The problem one faces today with running a member, or annual meeting, is that no matter what road is chosen, either choice results in a technical violation of the issued Radburn regulations.
Having a member meeting where the annual election takes place is not really possible in this environment. So, the query is can one have an annual election remotely? The answer is “yes” since the NJ Legislature amended Title 15 to allow for remote member meetings. However, one of the Radburn regulations requires that the counting of ballots be done on public. Having a remote meeting does not actually qualify since the “public” not truly present at the meeting to see the actual counting (I am sure methods can be developed to make every ballot that is opened shown to the members remotely, but this could be a cumbersome process, especially for very large communities.
However, if the election is postponed to a later date, which means that the existing terms of the seated trustees is extended, this is also a violation of the issued Radburn regulations against term extensions. So, either choice results in an unintended violation due to the current environment.
The DCA did no favors for community associations issuing these regulations during this pandemic. Almost seems like an intentional, and sinister, act to have issued these regulations now “just because it can”.
Under these circumstances, I suggest the association engage in the election via the remote path allowed by statute. I believe this is the lesser of 2 evils since the ballots have to be retained for a certain period of time to be available for member inspection. If there is any question of the count of ballots, it can be reviewed by any member.
Stark & Stark
993 Lenox Dr, Building 2
Lawrenceville, NJ 08648
As is often the case, the answer to this question is primarily dependent on what the association’s governing documents say about this issue. The relevant language is most likely in the Bylaws. Many thousands of associations across the country are facing this very same dilemma. If the annual meeting and election simply cannot possibly be held in any manner, then there really is no choice to me made. The election won’t happen because it can’t happen. At that point the most important things to consider are, what will happen as a practical matter If the annual meeting and Board election are postponed?
In most governing documents, it is stated that the current Board members will continue to serve until the next election, even though their terms have expired. It may be that some of the current Board members do not wish to serve past the end of their term. And there is also the dynamic that some residents might believe that the Board is not legitimate due to the fact that there are members serving whose terms have expired, especially if the Board has failed to explore or consider alternative ways to hold the election if that can be done lawfully. Almost certainly the greatest danger to be wary of is that if the Board is not properly constituted and members are serving past their terms without legal authority, voting on and taking actions which they had no right to take because they were not lawfully serving when such actions were taken, then potentially a resident or other interested party could later challenge such actions of the association and seek to undo them as not lawful.
For these reasons a holdover Board is to be avoided if at all possible and the annual meeting and election should be held if there is any lawful way to do it. Unless the language in the governing docs explicitly mandates that the annual meeting and election must be held physically in person and may not be held electronically, then it is a reasonable interpretation that the election may be held electronically. If there is a lawful way to hold the election electronically, that option should be pursued so as to avoid the potential undesirable consequences mentioned above. In South Carolina, for instance, the Nonprofit Corporations Act, S.C. Code Ann. § 33-31-708(a), states “Unless prohibited or limited by the articles or bylaws, any action that may be taken at any annual, regular, or special meeting of members may be taken without a meeting if the corporation delivers a written or electronic ballot to every member entitled to vote on the matter.”
A quick google search reveals that several software products exist that are affordable and specifically cater to electronic elections for nonprofit corporations and even specifically for the community association industry. I have clients who have utilized this option for the first time this year, specifically because of circumstances brought on by Covid-19 restrictions, and their experience with it was so positive and turnout improved so much that they might be looking to hold future Board elections that same way, even after it becomes possible to have a traditional physical annual meeting.
So the bottom line is, while you may have no choice but to postpone your Board election depending on what your gov docs say, it should be avoided if at all possible, and in may instances it is in fact avoidable by holding the election electronically. In any event the election should be held as soon as practicable.
Finkel Law Firm, LLC
PO Box 41489
Charleston, SC 29423-1489