Q: Our Annual Meeting is to be held in April or May, 2020 and the Board of Directors is concerned that large group gatherings will still be banned by the government at that time. When should we reschedule our Annual Meeting?
A: It is still uncertain whether Governor Whitmer’s temporary restrictions on large events and assemblages of 50 people or more will be extended past April 5, 2020, which makes it difficult to determine when to reschedule your Annual Meeting. On March 16, 2020, the Trump administration and the federal COVID-19 task force recommended keeping group events and gatherings to 10 people or less.
Pursuant to the Michigan Nonprofit Corporation Act (Nonprofit Act), if your Annual Meeting is not held on the date designated for the meeting by the Bylaws, the Board of Directors may schedule the meeting as soon after that date as convenient. At this time, it is reasonable to inform the Co-owners that the Board of Directors will reschedule the Annual Meeting once the temporary restrictions on large events and assemblages of 50 people or more has been lifted by the government.
Please note that the Nonprofit Act states that if the Annual Meeting is not held for 90 days after the designated date for the meeting or if no date is designated for 15 months after the last Annual Meeting, a Co-owner may petition the Circuit Court to summarily order that the Association hold the Annual Meeting at the time and place ordered by the Court. We do not expect that a Co-owner would pursue a court order if the Annual Meeting is not held for 90 days after the designated date for the meeting, due to the COVID-19 pandemic. Practical thinking and common sense are important as we work through this crisis.
Q: Aside from postponing the Annual Meeting, are there any other options for our Association regarding holding the Annual Meeting while the COVID-19 pandemic is still an issue?
A: Postponing the Annual Meeting is the easiest and cheapest way to handle this issue if large gatherings are still prohibited when your Annual Meeting is to be held. Another option is to hold the Annual Meeting by means of remote communication. If your Association’s Articles of Incorporation and Bylaws do not specifically prohibit participation at the Annual Meeting by remote communication, it is allowed under the Nonprofit Act.
The Nonprofit Act states that Co-owners and proxy holders that are not physically present at a meeting of Co-owners may participate in the meeting by means of remote communication and are considered present in person and may vote at the meeting if all of the following are met:
- The Association implements reasonable measures to verify that each Co-owner that is considered present and permitted to vote at the meeting by means of remote communication is a Co-owner or proxy holder.
- The Association implements reasonable measures to provide each Co-owner or proxy holder a reasonable opportunity to participate in the meeting and to vote on matters submitted to the Co-owners, including an opportunity to read or hear the proceedings of the meeting substantially concurrently with the proceedings.
- If any Co-owner or proxy holder votes or takes other action at the meeting by a means of remote communication, a record of the vote or other action is maintained by the Association.
There are means of remote communication that could be utilized by Associations for holding Annual Meetings and voting at Annual Meetings. You may check with your Community Association Manager or Technology Provider to inquire about the availability of such options for your Association.
Q: Our Board of Directors has important business that it needs to attend to during the COVID-19 crisis, but we don’t want to meet in person. What options are available for the Board to meet virtually?
A: Unless specifically restricted in your Association’s Articles of Incorporation or Bylaws, the Nonprofit Act allows Board Members to participate in a Board Meeting by conference telephone or other remote communication as long as all individuals participating in the meeting can communicate with each other.