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.