Governor Roy Cooper signed House Bill 320 on September 20, 2021. The bill is titled “Modernize Remote Business Access” and allows HOAs, condominium associations and other nonprofit and for-profit corporations to conduct business (holding meetings and casting votes) utilizing e-mail and the web-based virtual meeting platforms we all became accustomed to over the past 1.5 years (Zoom, GoToMeeting, Teams, etc.). The bill is extensive and complex, placing a number of requirements on HOAs wishing to making use of the technology.
Below is a summary of the chief provisions of the bill:
- The definition of “vote” has been expanded to include ballots cast through an electronic voting system.
- The board of directors is empowered to adopt emergency bylaws “if a natural or man-made disaster impedes the ability of the corporation’s board of directors or members to comply with one or more provisions of the corporation’s bylaws.”
- Membership meetings may now be held in person or by means of “remote communication.”
- The board of directors may determine that the meeting will be conducted solely by electronic means, but there must be measures in place to ensure that each person voting is in fact a member, and members must be able to participate in the meeting and vote to the same extent if the meeting was held in person. Members must have the opportunity to communicate during the meeting and read or hear the proceedings. Note that the statute doesn’t say that members must be afforded the opportunity to “speak;” thus, allowing them to communicate with the chat feature on virtual platforms should satisfy this requirement.
- Notices that are required to be given to members may be transmitted by email if the member has designated an email address for that purpose.
- Members who wish to communicate and conduct business with the HOA by electronic means must designate that email address.
- If a meeting is to be held by remote communication, the notice must include all information the members need to join the meeting, and must include a statement that the meeting will be conducted solely by electronic means.
- The HOA must implement measures to verify that each person participating in remote meeting is in fact a member of the HOA.
- The statute that allows members to vote by written ballot (as opposed to voting at an in-person meeting) has been expanded to also allow casting of ballots by electronic means. Members must be given the option of using written ballots or electronic ballots. The board may restrict voting to electronic ballots only, but only if ALL members have designated an email address for communication with the corporation. The requirement of a hard deadline for return of ballots remains.
- The corporation’s list of members must be made available to all members beginning two days after notice of the meeting has been given, and must be made available during the meeting. The members’ list may be posted on a website as opposed to mailing it, but the corporation must take steps to limit access to the list to members only (i.e., password-protected).
- A member’s appointment of a proxy to attend and participate in a meeting may be made by email, but it must either contain the member’s electronic signature, or come from the email address that has been designated by the member for communication with the corporation.
- One area where the law could be more inclusive, or perhaps clarified, is to allow meetings to be held by a combination of in-person attendance and remote attendance. The statute seems to suggest that a board could determine that a meeting “shall instead be held solely by means of remote communication”. The use of the word “solely” seems to prevent boards from having the option of holding a meeting by a “hybrid” approach of remote attendance with some in-person attendance. This hybrid approach could be helpful in communities with residents who have less access to or knowledge about modern technology. A hybrid approach, as long as those attending in person and those attending remotely have access to see, hear, read (see the comment above about “communication”) and participate, would meet the statutory intent.
There are a number of web-based platforms available for conducting virtual meetings and casting ballots during the meeting, including VoteHOANow and Election Buddy.
The full text of the bill can be found here:
We will continue to offer guidance as everyone begins adapting to these new ways of doing business. If you have questions, feel free to email me or one of my partners in our Community Association Practice Group:
ABOUT MIKE HUNTER
Mike Hunter’s practice focuses on community and condominium association law. He represents more than 700 associations across North Carolina.
Mike’s background includes real estate and litigation, with a concentration in the area of creditors’ rights, including debt collection, bankruptcy, foreclosure, lien enforcement, and collateral recovery.
From 1995 to 2006, Mike served as an assistant attorney for the Mecklenburg County Sheriff’s Office, primarily in the areas of civil process and judgment enforcement.
ABOUT OFFIT KURMAN
Offit Kurman, one of the fastest-growing, full-service law firms in the United States, serves dynamic businesses, individuals and families. With 15 offices and nearly 250 lawyers who counsel clients across more than 30 areas of practice, Offit Kurman helps maximize and protect business value and personal wealth by providing innovative and entrepreneurial counsel that focuses on clients’ business objectives, interests and goals. The firm is distinguished by the quality, breadth and global reach of its legal services and a unique operational structure that encourages a culture of collaboration. For more information, visit www.offitkurman.com.
DELAWARE | MARYLAND | NEW JERSEY | NEW YORK | NORTH CAROLINA | PENNSYLVANIA |SOUTH CAROLINA | VIRGINIA | WASHINGTON, DC