CAI WNY Summer 2020: New York Law Allows Annual Meetings to be Held Virtually, but for How Long?
By Nicholas A. Pusateri, Esq.
as featured in the CAI WNY Summer 2020 edition of "Community Association Connection"
Temporary amendments to New York State law may create a trap for New York Homeowners Associations and Condominium Associations. In mid-June, the New York State Legislature temporarily amended the New York Not-For-Profit Corporation Law (N-PCL). The amendment permits annual (and special) meetings of HOA and condominium association membership to be held electronically. The amendment piggy-backs on Executive Orders issued during the pandemic that suspended a requirement that such meetings be held at a physical location. The amendment to the law, however, is effective for an uncertain period of time.
Boards of Directors of HOAs and condo associations have long been permitted under the N-PCL to hold meetings virtually. Prior to the pandemic, however, meetings of HOA and condo association membership were required to be held at a physical location. The N-PCL’s meeting requirements coupled with social distancing measures effectively prohibited HOAs and condo associations from holding their annual membership meetings. The result led to the temporary amendment to the law.
The amendment states it will remain in effect “for the duration of the [COVID-19] state disaster emergency.” In other words, HOAs and condo associations can effectively hold virtual membership meetings for only as long as COVID-19 remains a persistent threat in New York. The uncertain end date of the amendment, however, creates a scenario wherein actions taken at annual meetings could be challenged as unenforceable, if the meeting was held electronically after expiration of the amendment. The argument is, of course, that the meeting was not properly held in accordance with New York law.
As a result, it’s critical now, more than ever, for HOAs and condo associations to keep a watchful eye on newly issued State Executive Orders, acts of the Legislature and other state guidance to determine how (and when) to hold their membership meetings in a manner consistent with State law. We suggest speaking with your association counsel. Collectively, you should determine an efficient and effective method to track changes in the law applicable to your association arising out of COVID-19.