“Technology now allows people to connect anytime, anywhere, to anyone in the world, from almost any device. This is dramatically changing the way people work, facilitating 24/7 collaboration with colleagues who are dispersed across time zones, countries, and continents.” –Michael Dell, Dell Technologies.
Prior to the COVID-19 pandemic, many people never made use of the built-in cameras in their laptops, tablets and cell phones. Now, the world has changed. It seems that everyone is using video capabilities and connecting remotely, whether it is for social, family or work events. So, what about your homeowner association?
Does the law allow homeowner association meetings to be conducted remotely using video platforms like Zoom, Microsoft Teams or Webex? The answer to this question lies within the governing documents of your association. Prior to scheduling virtual meetings, your association should make sure it has the authority to hold meetings virtually. Most association bylaws contain information regarding how association meetings must be conducted, including required notice periods, quorum requirements, meeting location information, and other guidelines. The association, or its legal counsel, should review the bylaws to determine the meeting requirements for board meetings and member meetings. If the bylaws require in-person meetings, the association should determine whether or not these meeting are feasible or permissible in light of government orders prohibiting social gatherings.
In the event that your governing documents do not prohibit virtual meetings or require in person meetings, then your association can rely on Minnesota Statutes, which contain provisions allowing for electronic meetings. The Minnesota Nonprofit Corporation Act, Chapter 317A of Minnesota Statutes (the “Nonprofit Act”), allows for board meetings and member meetings to be held electronically, subject to certain requirements.
Board Meetings
Minnesota law does allow for electronic board meetings. Section 317A.231, subd. 2 of the Nonprofit Act allows board meetings to be held solely by means of remote communication. Specifically, the statute provides as follows:
317A.231, Subd. 2 Meetings solely by means of remote communication. Any meeting among directors may be conducted solely by one or more means of remote communication through which all of the directors may participate in the meeting, if the same notice is given of the meeting required by subdivision 4, and if the number of directors participating in the is sufficient to constitute a quorum at a meeting. Participation in a meeting by that means constitutes presence at the meeting.
317A.231, Subd. 4 Calling meeting; notice. (a) Unless the articles or bylaws provide otherwise, a director may call a board meeting by giving five days’ notice to all directors of the date, time, and place of the meeting…
(c) Any notice to a director given under any provision of this chapter, the articles, or the bylaws by a form of electronic communication consented to by the director to who the notice is given is effective when given. The notice is deemed given if by: (1) facsimile communication, when directed to a telephone number at which the director has consented to receive notice; (2) electronic mail, when directed to an electronic mail address at which the director has consented to receive notice; (3) a posting on an electronic network on which the director has consented to receive notice, together with a separate notice to the director of the specific posting, upon the later of: (i) the posting; or (ii) the giving of the separate notice; and (4) any other form of electronic communication by which the director has consented to receive notice when directed to the director. An affidavit of the secretary, other authorized officer, or authorized agent of the corporation, that the notice has been given by a form electronic communication is, in the absence of fraud, prima facie evidence of the facts stated in the affidavit. (d) Consent by a director to notice given by electronic communication may be given in writing or by authenticated electronic communication. Any consent so given may be relied upon until revoked by the director, provided that no revocation affects the validity of any notice given before receipt of revocation of the consent.
Minn. Stat. Section 317A.231, Subd. 4.
Based on the language of the Nonprofit Act, I recommend that an association’s board solicit consent from each board member allowing for their individual acceptance of meeting notices electronically. Assuming that there is no prohibition in the bylaws and that each board member consents to electronic notices, then the board can conduct its meetings by electronic means.
For those communities governed by Minnesota Statutes Chapter 515B, the Minnesota Common Interest Ownership Act (MCIOA), board meetings must generally be open to association members. Therefore, if the board of an association governed by MCIOA opts to hold meetings electronically, the board must also make arrangements for owners to attend that meeting as well.
Member Meetings
The Nonprofit Act also allows for member meetings to be held electronically, including annual meetings, subject to certain requirements. Specifically, Section 317A.431, subd. 3 states as follows:
Subd. 3. Time; place. An annual meeting of members must be held at the time and place stated in or fixed in accordance with the articles or bylaws. If a place is not stated or if a demand for a meeting is made under subdivision 2, the meeting must be held in the county where the corporation’s registered office is located. To the extent authorized in articles or bylaws, the board of directors may determine that an annual meeting of the members shall be held solely by means of remote communication in accordance with section 317A.450, subdivision 2.
