Big Changes to Condominium and Homeowners’ Association Elections are Coming This Summer: Part II
Act 115 of 2022 will amend the Pennsylvania Uniform Condominium Act and the Uniform Planned Communities Act to change the ways meetings and elections are held. In Part One, I listed many ways that Act 115 will help communities. In this part, I will talk about some of the ways Act 115 may make things more difficult.
Elections in Big Associations
If a community has 500 Units or more, Act 115 will add a lot of “process” to elections. For these bigger communities, all votes need to be submitted to an “independent reviewer.” The independent reviewer needs to count and certify the election results.
An independent reviewer is defined as:
- A person who is selected by the Executive Board and satisfies all of the following:
- Holds a certificate as a certified public accountant issued by the Commonwealth, is licensed to practice law in this Commonwealth or is a vote management system.
- Is not a unit owner of the planned community, directly or indirectly.
- Has no immediate family relationship with a unit owner or the planned community or the planned community manager.
- Has no financial interest shared with a unit owner of the planned community or the planned community manager.
- If compensated by the declarant, a director, the association or the planned community manager, has disclosed the terms of the compensation to all unit owners of the planned community at a scheduled meeting.
A “vote management system” is:
A third-party vendor who operates a digital or subscription service that securely manages the conduct of elections and voting procedures.
Remember, this cannot be the board or the property manager. Plus, the independent reviewer has to disclose what they are getting paid to do the job.
If an association has fewer than 500 Units, it can opt in to this process. This requires the approval of at least 51% of all unit owners.
This independent reviewer requirement also applies to master planned communities who have 500 or more units. This leads to a big legal question. In many, if not most, master planned communities, each of the sub-communities elect their own representatives to the composite master planned community board. That means that there is never a ballot that goes out to every member of every sub-community to elect the master board. I am not sure whether this provision requires every master planned community use an independent reviewer, or whether it only applies where the master board is elected at large.
Amendments to Bylaws
Up until now, there have been several different ways to amend Bylaws. Generally, the way to amend Bylaws was whatever the Bylaws said. Act 115 standardizes Bylaw amendments, requiring:
The bylaws may be amended only by vote, vote by proxy or agreement of unit owners of units to which at least: … fifty-one percent (51%) of votes in the Association are allocated ….
The vote may be taken only at a scheduled meeting and following notice to the unit owners that was advertised 14 days in advance to the unit owners. Absentee voting shall be permitted to unit owners provided that the ballots must be submitted to an independent reviewer by the commencement of the scheduled meeting.
Again, this concept of an independent reviewer comes into play.
Recording Member Meetings
Act 115 gives guidance on recording members’ meetings. It says:
Recorded Meeting. … meetings of the Association may be recorded by the Executive Board via audio or video technology, provided that an announcement is made by the presiding officer at the commencement of the meeting that the meeting will be recorded. A recorded meeting under this subsection shall be maintained and available to unit owners for a period of no less than six months after the date of the meeting.
This does not apply to board meetings.
The biggest example of Act 115 giving an answer to a question that no one asked deals with pre-election sessions. This section forces the association to have a “meet the candidates” session if any of the candidates request it. The Act requires:
Pre-election sessions.–the Bylaws must require that, in the event that there are more candidates than open positions on the executive board, then, upon request of one or more of the candidates, the association shall hold a special session at least seven days before the election of an executive board member to allow the unit owners to meet each candidate for an executive board position. Each candidate for an executive board position shall have equal time to address the unit owners during a special session under this subsection.
It is hard enough to get people to show up for an election meeting. Imagine having them come out a week before to meet their neighbors?
Removal of Board Members in Condominiums
Act 115 gives the process for removing a board member in a condominium. It requires a two-thirds vote of all persons present at any meeting of the unit owners at which a quorum is present. Notice needs to be provided of the intention to remove a board member.
This requirement was already in Section 5303(f) of the Planned Communities Act. I think that this is a terribly low bar to do something as drastic as removing a board member. Remember, in Part One, if there is not enough for a quorum after two meetings, then whoever bothers to show up at the third meeting counts as a quorum. That means two-thirds of whoever is at the third meeting can remove a board member.
Associations are Forced to Amend Their Bylaws
Other than forcing large associations to hire independent reviewers, the worst part of Act 115 is that it requires associations to amend their bylaws to incorporate some of these provisions. There are a number of places in Act 115 that say “the bylaws must provide,” of the “bylaws shall/must require” one of these provisions.
I believe that this means just about all of the associations out there will need to amend their bylaws. This will not require a vote of members. The Acts allow for “corrective amendments” if they are necessary to comply with current law. Unfortunately, a corrective amendment also requires that the association get a completely independent attorney to provide an opinion that the bylaw amendment is permitted. This will be one more job and one more bill for communities. Many of the changes in Act 115 will help people become more involved in their community meetings and elections. Unfortunately, some associations will have a lot of work to do to comply with the law. And just about every association will have to do a little bit of extra work because of these changes.