Published on: November 28, 2016
Condominium homeowners’ associations throughout Massachusetts have struggled with attendance and participation at unit owner meeting, and to some extent at board meetings as well. The selection of an arbitrary place and time for a community of homeowners to convene for their annual meeting, each with conflicting schedules, seems almost archaic in the advent of digital communication technologies such a Skype, Go-To Meeting, and Facetime. The Massachusetts Condominium Act, M.G.L. c. 183A, does not address the specifics of Board meetings and Unit Owner meetings, and is silent on the prospect of holding virtual meetings. Interestingly, since 2004 Massachusetts Corporations have been explicitly allowed to utilizes virtual technology for both shareholder meetings and board of director meetings under the Massachusetts Business Corporations Act, M.G.L. c. 156D. And in states like Florida, homeowners’ associations have been explicitly granted the authority by the Florida Condominium Act to hold both unit owner and board meetings in electronic form.
Are Massachusetts condominium owners being left behind in the digital age? And for those communities that wish to bring their meetings into the digital age, what are they permitted to do now with technology that will have legal authority?
In Massachusetts, there is no provision in the Condominium Act nor any case law that explicitly says it is okay to hold virtual-electronic formed meetings, either unit owner meetings or board meetings. However, there similarly is no law that say you cannot do this. Given the lack of authority providing guidelines for condominiums in Massachusetts, one must look at the governing documents of their community. If the governing documents explicitly prohibit electronic participation in meetings, or require a specific physical location to be noticed for a meeting, then those provisions control. And even if the governing documents do contain a mandate for a noticed location for the annual unit owners’ meeting, what is to say that virtual attendance at such a meeting cannot supplement the physical-in person meeting that is required by the governing documents?
Without the express authority from a statute or case law, certain actions will always be susceptible to challenge. However, the Massachusetts Condominium Act has repeatedly been classified as an “enabling statute” that sets out the framework for the development of condominiums in Massachusetts, while providing developers and unit owners with planning flexibility. If a board and unit owners desire to adopt out detailed guidelines for electronic participation in both unit owner meetings and at board meetings, by amending their governing documents, there is a strong argument to support the validity of such an amendment. But with the introduction of a Technology Amendment to be applied to a community’s meeting procedure, one will want to narrowly tailor the guidelines both to meeting that community’s particular needs, and to ensure basic security and protection from fraud.
As an example, the Massachusetts Business Corporations statute requires that, unless the corporation’s governing documents provide otherwise, a board of directors may permit electronic participation at board meetings by which they all can hear each other during the meeting. So a telephone conference call can suffice in that case. However this may not effectively equate to a shareholder meeting of that corporation, or a unit owner meeting of a condominium. The section of the Massachusetts Business Corporations statute that details the requirements of remote participation in a shareholders’ meeting provides a functional model for how a Technology Amendment could be drafted for a condominium association’s unit owner meetings. While originally enacted in 2004, the intent of the section was to provide a framework that could evolve over time with the creation of new technologies. The statute states that unless the governing documents provide to the contrary, and the board of the directors authorizes such remote participation, a meeting may be conducted solely by remote communication, provided that there is a reasonable means to verify that each person deemed present at the meeting is permitted to vote, that everyone is provided a reasonable opportunity to participate in the meeting and vote, including an opportunity to read or hear the proceedings, and that a record of the votes or any other action shall be kept and maintained. While seemingly rudimentary in its requirements and consistent to the Massachusetts Electronic Signatures Act, it is certainly a good foundation to begin with when analyzing what may be acceptable in Massachusetts as it applies to Condominium law.
More recently in 2015, Florida’s Condominium Act adopted detailed provisions allowing for, and outlining electronic voting. The statute affirmatively requires the By-Laws of a condominium to allow board meetings to be conducted via telephone or other electronic means, and allows for the option to have unit owner voting via electronic based voting systems. A unit owner voting electronically is counted as being in attendance at the unit owner meeting for the purposes of determining a quorum. The specific requirements of the statute hold that an association must be able to authenticate the unit owner’s identity, ensure the electronic vote is not altered, provide a receipt to the unit owner of their casted vote, and the electronic voting records must be retained and stored for review purposes while keeping the privacy of the unit owner. All fairly standard requirements that would be logical inclusions in an amendment to a community’s governing documents, however, the practice of electronic participation in meetings can be just as contentious as the substance of the meetings themselves.
In the context of an annual unit owners’ meeting, should the community elect to have an all remote access meeting, with no physical place for the meeting, or a hybrid model, with a physical meeting taking place that is supplemented with participation with those attending virtually? Virtual attendance in any form will likely increase the participation of more homeowners, while at the same time decreasing the predictability of those meetings. Will an all virtual meeting be too chaotic to accomplish anything? Or will the virtual attendance of the many make it easier for those physically present to control the outcome of the meeting and the votes? Further, a unit owner that does not participate in a vote is casting a no-vote by default. Certain members of the community often rely on low participation at meetings to maintain an advantageous status quo, and may likely challenge the entire validity of the virtual-meeting practice as soon as it works to their disadvantage.
It will be interesting to see how community associations alter their own governing documents to allow for the inclusion of technology into their meeting practices and what successes and failures they experience. In an ever expanding virtual and remote world, is a face-to-face conversation amongst neighbors really a thing of the past, or will technology bring communities closer together and encourage new conversations to take place? Only time will tell.