There has been significant media coverage regarding the Coronavirus and its arrival within our State. Indeed, Governor Gretchen Whitmer declared a state of emergency on Tuesday after two positive cases for Coronavirus were reported. Since these events have unfolded, our offices have received numerous calls and questions from property managers and board members, most of which relate to whether and how to conduct both board and association meetings.
The Michigan Nonprofit Corporation Act provides that, unless otherwise prohibited in the governing documents, a board member may participate in a meeting by means of conference call or other means of remote communication (such as Skype, or the like). This is permitted as long as the means of communication permits all individuals participating in the meeting to communicate with the other participants. The Nonprofit Corporation Act also indicates that participation in a meeting via remote communication constitutes attendance in person at the meeting for quorum and other purposes. Therefore, assuming that there is no prohibition in your specific governing documents, it would be fine for boards to hold their monthly or other periodic meetings via conference call or other remote communication. We believe that most community association governing documents do not contain prohibitions on remote participation; but, please feel free to contact our office if you are unsure about your community’s specific documents.
The spring is primetime for community association annual meetings. As with board meetings, under the Nonprofit Corporation Act, association members may participate in an annual meeting remotely unless the association’s governing documents provide otherwise. Most governing documents do not prohibit remote attendance; therefore, most community associations can allow their owners to participate in their annual meetings remotely. Owners may also vote remotely if, among other things, the association implements reasonable measures to verify that each person participating by means of remote communication is indeed an association member. Verifying could be done visually via Skype, for instance, assuming the member is known to the board. More often, though, remote participation and membership verification is handled through sites like “Go To Meeting”, where a special login can be provided to the member as part of the verification process, or by third-parties that specialize in electronic voting such as “The Inspectors of Election” or “Simply Voting.”
However, given the minimal amount of time communities would have to prepare for this type of remote participation, it may make more sense to reschedule annual meetings if the circumstances warrant (that decision need not be made now, but could be revisited closer to specific annual meeting dates). The Nonprofit Corporation Act gives boards leeway in choosing a date, even though there may be a reference in the bylaws to a specific date. That is, Section 402 of the Nonprofit Corporation Act provides that if the annual meeting is not held on the bylaw-designated date, the “board shall cause the meeting to be held as soon after that date as is convenient.” Further, this section provides that members cannot take action to compel the Board to call an annual meeting until 90-days after the date designated in the Bylaws. Indeed, given the unprecedented situation we are facing, we doubt a court would take issue if it were necessary to go beyond this 90-day period.
The current Coronavirus situation is changing rapidly. We are not providing this information to encourage any community association to take any unnecessary or drastic actions. Rather, we are providing this guidance to our clients so that they can make their own best decisions about how to keep their communities operating effectively in this environment.
If you would like to discuss specific situations within your association, please contact our office and one of our knowledgeable attorneys would be happy to help.