By Ronald L. Perl, Esq. CCAL

How to Sort Out the Legal Requirements for the Various Types of Association Meetings

In Part I, we discussed the difference between board meetings and membership meetings. We also described the difference between business meetings of the board, workshops, and executive sessions. Now we can focus on the specific matters that are deemed confidential by New Jersey law, which can be the subject of executive sessions for the purpose of both discussion and decision making.

Statutory open meeting requirements are found in both the New Jersey Condominium Act and the Planned Real Estate Development Full Disclosure Act (PREDFA). PREDFA requires an association’s by-laws to include:

A requirement that all meetings of the executive board, except conference or working sessions at which no binding votes are to be taken, shall be open to attendance by all unit owners, and adequate notice of any such meeting shall be given to all unit owners in such manner as the bylaws shall prescribe; except that the executive board may exclude or restrict attendance at those meetings, or portions of meetings, dealing with (1) any matter the disclosure of which would constitute an unwarranted invasion of individual privacy; (2) any pending or anticipated litigation or contract negotiations; (3) any matters falling within the attorney-client privilege, to the extent that confidentiality is required in order for the attorney to exercise his ethical duties as a lawyer, or (4) any matter involving the employment, promotion, discipline or dismissal of a specific officer or employee of the association.

The Condominium Act’s provision is very similar and contains the same exceptions.

By Ronald L. Perl, Esq. CCAL

How to Sort Out the Legal Requirements for the Various Types of Association Meetings

Since the early 1990s, community associations in New Jersey have been legally required to operate “in the sunshine” by virtue of amendments to the Condominium Act, the Planned Real Estate Development Full Disclosure Act (PREDFA), and regulations promulgated by the Department of Community Affairs. Many board members are still confused about the types of meetings that associations conduct as well as the characteristics and legal requirements of each. This blog is about the different types of meetings. In future blogs, the legal requirements for notice of meetings and proper meeting minutes will be discussed.

It is important initially to distinguish board meetings from membership meetings. Membership meetings are those meetings authorized or required by the governing documents at which the unit owners or homeowners are the decision-makers. The most obvious example of a membership meeting is the annual meeting, where the members decide who will be elected to the board of trustees/directors. Meetings where owners vote on a proposed by-law amendment or the approval of a capital improvement project are other actions taken at membership meetings. The governing documents generally specify the issues for which owner approval is necessary. In some associations, the annual meeting is the only required membership meeting, but most documents also provide for special meetings of the members to be called by the board or by petition of the members to deal with specific issues. Because meetings of the members are “open” by definition, community association open meetings laws do not address membership meetings but rather concern meetings of the governing board.

Board meetings are those at which the decision-making body is the board of directors or trustees. Just as the governing documents define those questions or decisions reserved to the members, they define the authority of the board to act as well. For example, the authority to make rules, enter into contracts, hire employees, and determine the annual assessment generally is granted to the board by the master deed (or the declaration) and by-laws.

There are three basic types of board meetings: (1) business (open) meetings; (2) work sessions; and (3) executive (closed) sessions. Each type of meeting may be “regular” (periodic and regularly scheduled) or “special” (called when there is a special need or emergency between regular meetings).

By Ronald L. Perl, Esq. CCAL

The Radburn Law provides that New Jersey community associations must accept nominations to an association’s board of directors/trustees “as long as the nomination is made prior to the mailing of ballots or proxies to the association members[.]” It also states that the mailing cannot occur earlier than the day after the nomination deadline, if there is one, or, if no deadline was set, “the business day prior to the actual mailing.” To compound problems, Radburn requires that the notice of the election include a proxy and absentee ballot, which lists the candidates in alphabetical order.

I can only assume that the drafters of this provision did not consider that it takes time for many associations to draft these documents, then print and get them ready for mailing. Large scale associations must mail well over 1,000 sets of election notices with enclosures. In many cases, it takes more than one day to make them ready to be picked up or transported to the Post Office. So what happens three days after the nominations deadline when everything is printed, the envelopes are stuffed and addressed, and a person arrives at the association office with a self-nomination form? According to Radburn, it all has to be redone. If you reject the nomination as untimely, you run the risk of the entire process being invalidated. Frustrating, isn’t it?

This impractical provision needs to be amended. Why not amend the call-for-nominations provision of Radburn to require setting a deadline and providing that no nomination can be accepted more than the third business day after the deadline? Isn’t that fair to everyone?

In the meantime, what can we do? For one thing, nothing in the law requires all notices and other documents to be mailed at the same time. So I have suggested that associations be prepared to include a nomination cut-off date in their procedures and at least begin the mailing process on the next business day. Have a reasonable number of envelopes and notices ready so all you will need to do is print the necessary number of absentee ballots and/or proxies. That number will depend on the size of the association; you want it to be the number that can reasonably be done that day. Remember, just imposing a nomination deadline is not enough. Even if you have one, the critical cut-off is the actual mailing date.

For more information on this or any other issue concerning your community association, please contact one of our Community Associations attorneys. For breaking news or updates on new blog posts, follow us on Twitter at: @njcondolaw.

By Ronald L. Perl, Esq., CCAL

For many years now, I have been convinced that electronic voting in community associations was inevitable. There is no doubt that electronic voting would make life easier for community managers, board members, and homeowners. When my clients were making by-law changes, I drafted amendments for associations that would take effect when the eventual change occurred. With the enactment of the Radburn Law, that change has now occurred and associations have the ability to adopt electronic notice and voting provisions. In my opinion, too few associations have taken advantage of this opportunity.

Electronic voting is sometimes misunderstood. It is not voting by e-mail. Rather, electronic voting means that ballots are cast on-line or through other electronic means and delivered directly to an association through a website or other secure service or program prior to a meeting. Notices are similarly handled on-line. For years, corporations have conducted elections electronically and the technology is readily available and at little cost for use by associations.

Electronic voting is more secure than using paper ballots, proxies, and absentee ballots. Verification of identity is provided. Results are available more quickly. Voter identity is protected (i.e., secret ballots). Weighted voting (different percentages for different units) is made easier. Even associations with fractional voting can be accommodated. There is greater confidence in the election process, since the collection and tabulation of votes is not handled either by management or the board. The process can result in cost savings for many associations.

In order to implement electronic notice and voting, associations will need to amend their by-laws. The good news is that the “reverse amendment” or “rejection vote” process in the Radburn Law is available for this task. Here is what Radburn specifically requires regarding electronic notice and voting: