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Residential Real Estate
Nov 22, 2021

Going Virtual for Your HOA’s Annual Meeting? Read This First

Sponsored Content provided by Mike Stonestreet - Founder, CAMS (Community Association Management Services)

As you’ve likely realized by now, virtual meetings are here to stay. And, though you may have mastered platforms like Zoom over the past two years, laws and best practices surrounding virtual meetings (especially annual meetings) for community associations continue to be updated. Here, we’ll dive into the expectations surrounding not only virtual meetings but also voting, electronic ballots, in-person meetings in the age of Covid, and what your board should do to ensure you’re running your annual meetings efficiently and in compliance with the law.

State Laws Surrounding Virtual Meetings
Though some state laws and governing documents mentioned virtual meetings before the onset of Covid, the pandemic brought about more specific guidance. For example, in North Carolina, House Bill 320 was signed by the governor in September 2021, allowing for virtual membership meetings to continue after the state of emergency (which allowed virtual membership meetings under Covid) expired. However, the bill explicitly states NC associations may hold membership meetings virtually unless the governing documents prohibit them.

South Carolina’s laws are more flexible than those in NC. For example, SC Code 33-31-701 only states that meetings are required to be held at a time and place “fixed in accordance with the bylaws”. This is a common occurrence with South Carolina community associations – practices addressed by state laws in NC defer to the authority of each association’s governing documents in SC.

Other “Musts” For Virtual Annual Membership Meetings
If you’re thinking there are probably more rules surrounding virtual membership meetings, well, you’re right! Simply sending a Zoom link to the members with a date and time will not be sufficient to conduct your annual meeting properly. After all, you must ensure that only members attend, account for proxies, verify that the participating members constitute a quorum, and provide members with a reasonable opportunity to participate.

For smaller associations, verifying the identity of participants in a virtual meeting may be relatively easy – you could have someone check participants in as they enter the Zoom meeting. For larger associations, you can send unique meeting URLs to the designated email addresses (we’ll discuss these further in a moment) you have on file to satisfy verification requirements.

How do you provide members a “reasonable opportunity to participate”? There’s that word reasonable again. What is considered reasonable, and how do you do this in a virtual setting? A general best practice is to not go crazy with the mute button or solely rely on the chat function. Many virtual meeting platforms such as Zoom have a “raise your hand” option that allows members to indicate they have something to say and be called on accordingly, allowing them to participate without having the meeting devolve into chaos.

It’s a good idea to ask members to submit their questions in writing before the meeting, as this will allow your board to prepare responses and answer the most common questions.

When conducting virtual meetings, many of the best practices you’d apply in an in-person meeting can be employed here too. Our favorite guide (and by now, probably yours too!), Robert’s Rules of Order, can still be adhered to in a virtual meeting. Plan ahead, stick to an agenda, determine how people will be called on to speak, and any time limits on speaking. If you are sure to keep the meeting on task and organized, it will be as well run as if it were conducted in person. Your board should consult with your association’s attorney when planning a virtual meeting as they can assist with developing meeting rules that comply with the association’s governing documents and state laws.

Electronic Notice
We’ve discussed the ins and outs of virtual meetings, but you have to tell the members it’s occurring, or they probably won’t show up. Providing the membership with notice of the annual meeting is another topic addressed in NC HB 320. Electronic notice is allowed, but some very specific requirements must be met for this method to be considered valid.

Firstly, if a member receives notice electronically, they must designate an email address to the association. How do they do this? There are a few ways. Suppose an owner has provided an email address to receive communications from the association, access an online portal, or conduct any other business with the association. In that case, that may be considered a designated email address.

The association must notify members how they can update their information or ask to opt out of receiving electronic notices.  Alternatively, communication could be sent to the email addresses the association has on file, asking members to opt-in to electronic notices. This registration list will need to be maintained and updated every time someone moves or changes their email address, which can become quite taxing.

However, the problem with the opt-in method is that most people are inundated with dozens of emails daily and may not see or respond to the request. So, if you’re considering having members opt-in, you must come up with a way to notify them of such and give them a way to update their information if needed. Further, if members have the option to opt in to receive a communication, they must also be given the option to opt-out.

You should communicate to members how they can opt-out of these communications by adding a disclaimer, the management company’s contact information, or an unsubscribe button. Finally, NC HB 320 also allows for a hybrid option – those who want to receive the notice electronically can do so, and those who prefer mailed notices still have that option.

