Big Changes to Condominium and Homeowners’ Association Elections are Coming This Summer: Part I
New amendments to the Pennsylvania Uniform Condominium Act and Uniform Planned Communities Act (“UPCA”) will make huge changes in the way communities hold meetings and elections. These Amendments are found in House Bill 1795 (Act 115 of 2022). Some of these changes make it easier to hold meetings and vote electronically. Others will make it more difficult – and potentially more expensive – to hold elections. The new requirements take effect on May 3, 2023. Here is a summary of the changes.
The Problem with Electronic Notice and Virtual Meetings
During COVID, most Communities wanted to have virtual meetings and elections. And they wanted to be able to vote without an actual physical ballot or proxy. The problem is that most bylaws are very specific about holding election meetings in person, and having votes cast in person or by proxy. The same requirements apply to giving notice for meetings. Most people would prefer getting notice by email, but most bylaws call for written notice.
Even though the Pennsylvania Business Corporation Law allows alternate ways to meet, many people (including me) are uncertain whether the specific language in the bylaws needs to be followed. In many communities that staged virtual meetings and elections, the outcomes were challenged by people who insisted they had to be in person, or that notice needed to be written. For the last few years, lots of communities sent out electronic notices, and held meetings and elections over Zoom. But none of us have been completely comfortable doing these things.
Permission for Electronic Notice and Virtual Meetings
The best thing that Act 115 does is give formal permission for electronic notice and virtual annual meetings. Section 3308(a) of the Condominium Act (5308(a) of the UPCA) says:
The notice of a meeting may be delivered by electronic means if the unit owner has agreed in writing to accept the notice by electronic means or where the bylaws permit electronic notices.
This means that an association can keep a record of who wants to receive electronic notice, and who does not. Keep in mind that unit owners need to “opt in” to electronic notice.
Act 115 also formally permits virtual annual meetings. It says:
Use of remote technology.–Except as otherwise provided in the bylaws, an individual may participate in a meeting of the executive board or association by means of a conference telephone or other remote electronic technology, including the Internet, which allows participants in the meeting to hear each other. Participation in a meeting as authorized under this subsection shall be deemed in-person attendance at the meeting.
Permission for Electronic and Absentee Voting
Many associations have a problem with the difference between a “proxy” and an “absentee ballot.” Many unit owners would just like to fill out a ballot and drop it at the community building or email it to the property manager. Act 115 allows electronic and absentee ballots. It says:
Approved methods of voting.–The voting rights of a unit owner may be cast or given in the following ways: in person or by proxy at a meeting of the association or by absentee or electronic ballot. An absentee or electronic ballot may:
- be counted as a unit owner present and voting for the purpose of establishing a quorum, and otherwise, only for agenda items appearing on the ballot.
- not be counted even if properly delivered, if the unit owner attends the meeting to vote in person. A vote cast at a meeting by a unit owner supersedes a vote submitted by absentee or electronic ballot previously submitted.
The practical question is “How reliable is an electronic ballot?” The amendments say:
The term “electronic ballot” means a ballot cast or given by electronic transmission over the internet, vote management system or the Association’s community network, whether by direct connection, intranet, telecopier, electronic mail or other technological means, if the identity of the Unit Owner submitting the ballot can be confirmed and a receipt of the electronic transmission and ballot can be made available to the Unit Owner.
These last parts – confirming the identity of the unit owner and providing a receipt, might take some work. If a unit owner is emailing a ballot, it is easy enough to confirm their identity and provide a receipt. But if the meeting was held on Zoom, that might be much more difficult.
Finally, the Act also allows for election by “acclamation” if only one person is running. It says:
Acclamation.– In the event that an election for a position on the Executive Board is uncontested, the officer or chair presiding at the election meeting may declare the nominee elected by acclamation after determining there are no further nominations.
Help to Achieve a Quorum for Elections
Act 115 may also help associations who have difficulty getting a quorum for their meetings. The amendments provide that if an association fails to get a quorum at two “subsequent” (which is probably not the word they were looking for) meetings, it can establish a quorum according to §5756 of the Corporation Law. This section says that whoever shows up for a meeting that has been adjourned for lack of a quorum gets to be counted as a quorum.
This means that an association can try two times to get enough people out to vote. If they cannot establish a quorum, then they can hold a third meeting. At that third meeting, anyone who shows up counts as a quorum. Of course, holding three meetings seems like a lot of work (and it is). But with electronic notice, it can help associations that have not held elections for years actually have a legitimate election.
The changes that I have discussed in this article are all positive. They allow the association to be flexible in holding their meetings and gathering votes. Act 115 gives permission for associations to hold meetings the way that they want to, or gives them cover for the way they have been doing things since the start of COVID.
In Part Two of this article, I will go over some of the ways that Act 115 makes things harder, more costly, or potentially more controversial for associations.