Minnesota Statutes Section 317A.431, Subd. 3. (Emphasis added.)
In turn, Section 317A.450 of the Nonprofit Act, cited in the above section of the Nonprofit Act, provides, in pertinent part:
317A.450 Remote communications for member meetings.
Subdivision 1. Construction and application.
This section shall be construed and applied to:
(1) facilitate remote communication consistent with other applicable law; and (2) be consistent with reasonable practices concerning remote communication and with the continued expansion of those practices.
Subd. 2. Member meetings held solely by means of remote communication.
To the extent authorized in the articles or bylaws and determined by the board, an annual or special meeting of members may be held solely by one or more means of remote communication, if notice of the meeting is given to every member entitled to vote, and if the number of members with voting rights participating in the meeting is sufficient to constitute a quorum at a meeting. Participation by a member by that means constitutes presence at the meeting in person or by proxy if all the other requirements of section 317A.453 are met.
Subd. 3. Participation in meetings by remote communication.
To the extent authorized in the articles or bylaws and determined by the board, a member not physically present in person or by proxy at an annual or special meeting of members may, by means of remote communication, participate in a meeting of members held at a designated place. Participation by a member by that means constitutes presence at the meeting in person or by proxy if all the other requirements of section 317A.453 are met.
Subd. 4. Meetings held by remote communication; participation.
In any meeting of members held solely by means of remote communication under subdivision 2 or in any meeting of members held at a designated place in which one or more members participate by means of remote communication under subdivision 3:
(1) the corporation shall implement reasonable measures to verify that each person deemed present and entitled to vote at the meeting by means of remote communication is a member; and (2) the corporation shall implement reasonable measures to provide each member participating by means of remote communication with a reasonable opportunity to participate in the meeting, including an opportunity to:(i) read or hear the proceedings of the meeting substantially concurrently with those proceedings; (ii) if allowed by the procedures governing the meeting, have the member’s remarks heard or read by other participants in the meeting substantially concurrently with the making of those remarks; and (iii) if otherwise entitled, vote on matters submitted to the members.
Subd. 5. Notice to members.
(a) Any notice to members given by the corporation under any provision of this chapter, the articles, or the bylaws by a form of electronic communication consented to by the member to whom the notice is given is effective when given. The notice is deemed given: (1) if by facsimile communication, when directed to a telephone number at which the member has consented to receive notice; (2) if by electronic mail, when directed to an electronic mail address at which the member has consented to receive notice; (3) if by a posting on an electronic network on which the member has consented to receive notice, together with separate notice to the member of the specific posting, upon the later of: (i) the posting; and (ii) the giving of the separate notice; and (4) if by any other form of electronic communication by which the member has consented to receive notice, when directed to the member. An affidavit of the secretary, other authorized officer, or authorized agent of the corporation, that the notice has been given by a form of electronic communication is, in the absence of fraud, prima facie evidence of the facts stated in the affidavit.
(b) Consent by a member to notice given by electronic communication may be given in writing or by authenticated electronic communication. The corporation is entitled to rely on any consent so given until revoked by the member, provided that no revocation affects the validity of any notice given before receipt by the corporation of revocation of the consent.
(Emphasis added.)
These provisions of the Nonprofit Act do allow for electronic meetings of the board and the members provided that the governing documents allow for such meetings and the board members and members consent to the receipt of notices for such meetings. Due to the technical nature of the requirements of the Nonprofit Act, any association considering the adoption of electronic meetings is strongly encouraged to consult with legal counsel to confirm that all legal requirements are met so that the meetings and business conducted at those meetings are not subject to challenge. Many associations have asked us to assist them with drafting their meeting notices, consent forms and other documents necessary to comply with applicable law. We would be happy to assist any association with these issues.
David G. Hellmuth is a partner and founding member of the law firm, HELLMUTH & JOHNSON, PLLC. Hellmuth obtained his juris doctorate degree and is a cum laude graduate of the William Mitchell College of Law. He completed his undergraduate studies at the University of Minnesota and is a member of the Minnesota State Bar Association and the Hennepin County Bar Association. Hellmuth is licensed to practice law in the state and federal courts in the state of Minnesota.
Hellmuth concentrates his practice in the areas of community association law, with an emphasis in the representation of condominium and townhouse associations, builders, developers, financial institutions and other real estate organizations. Hellmuth also practices in the areas of real estate law and development, business and corporate law, creditor remedies, creditor bankruptcy law, banking law, litigation and construction law.
