Many of our communities have asked whether it is permissible to conduct association business -- particularly board meetings at which binding votes are taken -- via email or other similar means during the COVID-19 pandemic.
The short answer is No. Community associations are still required to follow open meeting requirements under the law. Governor Murphy’s Executive Order 107 simply precludes community associations from holding open meetings in person. For this reason, your association’s legal counsel may be able to help you conduct your open meetings via conference call, online via a virtual meeting app like Zoom, or other similar means as may be necessary.
The Legal Obligation to Conduct Open Meetings
All meetings of the governing board of community associations at which binding votes are taken must be open to the membership, pursuant to the requirements of the New Jersey Planned Real Estate Development Full Disclosure Act and the New Jersey Condominium Act. There are a few exceptions: (1) matters the disclosure of which would constitute an unwarranted invasion of privacy (e.g. the discussion of an owner’s delinquency); (2) pending or anticipated litigation; (3) contract negotiations; (4) matters falling within the attorney-client privilege; (5) any matter involving the employment, promotion, discipline or dismissal of a specific officer or employee of the association; and, (6) work sessions, at which no binding votes are taken.
Penalties for Failing to Conduct Open Meetings
Community associations and their board members could potentially face severe consequences for failing to conduct open board meetings. Decisions made by a governing board, but not in an open meeting, could be declared invalid or unenforceable by a court, which could result in personal liability for a board member. In addition, the New Jersey Department of Community Affairs may, amongst other legal remedies: (a) issue a cease and desist order; (b) seek injunctive relief; (c) seek the appointment of a receiver to replace the governing board, particularly if there are multiple violations, or; (d) impose penalties up to $50,000 per violation against each person who violates the requirement. Thus, it is imperative that your community take the steps recommended below to hold open meetings virtually or via conference call.
Holding Virtual Open Board Meetings
While the Governor’s ‘Stay at Home’ Executive Order prohibits the gathering of individuals, it does not provide relief from the open meeting requirements for the governing body of a community association. Fortunately, the law permits community associations to hold open meetings via conference call, virtual meetings (e.g. Zoom, GoToMeeting, etc.) or closed circuit television, provided that the members of the association can ‘attend’ the live meeting -- which in this case means view it in real time. The good news is, the law does not require participation of members in the meeting, or even the provision of a public comment session during open board meetings. Indeed, depending on the number of members who attend, conducting an ‘open forum’ or ‘Q&A’ during a virtual meeting could prove difficult. Whether or not to do so is therefore entirely at the discretion of the governing board.
Despite no legal requirement to allow for comments or questions from the membership, we still recommend that you do so, particularly if it is your association’s regular practice. There are creative solutions available to allow for this in an orderly fashion, including: (a) submitting questions via email prior to, during or after the meeting; (b) for smaller communities, permitting live questions via conference call or virtual meeting (c) using the “Q&A” function on Zoom, or (d) having members contact management with any questions after the meeting.
We understand that these are difficult times for the governing boards of community associations to navigate. If you have any questions about this or any other community association matter, please feel free to contact any of the attorneys in our New Jersey Community Association Practice Group.
Becker & Poliakoff LLP is a full-service law firm with offices in New Jersey, New York, Washington, DC, and Florida. This advisory is offered as a service to clients and friends of Becker & Poliakoff and The Cooperator, and is intended as an informal summary of certain recent legislation, cases, rulings and other developments. This advisory does not constitute legal advice or a legal opinion and is not an adequate substitute for the advice of counsel.