COVID-19 and the related stay-at-home orders have brought to light challenges to common interest community associations. One issue that has come up often is how HOAs should conduct board meetings and member meetings in a way that protects the safety and welfare of its members while also ensuring that the association can continue to operate.
Minnesota non-profit corporations, including HOAs, are governed by the Minnesota Nonprofit Corporation Act, Minn. Stat. § 317A (the “Nonprofit Act”). Under the Nonprofit Act, board meetings can always be held remotely. Specifically, the law states:
Any meeting among directors may be conducted solely by one or more means of remote communication through which all of the directors may participate in the meeting, if the same notice is given of the meeting required by subdivision 4, and if the number of directors participating in the meeting is sufficient to constitute a quorum at a meeting. Participation in a meeting by that means constitutes presence at the meeting.
This means that HOA boards can hold board meetings by any kind of remote communication where people can participate in “real time” – telephone conference call or online via Zoom, GoTo Meeting, FaceTime, Skype, Microsoft Teams, Google Hangouts, etc.
HOA board meetings held via remote communication must still comply with the notice and quorum requirements to conduct business. Assuming there is a quorum for a meeting held by remote communication, the board can conduct business by majority vote just like it could at an in-person meeting.
The Nonprofit Corporation Act permits boards to act without a meeting – i.e., via e-mail or written action – with the unanimous written consent of all board members. In this regard, the law states:
An action required or permitted to be taken at a board meeting may be taken by written action signed, or consented to by authenticated electronic communication, by all of the directors. If the articles so provide, an action, other than an action requiring approval of members with voting rights, may be taken by written action signed, or consented to by authenticated electronic communication, by the number of directors that would be required to take the same action at a meeting of the board at which all directors were present.
This means that if a board has an emergency situation that prevents it from getting together for a formal meeting (either electronically or in person), it can still take action as long as all board members agree to the action in writing.
Member meetings are treated different. Under Minnesota law, member meetings cannot be held by remote communication unless the articles or bylaws specifically permit it:
To the extent authorized in the articles or bylaws and determined by the board, an annual or special meeting of members may be held solely by one or more means of remote communication, if notice of the meeting is given to every member entitled to vote, and if the number of members with voting rights participating in the meeting is sufficient to constitute a quorum at a meeting. Participation by a member by that means constitutes presence at the meeting in person or by proxy if all the other requirements of section 317A.453 are met.
Most associations were created before remote communication methods were created. Accordingly, their articles and bylaws almost never permit member meetings to be held via remote communication.
Best Practices Moving Forward
Our current advice to our CIC clients is: (1) continue to hold Board meetings, but do so via remote communication; and (2) postpone any scheduled member meetings (including annual meetings, if necessary) until the Governor lifts the stay-at-home order; and (3) hold any necessary homeowner votes by mailed ballots, if possible.