Heading into the seventh month of social distancing, many coop and condo boards are starting to decide on whether to have or not to have their annual meetings. Although boards could likely postpone the annual meeting for now, some boards would like to schedule and hold their annual meetings. Here are some options and benefits to scheduling a virtual annual meeting.

There are two questions that need to be addressed when planning the annual meeting:

How will a quorum be determined?

How will the election for board members be determined?

A quorum needs to be reached for an annual meeting to be official. If a quorum is not reached, the meeting will be an unofficial meeting and the bylaws determine whether any decisions can be voted on and ratified or not.

A quorum means that more than a certain percentage of the apartment owners or shareholders need to be present or have signed a proxy for another individual to represent those shares or their ownership. The by-laws determine the percent of a quorum. In general, most buildings require over 50% to reach a quorum.

Buildings often have a hard time reaching a quorum especially for those buildings where there are no problems or pressing issues. If on the other hand when there have been huge increases in maintenance, common charges, or assessments, people generally show up.

It is difficult to know whether it will be easier or more difficult to reach a quorum for a virtual annual meeting. However, since many of us have now spent six months on Zoom or other virtual meeting platforms due to the pandemic, one can argue that people have gotten used to virtual meetings and it may not be as problematic as boards may seem to think. Virtual meetings will also enable those who are not in town to attend, allowing for a larger possible base to attend.

Honest Ballot is a platform that counts both the quorum and the election of board members. This platform, in our opinion, is much better than having the property managers managing the annual meeting. Why?

It is more cost efficient as the property management firm charges much more than you think. They charge for the printing of all the pre-annual meeting notices, which becomes expensive (and not so good for the environment).

Honest Ballot traditionally shows up at the meeting to do the quorum and election counting and verification. The company has expanded to provide its services online. The firm facilitates votes via computer, phone or mail and can be a combination of them all.

Some coops and condos do not require cumulative voting, and instead have a single transferable vote. This is where each apartment gets one vote no matter the size of the apartment or number of shares held. Although we do not see this as often, Jeff O’Neill, the founder of OpaVote has seen several buildings in New York City convert from cumulative to single transferable vote as of late. For buildings that use single voting, there are many more options, OpaVote being one of them.

Here’s what Stuart M. Saft, Partner and New York Real Estate Practice Group Leader at Holland & Knight LLP said about annual meetings in these Covid times. “The date set forth in the By-Laws is not legally significant. If the date is passed without a meeting and the Board does not call a special meeting, then the shareholders can request a special meeting be held, to occur not less than sixty nor more than ninety days after the shareholders’ written demand. If the corporation fails to give notice of such meeting within five business days, then any shareholder signing the demand may give notice of the meeting, to be held at the place fixed in the by-laws, or if not so fixed, at the office of the corporation”

Please call us for any questions at 917.648.8151 or 917.648.8154.

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