When much of the country was sent home and pushed online during the beginning of the COVID-19 pandemic, a lot of people got used to the ‘virtual’ way of life. People seemingly liked ‘virtual’ life so much there was a national outcry when companies began to announce moves back into their offices. Many people would say that logging into a Zoom call in your home beats out a drive across town for an appointment or meeting any day, and the NC legislature enacted House Bill 320 in September, 2021.

            Initially when the pandemic hit, the Governor released an Executive Order allowing virtual membership meetings for homeowner associations (“HOAs”). Recognizing the continued need after the expiration of the initial Order, non-profit corporations, such as HOAs, were allowed to conduct “town hall” meetings virtually, but the votes that were to take place during those meetings were still to be recorded manually. House Bill 320 now authorizes all business, including voting during meetings, to be conducted electronically unless expressly prohibited in the HOA’s Declaration of Covenants.

The Important Changes

Electronic Transactions have become a lot more welcomed. The definition of “vote” was updated to include electronic voting systems. Transactions may now be conducted electronically, unless the articles of incorporation, bylaws, covenants, or action by an HOA’s board of directors says otherwise. And if business is to be conducted electronically, it is noted that a business e-mail address should be administered and utilized for this purpose.

Meetings

Annual, special, and court-ordered meetings may now be held in person, in accordance with the bylaws, or by means of remote communication. Notice can now be provided by electronic means to a member who has designated an email address with a description of the means of remote communication and the notice is effective when sent. Attendance, in person or online, will serve as a waiver of objections towards forms of notice or any consideration of particular matters.

The members’ list shall be available for inspection by any member for the communication with other members concerning the meeting. The list should be available at the principal office or on a reasonably accessible electronic network, provided that the information required to gain access to the list is provided with the notice of the meeting.

Voting

As previewed by the voting definition change, there were some significant changes to the voting section:

1. Written ballots may now be submitted electronically, such as through email
2. Electronic voting can be conducted, with proper instructions on how to vote using the system, with each proposed action already set forth with the proper voting options (for or against).
3. All members entitled to vote on a matter shall be given the opportunity to vote on the proposed matter via written or electronic ballot, or both.
   1. A vote by either ballot will only be valid if the votes equal or exceed a quorum required to be present at the meeting, and the number of approvals equals or exceeds the number of votes that would be required to approve the matter
4. It is up to the board on how they decide to administer the ballots.
   1. The deadline for the return of the written and electronic ballots and for the casting of electronic votes on any proposed action shall be identical.

New Rules for Remote Meetings

An entirely new section was added for Remote Participation in Meetings. Members of any class are allowed to remotely participate in any meeting of members as authorized by the board of directors.

Members participating remotely are deemed present and may vote if:

• • • The person is verified as a member; and,
    • Members are allowed a reasonable opportunity to participate in the meeting and vote as they would if they were in person.

The board of directors may move all the meetings remotely if they choose to so long as the bylaws do not prohibit it. Notice of a meeting being held solely remote must include notice that the meeting will be held solely remote, with sufficient instruction and information on how to join the meeting.

For the full text, visit https://www.ncleg.gov/BillLookUp/2021/H320 

Hannah Hein is an associate attorney in the Fayetteville office’s litigation section, where she works in the areas of owners associations, landlord tenant law, and civil litigation.

(910)864-6888 ext. 1232

Hannah.Hein@hutchenslawfirm.com