commented that they preferred the Zoom format to either the webinar or the in-person meeting. 

Hybrid Solutions

In some regions, housing communities have developed workarounds to the socially distanced annual meeting conundrum instead of—or in addition to—the virtual format. Janet Aronson, a partner in Braintree, Massachusetts-based law firm Marcus Errico Emmer & Brooks (MEEB), explains, “Unless your condominium documents authorize voting by mail-in ballots, then it’s technically not valid, unless there’s a proxy vote attached to it. So what we recommend is that they call it a ‘meeting for a limited purpose,’ and that there’ll be no in-person attendance; the mail-in ballot/directed proxy will give the voting authority to one individual—perhaps the board president or the board secretary—and that person would effectively accomplish the meeting on a particular date and time and count the votes and close the meeting.” Separately, she continues, the board could hold an “informational meeting”—where a quorum isn’t necessary and there is no need to take formal attendance or tally votes—either on a virtual meeting platform like Zoom, or somewhere attendees can gather safely and in numbers currently sanctioned by their local jurisdiction (like in an outdoor parking lot), or both. There, board members could provide their usual updates on the financial status and ongoing projects of the association or corporation, and unit owners/shareholders can mention concerns and ideas and ask questions. 

“Now there is another way to actually address this and the time might be upon us to do this,” Aronson proposes, “and that would be to amend the documents to actually allow for mail-in ballots or remote meetings or electronic voting, so that we can accomplish valid votes and comply with the condominium documents.” Of course, amending the documents usually requires a vote of the owners or shareholders, so it’s a bit of a Catch-22. But if the vote can be accomplished by proxy ballot as Aronson suggests, with all of the usual notice requirements prescribed by the governing documents followed, and the required quorum and voting threshold are reached and the vote passes—“typically in Massachusetts based on the percentage interest that’s assigned to the unit,” notes Aronson—then future elections and other votes by the owners could be conducted via mail or electronically. 

According to Richard Brooks, another partner at MEEB, associations may want to consider such an amendment not just in response to COVID, but in keeping up with the times. “The next generation, they don’t want to go to meetings, they want to text. That’s how it is nowadays. So electronic voting and electronic meetings is what’s happening.”

But to accommodate owners and shareholders of multiple generations, says Smiler, “You also want to be cognizant of the fact that not everybody in the building, depending upon the demographic, is comfortable going on to Zoom or something like that. They might not have that technological savviness or they just might not be comfortable doing it.” 

Real-Life Virtual Meetings

Dan LeBlanc, a portfolio manager with FirstService Residential who manages eight associations in the Boston area, says that many of his communities postponed their spring annual meetings “indefinitely.” As spring turned to summer and now to fall, with the coronavirus still raging on and shutdowns and social distancing still mandated in many jurisdictions, “it was imperative that alternative plans were made to comply with the condo docs and conduct trustee elections,” he says.

 To accomplish that, LeBlanc developed a set of guidelines so that annual meetings at his associations could take place virtually, using the online meeting platform Zoom:   

• Provide a call-in option for those who do not have computers. 

• Owners are welcome to submit questions/concerns in writing prior to the meeting for the board and management to address.

• All owners are put on mute during the meeting to prevent peripheral sounds and people interrupting. 

• All meetings are conducted on a share screen via PowerPoint presentation for the owners. This helps significantly with a natural flow and allows people to follow along easily. 

• At the end of the meeting, residents on the video are permitted to ask questions via the chat icon. LeBlanc reads them aloud and then either he or the board answers.

• All necessary trustee elections are conducted afterward via a mail-in ballot sent directly to the management company. 

Joanne Gardner serves on the board of directors at Sherman Terrace Cooperative in the Bronx and chairs its rec room committee. When The Cooperator spoke to her for this article, the 66-unit co-op had just held its annual meeting a few days prior in a hybrid virtual-physical format. “It was actually better than expected,” she tells us. “We had both virtual [participants] on Zoom, and we also used our rec room, where shareholders who attended in person [socially] distanced and wore masks. So we had both going on.”

Of the shareholder response, she says, “I didn’t hear any complaints about it. I think most people were appreciative that we were able to, you know, have our annual meeting given the circumstances, and the extent that everybody went through to make it happen.” In addition to setting up the Zoom meeting, the board went out of its way to make the rec room available for the ten or so shareholders who don’t have access to the internet, or for those who just wanted to attend in person. Additionally, some of their more tech-savvy board members gave personal assistance to residents who needed a Zoom tutorial or to simply get people comfortable with the platform. “Everyone was grateful to have the opportunity to participate,” Gardner continues. “I walked away feeling pretty good about it.”

As long as virtual or electronic meeting formats are permitted in an association’s or corporation’s governing documents, conducting meetings to accomplish the business of a multifamily community should not be hindered by coronavirus constraints. In fact, you might find these methods of meeting and voting preferable to traditional “physical” ones. Necessity is the mother of invention and can lead us to adaptations or alterations that have lasting benefits. 

Darcey Gerstein is Associate Editor and Staff Writer for The Cooperator.

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Comments

  • I live in a Mitchell Llama co-op and have heard nothing from out Board. We usually have our election in December. I do not understand how you can have a virtual elections when there are many of our cooperators do NOT have computers. What happens to them,