Virtual Governance How Co-ops & Condos Hold Meetings Distantly

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.

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4 Comments

  • I live in a Mitchell Llama co-op and have heard nothing from out Board. We usually have our election in December. I do not understand how you can have a virtual elections when there are many of our cooperators do NOT have computers. What happens to them,
  • The annual co-op meeting was held via Zoom this year. Although a notice was sent informing shareholders that they would be able to verbally ask questions during the meeting via the "raise hand" icon, during the meeting, the function was disabled as well as the chat. Shareholders could only send in questions ahead of time or write-in questions live which were then only viewable by the board and management. The questions were selectively addressed and in a cursory manner essentially silencing the shareholders. Can't really call that a shareholders' meeting. The technology was used as a tool to oppress discussion.
  • My cooperative is going to hold our Annual Shareholders Meeting via Zoom and phone call this month. Our Board of Directors is requiring voting PRIOR to the Annual Shareholders Meeting, either by mailing the proxy or emailing it to Management for counting. Yet, the stated purpose of the meeting is for the election of the Board. We have had no notice that our cooperative documents have been changed to allow for this. Is this legal?
  • Our annual election was held virtually this year. it gave shareholders just numbers of shares on an important election procedures. The following questions were not answered in this new election procedure for shareholders. Transparency has to be better numbers on a sheet. 1. How many shareholders on record are registered voter were not answered? 2. Was a quorum established was not answered? 3. How many shareholders did actually voted were not answered? 4. What percentage of the voters were established to change policies in the our By-Laws were not answered. This required an actual percentage of shareholders and it was not answered. Yes and no answer was given with numbers of shares but no real clarity to the percentage of shareholders needs to say yes or no. Was there an established % answer? The board and this new board is always secretive to election transparency.