It is official, there is a global pandemic. This affects everyone. With the onslaught of cancellations, closings, quarantining, and social distancing, COVID-19 is changing how we work, live, and interact at least for the foreseeable future. This article is intended to provide guidance to community associations about how to operate in this environment.
- Information. There is no shortage of information available from news agencies, CDCs, the WHO, state and local governments, institutions, and businesses. CAI is regularly updating its website with information applicable to communities, residents, and CAI events. Access the link: coronavirus. Stay current with this information as it will inform an Association’s decision in many areas.
- Common amenities and facilities. Many association documents include as a purpose providing for the operation and maintenance of common amenities and facilities and the care, health, and/or safety of the owners and residents. By statute and the governing documents, the Association controls the common areas, and Board members have a fiduciary duty of use care in enforcing the documents and exercising their authority. Associations should consider the following:
– rescheduling or cancelling events
– stepping up cleaning, disinfecting, and wiping of common areas, equipment and facilities (door handles, elevator buttons, tables, countertops, etc.)
– providing hand sanitizer or wipes in common areas for owners, guests, and employees
– closing or restricting access to common areas and facilities, such as the office, meeting space, gathering areas, exercise facilities, clubhouses, pools, game tables, etc.
Meetings. The preference for in-person meetings, which facilitates discussion of ideas, deliberation and opportunity to question and debate, may need to be modified in light of efforts to contain and mitigate the spread of coronavirus and the health threat. This may mean postponing and cancelling non-essential meetings, and events. For business that must go on, Virginia statutes and the governing documents provide some alternatives.
Membership Meetings. Depending on the size of the Association, attention should be paid to the number of persons that may be in attendance. This could have a bearing on a decision to reschedule an annual or special meeting. Some Bylaws contain a requirement to hold an annual meeting on a certain day or within a certain timeframe (i.e. the month of April), while others require only that an annual meeting be held each year. In the case of a specific day or timeframe, the meeting may need to be noticed even if few will attend. If a quorum is not obtained (as unfortunately happens even without a pandemic), the meeting can be noticed for another date. Check the documents to determine any time constraints on the subsequent meeting attempt. Most documents include a minimum rather than a maximum time period after which such meeting is to be held.
If the membership proceeds with the meeting, consider modifications to the meeting space such as a larger room or facility that would permit sufficient distance between attendees, wiping down surfaces, and prohibiting persons with symptoms from attending, etc. If refreshments are served, refrain from open platters, buffets and multiple-serving dispensing of beverages in favor of individually wrapped items.
Neither the Virginia Condominium Act (“Condo Act”) nor the Virginia Property Owners’ Association Act (“POA Act”) expressly authorize electronic membership meetings. In fact, many governing documents provide that presence at an owners meeting is either in person or by proxy. Even if the documents permit attendance by electronic means, it will be important to make sure that everyone can hear and speak to everyone. This is difficult to do unless it is by some means of audio or video conferencing, and even such means can be difficult with larger groups. Email, chat rooms, social media, and similar forms of electronic communication do not allow everyone to hear and speak to everyone and therefore are not permitted. If the Association is incorporated as a Virginia nonstock corporation, the Virginia Nonstock Corporation Act (“Nonstock Act”) permits members to participate in any meeting of the members by means of remote communication to the extent that the Board authorizes such participation for members. Participation by remote communication is subject to procedures adopted by the Board and in conformity Va. Code Section 13.1-844.2B. Boards of eligible associations should consider enacting such procedures.
Member Action Outside of a Meeting
Even if a membership meeting cannot be held electronically, there are other ways members can make decisions outside of a meeting. Both the Condo Act and POA Act have provisions permitting the use of technology for a signature, vote, consent or approval, unless the documents expressly provide otherwise.
If the documents permit, amendments and other action may be done by written consent of the requisite percent of owners. If the Association is incorporated, and the documents permit, action may be taken by unanimous written consent (meaning 100% of the owners). Even if a single owner does not object, it is difficult to get 100% participation. This method is rarely used for association action.
Board Meetings. Both the Condo Act and POA Act permit boards to conduct meetings electronically by telephone or video conference, provided that at least two board members are physically present at the meeting place included in the notice and the audio equipment permits everyone to hear what is said by any board member participating in the meeting who is not physically present. While at least two board members have to be present in the meeting location, it cuts down the numbers and potential exposure. For those in the meeting location, employing wipe down and social distancing practices can help minimize the risk.
Board Action Outside a Meeting. Board meetings in Virginia condominium and property owners’ association are required to be open. At times, however, it may be possible for a Board to act outside a meeting by unanimous written consent. Look to the governing documents or Nonstock Act for authority to do so. In an effort to be proactive and prevent disruption, Boards should consider approving actions and delegating authority to a board member to execute and implement approved action without the need for further approval, to the extent possible.
- Contracts. It will be important to pull out and review contracts for goods and services and know the rights and responsibilities of the parties, to assess the risk, liabilities and financial impact of interruption, delay, or cancellation. Click here for information on force majeure clauses.
- Compliance with Laws. Most governing documents require associations to follow local, state, and federal laws and regulations. Heed the guidance provided by state and local authorities and the CDC regarding group gatherings. Remember to consider the implication of fair housing laws when responding to requests from residents related to the coronavirus.
- Employment Issues. To the extent an association employs staff, it will be important to review practices, handbooks and manuals regarding policies and compensation for leave and closures. If an association employs management, inquire what measures are in place to provide coverage.
- Communication. Communication is always important, but especially in unusual times. Whatever your association decides to do about meetings and events, use of common areas, reduction in force, efforts to protect the assets and members, inform the membership. Communication can be through use of a flyer, newsletter, bulletin or sandwich board, or electronic by means of a website, social media, email, or otherwise. It can be all of the above or a combination of whatever medium is likely to reach the membership. Information that is communicated clearly, consistently and timely can reduce stress, confusion and chaos.
Many governing documents contain outdated provisions that do not permit use of technology or flexibility that is needed in a changing world. If you have any questions about what your community association should do or how to conduct business, call your association attorney.