Even during times of a state and/or federal emergency such as the COVID-19 pandemic, it is important for a common interest community association to keep functioning in order to promote and protect the health and safety of its residents and their financial interest in their homes. Some would argue that this is especially important during such times.
In order to comply with their fiduciary duty to their association members and residents, executive boards must periodically meet to discuss the issues facing their communities, both ordinary and extraordinary, make decisions that they consider to be in the best interests of their association members, and take action to implement those decisions. While New Jersey state law allows executive boards to conduct “work sessions” to which members are not invited, the law requires that nearly all such decisions and actions are only valid if made at a meeting for which the membership received adequate notice and were invited to attend. There are a few statutorily limited exceptions to this requirement involving confidential matters.
In times like these, how is a board to conduct an “open” meeting in order to conduct the business of the association? As has been said before, extraordinary times demand extraordinary measures. To find the answer we must look to applicable state law and the association’s governing documents, and be creative. In this technologically advanced age, it is possible for many people to join together remotely in conference telephone (audio) calls, and also internet-based video meetings (e.g. Zoom, WebEx). Are these meeting methods recognized by state law and thus valid?
A review of applicable state law reveals that it has not yet fully caught up to the technological advances noted above as neither the N.J. Condominium Act nor the N.J. Planned Real Estate Development Full Disclosure Act addresses virtual/remote attendance at meetings. The N. J. Nonprofit Corporation Act, on the other hand, does authorize trustees or directors to “participate” in executive board meetings by “conference telephone or any means of communication by which all persons participating in the meeting are able to hear each other…”, but it doesn’t specifically address whether members of the association may do so. In the meantime, what to do?
We recommend that if an open executive board meeting is required for the board to address pressing association business that can’t wait until the ban on public gatherings is lifted, the board should set up the capability to conduct their meeting remotely, by either conference audio telephone call, or internet-based video conferencing, or both. In this way the members of the association will be able to “attend” these meetings and hear and/or see what decisions and actions are being made by their board, thereby rendering those decisions and actions valid and enforceable.
Regarding membership meetings, the law is not so clear. In response to the COVID-19 pandemic, on March 20, 2020, New Jersey’s Governor Murphy signed into law a bill (A3861/S2290) which permits corporations to hold meetings with their shareholders/members by remote communication during states of emergency. This law, however, only applies to “for profit” corporations in New Jersey organized under Title 14A of the N.J. Statutes. Most condominium and community associations in New Jersey are “nonprofit” corporations organized under Title 15A, so this new law does not expressly apply to them. Efforts are being made to introduce a bill that would extend these 14A provisions to 15A corporations.
While the law of New Jersey does not yet recognize such virtual participation in Title 15A meetings, it is a reasonable argument to make, under the circumstances of a statewide and nationwide emergency, that the new law recognizing such meetings of Title 14A corporations should logically apply by analogy to those of Title 15A corporations also. It is also suggested that the association’s bylaws be amended to include a provision recognizing a member’s ability to “attend” board meetings and membership meetings virtually by conference calls or other electronic means, to avoid such a situation entirely in the future.