CAI-MN Minnesota Community Living - May/Jun 2015

Page 14

Please Consider the Environment Before Printing This Message: Can (and Should) Your HOA Use Electronic Meeting Notices and Ballots?

By Matt Drewes | Thomsen & Nybeck, P.A., Attorneys


n keeping with the theme of this issue of Minnesota Community Living, this article reviews a way for community associations to become just a little bit more eco-friendly, using sustainable methods, while saving themselves some time and money in the process. Provided they follow the applicable statutory procedures, most community associations can utilize electronic meeting notices, and even conduct member votes by electronic means. This isn’t just about saving trees. There is more to gain from taking advantage of available electronic notice and voting capabilities than a reduced environmental impact. Board members and property managers can save time by sending out meeting information by email, and the savings on postage alone can really add up. Also, many members of community associations use the freedom from exterior maintenance obligations to travel in the winter, and those members are likely to receive emailed notices or ballots more promptly than when such items are forwarded to a temporary mailing address. Note, “electronic means” of communication generally refers to email messages, but the phrase “electronic” can also mean by fax or by posting to an electronic message board that members are then directed to visit to retrieve meeting notices or other materials. Most associations that use electronic communications simply utilize email as their method of electronic communication. Can these provisions help you? It will take some cooperation from your members, but for most associations the answer is


Minnesota Communit y Living

yes. Most community associations are governed by Chapter 515B of Minnesota Statutes, otherwise known as the Minnesota Common Interest Ownership Act, or MCIOA. An even greater percentage of community associations are governed by Chapter 317A, the Minnesota Nonprofit Corporation Act. Where these laws overlap, a community association must comply with the provisions of both, as well as any further restrictions or limitations contained in the association’s governing documents (articles of incorporation, bylaws, and declaration). Fortunately, both acts authorize electronic notices and voting in some capacity, although the extent to which the statutes grant this authorization does differ between the Nonprofit Act and MCIOA. This article will address the provisions of these laws that most often apply to community associations. Also, due to the number of details to address in establishing electronic notices and voting, this article is intended only as an introduction to the topic, rather than a step-by-step manual. You should consult your governing documents or your community association’s lawyer to be sure which laws may apply to your particular association, and whether there are any other unique procedural requirements your association may have adopted. For example, there is no question that associations governed by MCIOA can utilize the electronic notice procedures discussed in this article for board of director meetings. However, the use of electronic notices of member meetings is not clearly authorized for MCIOA associations, even though electronic notice of member meetings clearly would be permitted under the Nonprofit Act. The means for participating in a member meeting electronically (including voting) are more expansive under the Nonprofit Act than those under MCIOA, as well. MCIOA

does, however, contain provisions relating to the conduct of electronic voting, subject to limitations contained in the association’s articles of incorporation, bylaws, or declaration. This is covered further below.

Taking notice First, the notice process is a requirement of board meetings, as part of Section 515B.3103(g) of MCIOA, which says that all meetings must be open to members. This section also permits electronic meeting notices, by citing to the Nonprofit Act’s definition of “notice.” That portion of the Nonprofit Act then refers to the statute that grants nonprofit corporations (including applicable community associations) the authority to send notice to members by, among other means, fax or email. The requirement before utilizing one of these means of electronic transmission is that the member must consent to receive notice in the desired method either “in writing” or by means of an “authenticated electronic communication.” “Authenticated” means the communication must be sent in a way that demonstrates the sender is, in fact, the member he or she claims to be.

A change for votes

When members themselves are going to vote on a particular issue, MCIOA also authorizes associations to send ballots to members (and to receive them back) electronically. According to Section 515B.3110(c), a member again must authorize the association to send notice of the vote and the ballot either in writing or by “authenticated electronic communication.” This authorization can be done in the same document or message authorizing electronic notices of board meetings. There are just two restrictions on this voting process. First, the articles, bylaws, and declaration must not prohibit voting on the particular matter by remote means (“remote means” being either mailed or electronically-transmitted

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