South Carolina’s laws on meeting notice aren’t very restrictive – in fact, they don’t speak much on it at all. There is no obligation to designate email addresses, just a requirement that members receive the notices. In most cases, though, meeting notices are sent by mail, and the meeting itself can be held in person or electronically.

When a virtual membership meeting is held, voting can be conducted a few ways, and this, of course, depends on your state statutes and governing documents. However, your association chooses to handle voting, there are some best practices your board can follow to make the process more streamlined and help ensure the authenticity of the election results.

Voting Before or After the Meeting
In both North and South Carolina, community associations can conduct voting by written ballot either before or after the annual meeting, and this voting can be done electronically or via mail (or using a combination of both) as long as a few requirements are met. Firstly, you’ll need to ensure that the electronic votes are associated with the designated email addresses we spoke of earlier for those using the electronic option.

So, is voting before or after the meeting better? That depends on a few factors, though neither is inherently better than the other. If you’re electing new board members, for example, but don’t have many candidates, you may want to hold the vote after the meeting and use the meeting itself to encourage members to run, accept nominations, and allow members to meet the candidates. Going this route can bolster voting participation as members will have heard directly from the candidates and had a chance to form opinions, thus increasing the likelihood they’ll want those opinions to be heard.

If you choose to do voting beforehand, you can send out ballots alongside your notice, provide a deadline by which they must be returned, and announce the results at the meeting. When conducting voting before the meeting, start the nominations process as early as possible. This method will allow members ample time to fill out and return their ballots amid their busy lives.  The process of soliciting nominations via a “call for candidates” notice may or may not meet the association’s bylaws’ nominating requirements – always be sure to check with an attorney.  

Voting During a Virtual Meeting
Though voting during a virtual meeting is allowed, it can get a bit complicated. Much like taking attendance at the meeting, you must have a way to verify that each person voting is a member, that no duplicate votes are being cast, and have a way to accept and account for proxies. Proxies are particularly important here as they may be assigned to someone who is not an association member, or the proxy may be designated on behalf of a member who isn’t tech-savvy and therefore is relying on a neighbor to cast their vote. This example falls into the “reasonable opportunity to participate” we discussed earlier – the use of the proxy would be that member’s opportunity to participate in the meeting.

Further, you must verify that the present members constitute a quorum and, again, provide members that “reasonable opportunity to participate”. Does the law ever tell us what that actually means? No, it doesn’t, but they sure like to say it a lot. A good rule of thumb is that members must be able to participate in virtual meetings, virtual voting, etc., to the same extent that they would if the meeting were being conducted in person.  

Covid-related Changes to In-Person Meetings
Yes, we’re all beyond tired of talking about Covid and the “new normal” (can we even call it that anymore?). Still, the fact of the matter is we should probably stop anticipating that it will magically disappear. So, if you are holding your meetings in person, there are things your board should take into consideration to ensure that members feel comfortable attending. Communicate meeting protocols prior to the event – let members know if masks and social distancing will be required. It’s also a good idea to make things like masks and hand sanitizer readily available for those who would like to use them. While a hybrid meeting may sound like a good idea, it generally does not work well if some attendees are in-person and others participate virtually.

Though we may think of gathering restrictions as something new, they really aren’t – we’ve always had fire codes and capacity limits in public spaces. So, a good rule of thumb is to pay attention to the capacity limit of wherever you have your meeting. What if your membership is larger than the fire capacity? Have the meeting in a larger venue.

In some ways, the increased use of virtual meetings may sound like it has complicated the idea of meetings, but it hasn’t. Instead, virtual meetings have provided an excellent platform for more efficient meetings and increased participation by allowing members to join the meeting from wherever they are. And, now that virtual meetings have become so mainstream, state laws are being updated to accommodate them, making it more clear what community associations are and aren’t allowed to do.

By staying up to date on state statutes and being intimately familiar with your governing documents, running your annual meetings, whether virtually or in person, is sure to be a success. And, if you’re questioning whether a component of your meeting is legal, reach out to the professionals. Your community manager or attorney can assist you and your fellow board members in ensuring that your next annual meeting is productive and beneficial to the community and all its members.

Mike Stonestreet, CMCA, PCAM, AMS, is Founder/Co-Owner of CAMS (Community Association Management Services). CAMS began in 1991 with Stonestreet and a few employees in a small office in Wilmington but has since grown to over 300 employees serving eight regions across North and South Carolina.

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