By Bujar Ahmeti, Esq. and Timothy Moeller, Esq., Moeller Graf, P.C.
What many community association members in Colorado believed would be temporary measures to accommodate social distancing guidelines due to the COVID-19 pandemic have since become standard operating procedures for those same community associations. Even as the emergency orders were lifted and the restrictions on in-person gatherings expired, the ease and convenience of conducting meetings virtually has been one byproduct of the COVID-19 pandemic that is here to stay.
Administering a Virtual Meeting
The Colorado Common Interest Ownership Act (“CCIOA”) does not have any specific provision that addresses electronic or virtual meetings. The Colorado Revised Nonprofit Corporation Act (“Nonprofit Act”), in C.R.S. § 7-127-108, provides that:
“Unless otherwise provided in the bylaws, any member may participate in an annual, regular, or special meeting of the members by, or the meeting may be conducted through the use of, any means of communication by which all persons participating in the meeting may hear each other during the meeting. A member participating in a meeting by this means is deemed to be present in person at the meeting.”
The Nonprofit Act, unlike CCIOA, expressly allows for virtual or electronic meetings as long as there is not any prohibitive language in the community association’s bylaws. The first step is to check the governing documents, especially the bylaws, to determine if there is any language that would prohibit the community association from conducting a virtual or electronic meeting. If not, then any platform chosen (e.g., Zoom, Microsoft Teams, etc.) must allow all persons attending the meeting to hear each other during the meeting.
While CCIOA does not address electronic or virtual meetings, it does require that certain information be included in any meeting notice for a valid meeting to be held. C.R.S. § 38-33.3-308(1), states that any member meeting notice include “the time and place of the meeting and items on the agenda.” This requirement of a “place” for the annual meeting does not completely align with the idea of everyone attending a meeting from the comfort of their own home. Whether “online” is considered a place for purposes of the statute has not been tested in court. Thus, some Associations try to satisfy this requirement by holding a “hybrid” meeting that consists of the Association naming a “place” in the meeting notice (e.g., the clubhouse for the Association, the address for the management company, etc.) where a board member or the community manager is physically present and all other owners attend virtually.
Voting at an Electronic or Virtual Meeting
While conducting and attending electronic or virtual meetings can be quite convenient for the membership, conducting a vote during an electronic or virtual meeting may sometimes be anything but convenient. In some instances, an actual vote may not be necessary if the meeting is to ratify a budget and the number of attendees does not reach the voting threshold to veto the budget or it is a board election where the number of candidates equals the number of vacant positions.
However, if the need to hold a vote is required, then the community association will want to ensure that it has implemented a system to accept and verify proxies prior to the commencement of the meeting. C.R.S. § 38-33.3-310(2)(a) provides that “votes allocated to a unit may be cast pursuant to a proxy duly executed by a unit owner.” The Nonprofit Act, in C.R.S. § 7-127-203(2), provides broad authority for a member to designate a proxy. Prior to the date of the electronic or virtual meeting, the association will want to ensure there is an internal procedure in place to accept and validate any submitted proxies.
Prior to the rise in popularity of electronic and virtual meetings, many associations conducted any necessary vote(s) that occurred outside of a physical meeting by utilizing a mail-in ballot. To that end, C.R.S. § 7-127-109 provides that “unless otherwise provided by the bylaws, any action that may be taken at any annual…meeting of the members may be taken without a meeting if the nonprofit corporation delivers a written ballot to every member entitled to vote on the matter.” Similar to the section of the Nonprofit Act that permits electronic and virtual meetings, the first step for an association is to determine if the association’s governing documents permit the use of a mail-in ballot. If so, then the mail-in ballot must contain the following information pursuant to C.R.S. § 7-127-109(4):
1.The ballot must indicate the number of responses needed to meet the quorum requirements;
2.The ballot must state the percentage of approvals necessary to approve each matter other than the election of directors;
3.The ballot must state the time by which a ballot must be received by the nonprofit corporation in order to be counted (typically 60 days or less); and
4.The ballot must be accompanied by written information sufficient to permit each person casting such ballot to reach an informed decision on the matter.
During the height of the COVID-19 pandemic, many associations conducted electronic or virtual meetings (without a vote being held at the virtual meeting) in conjunction with a mail-in ballot to complete an election of directors that was contested (raise your hand if you ever had to utilize the “two-envelope” system for board member elections). However, this process is costly and time consuming. Inevitably, it also led to ancillary issues such as whether or not nominations from the floor would be allowed. These issues, in part, have caused many associations to explore the option of using an on-line voting platform such as VoteHOAnow.com or The Inspector of Elections to name a few.
Initially, it is important to note that neither CCIOA nor the Nonprofit Act contain any statutes that address using an on-line voting platform. The Nonprofit Act permits three (3) different voting procedures:
1.Voting at an annual or special meeting in-person or by proxy;
2.Action by Written Ballot (C.R.S. § 7-127-109); or
3.Action Without Meeting (C.R.S. § 7-127-107).
When a community association’s bylaws do not expressly authorize electronic voting, the association may still be permitted to use an online electronic voting platform if it also complies with C.R.S. § 7-127-109. Under C.R.S. § 7-127-109, the Association would be required to deliver a ballot to each Owner. However, the statute does not address how the delivery must occur. Typically, community associations will meet this requirement by mailing a copy of the ballot to each owner, especially when there are owners without email addresses registered with the association. It will be important for the selected service provider (or the association’s legal counsel) to ensure that their ballot meets the requirements of C.R.S. § 7-127-109 and can be legally delivered to each owner.
The board should be mindful that C.R.S. § 7-127-109(5) provides that, “[u]nless otherwise provided by the bylaws, a written ballot may not be revoked.” In a situation where a ballot is only mailed to the owners, any returned-and-voted ballot cannot not be revoked, and the vote marked on the ballot will be final. If owners are given two methods to cast their ballot, and an owner returns a paper ballot and votes on-line, the association will need to ensure that only the ballot that is received first is counted to ensure compliance with C.R.S. § 7-127-109(5). The instruction on the ballot should be clear that the choice is either electronic or paper, not both.
As community associations continue to utilize technology and electronic platforms to conduct meetings and complete association business, community associations will need to be mindful of the statutes that address meetings. These statutes are in need of an upgrade to keep pace with the changing times. What we can say, with experience, is that the rise of video meetings has dramatically increased owner participation and inclusiveness, and that has been a large step forward in transparency in community association operations.
Moeller Graf, P.C. is a law firm whose practice is dedicated exclusively to providing legal services to Colorado’s community associations. Tim Moeller, Esq. has practiced community association law since 1999 and co-founded Moeller Graf, P.C. with David Graf, Esq. in 2005. Bujar Ahmeti, Esq. is an associate attorney at Moeller Graf, P.C. and has practiced community association law since 2010.
