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HOA Board Actions Without A Meeting – Community Association operations during COVID-19

Our attorneys have been asked to address a community association’s ability and process for boards of directors to make decisions without holding a meeting. Many community associations have responded very quickly to make adjustments in how they are doing business to limit contact and follow the health guidance on COVID-19. Typically, we are advising our community associations to not make decisions unless they are doing so at a board meeting. However, we are in uncharted waters and need to make sure that we are following the requirements of social distancing and isolation, and at the same time continuing the operations of the HOA, all with transparency to permit the owners in the community to know what decisions are being made.

Board action without a meeting

If the community association is a nonstock corporation, Virginia law addresses how boards may take action outside of a meeting.  See Va. Code. Ann. § 13.1-865.  Unless the articles of incorporation or bylaws of the community association provide otherwise, the board of directors may take action (make decisions) without a meeting if each director signs a consent describing the action to be taken and delivers it to the corporation. The consent must be in writing and can be accomplished by electronic transmission. The statute provides that the decision becomes effective when the last director signs the consent unless the consent provides a different effective date. The date of each director’s consent should be included on the signature page, or if electronically transmitted, the date of transmission will be the date of consent. The effective date cannot be more than 60 days from the date the last director signs the consent. 

If the articles of incorporation or bylaws require all decisions to be made at a meeting or prohibits the board from taking action without a meeting, then the board should make every effort to hold a remote or virtual board meeting. If this is not possible and it is critical to the operations of the community association for the board to make a decision, then given our current limitations on meetings, and requirements of social distancing and isolation, the board should proceed with its decision via unanimous consent. The same holds true for community associations that are not nonstock corporations.

Please note that the current pandemic does not change the requirement that decisions made by the association have to be within its authority as provided by its governing documents, or by law, and that decisions are to be made in the best interest of the association.

Communication

Communication is most important when a board is making decisions by unanimous consent, but especially during this pandemic. If possible, the community association should send out a notice to the members prior to obtaining the unanimous consent. The notice should inform members of the issue that requires a decision, and let the members know it will be made by unanimous consent without a meeting. The notice should let members know that they can send in any comments on that particular issue for the board’s consideration, and provide an email address to facilitate such communication. If the decision is time-sensitive and does not allow for notice to members, it is important to immediately communicate the decision to the members, including the reason that the decision required quick action.

Ratification

Any decision that is made by unanimous consent should be placed on the agenda of the next board meeting to permit the board to ratify the decision.

Property Owners’ Association Act and Virginia Condominium Act

We reiterate that this should be used in limited circumstances, and if a remote or virtual meeting can be held, we strongly encourage it. You may have members who are concerned about the board making decisions without holding a meeting. It remains a priority that our current situation with COVID-19 requires us to figure out how we can keep doing business and be socially responsible by not putting our boards, members, staff, managers, and others in our larger community at risk.

Remember, there is no one-size fits all solution.  The guidance we are giving is to permit our associations to continue operations, be socially responsible and safe, and still operate in transparency so that all members are kept apprised of board action. If in doubt, or you need additional guidance, or you feel your circumstances don’t match up with our guidance, we are available to assist you.

Susan Tarley

Susan chairs the firm's common interest community (HOAs and Condos) practice area. She was admitted into the College of Community Association Attorneys (“CCAL”). Susan is one of fewer than 150 attorneys nationwide to be admitted to CCAL, for distinguishing herself through contributions to the evolution or practice of community association law.

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Filed under: Common Interest Community, HOA, Susan B. Tarley, Unit Owners Association by Susan Tarley

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