To limit exposure to the coronavirus and to attempt to manage its spread, healthcare professionals and government officials have urged the public to avoid gatherings and, to the extent possible, to stay at home. As a result, countless events have been canceled and many businesses have suspended operations. Community association boards of directors and managers are understandably concerned about how they should be responding to the coronavirus when it comes to, among other things, conducting association meetings. This article attempts to address that concern, but this is still a rapidly developing situation unlike anything encountered before, so our recommendations may evolve over time as circumstances continue to change.
We've been asked how boards should proceed with respect to board meetings in light of the recent guidance to avoid gatherings. Since Civil Code §4910 provides that boards “shall not take action on any item of business outside of a board meeting,” board meetings are necessary in order to conduct association business. One solution is found in the Civil Code's definition of a “board meeting,” which provides that board meetings can be conducted by teleconference if certain requirements are met. Specifically, Civil Code §4090(b) allows for board meetings to be conducted by teleconference provided that at least a quorum of directors are connected by electronic means through audio or video or both and at least one board member or person designated by the board is physically present at a noticed location where owners may attend and hear and be heard. For associations that do not typically see many (if any) owners showing up to board meetings, this teleconference procedure could be the answer. One board member could show up at the noticed meeting location with a speaker phone, a laptop, or some other device, and the other board members could teleconference in by phone or video conferencing. If any owners show up to attend the meeting, they would need to be able to at least hear all of the directors, and the directors would need to be able to hear any comments made by the owners in open forum.
However, the teleconference meeting procedures required by Civil Code §4090(b), which still requires a physical location where owners can attend the meeting, would not work well at this time for associations where board meetings are well-attended by owners, since we are all being advised to practice “social distancing.” Moreover, even small associations and those associations that do not typically see much owner turnout at board meetings should discourage any gathering of owners at this time. This creates a dilemma when trying to comply with the law requiring that board meetings be open to all owners.
The coronavirus has exposed a problem where the law has not caught up with technology. There are conference call services and video conference services that are readily available, simple to use, and some that even offer free services. Just a few examples of videoconferencing services are Zoom, Cisco Webex, and ClickMeeting, but there are other options available as well. Through either conference call services or video conference services, a meeting organizer can distribute call-in or log-in information that can be used by participants to join in remotely. However, unless the teleconference meeting procedures required by Civil Code §4090(b) are adhered to (i.e., at least one director or person designated by the board is physically present at a noticed location where owners may attend), the law does not currently permit a board meeting to be conducted entirely by conference call or by video conference without a physical location where owners may attend.
Nevertheless, given the recommended precautions relating to the coronavirus, during whatever period of time that gatherings remain discouraged, it would seem reasonable to conduct board meetings by conference call or video conference even without providing a physical location for owners to attend as long as the owners are still able to “virtually” attend the meeting. The meeting notice should explain that as a result of the current health situation, the meeting will be conducted in a virtual manner via conference call or video conference, and the meeting notice should provide owners with the information necessary to join the conference call or video conference. This deviates from the statutory requirement that there be a physical location for the owners to attend the meeting but, under the extraordinary circumstances, this may be the most reasonable manner in which to proceed with board meetings while still meeting the spirit of the law by providing owners an opportunity to participate in open forum and also listen to all items of business discussed by the board.
Of course, owners would still need to be excluded from any executive session discussions of the board. Per Civil Code §4925(a), owners are only entitled to attend a teleconference meeting or the portion of a teleconference meeting that is open to the members. Civil Code §4935 specifies the matters that the board may consider in executive session (which are limited to litigation, the formation of contracts with third parties, member discipline, personnel matters, payment plans for delinquent assessments, and decisions to foreclose on an assessment lien).
There is no similar statutory provision allowing membership meetings, such as the annual meeting of members, to be held via teleconference. Moreover, the annual meeting typically involves the election of directors, and the election of directors is required to be conducted pursuant to the statutorily-required secret ballot voting process. As part of that process, Civil Code §5120(a) provides, in part: “All votes shall be counted and tabulated by the inspector or inspectors of elections, or the designee of the inspector of elections, in public at a properly noticed open meeting of the board or members. Any candidate or other member of the association may witness the counting and tabulation of the votes.” Obviously, the requirement that votes must be counted and tabulated in public at an open meeting and that any member may witness the counting and tabulation creates concern in light of the recommended coronavirus precautions.
Under the circumstances, we again believe that it seems reasonable to conduct membership meetings and the opening of ballots via video conference. Notice could be provided to the membership explaining the decision to conduct the meeting by video conference due to the coronavirus guidelines, and the notice would include instructions for participating in the video conference. There would still need to be a designated location at which the inspector of election would open and tabulate ballots, and a management representative and at least one board member should be present at that location as well. The meeting would be conducted as closely as possible to the normal process except that member participation would be by video conference.
Again, there is no statutory basis for conducting board meetings or membership meetings entirely by teleconference or video conference without owners being able to attend in person. However, the coronavirus has resulted in a declared state of emergency and in-person gatherings are being discouraged. Associations need to be able to continue to conduct business, and video conferencing would seem to follow the spirit of the law while limiting personal contact and acting in accordance with instructions issued by the government. It is always possible that an owner could challenge any action taken that does not strictly comply with the letter of the law. However, given the unprecedented circumstances presented by the coronavirus pandemic, we believe that video conferencing is a reasonable solution for the time being.
As always, associations should consult with legal counsel regarding their particular circumstances.