Our firm’s attorneys have seen several recent association mailings entitled something to the effect of “Meeting by Ballot” or “Annual Meeting by Ballot.” It appears there is a belief among some that the recent adoption of House Bill 320 (“Modernize Remote Business Access”) created a new method of members meeting through a written instrument. It did not.
As discussed in the recent post Does New Law Mean Associations Don’t Have to Hold Annual Meetings?, North Carolina has two main methods for association members to make decisions:
- A membership meeting, which can be held in person or under the new statute electronically, OR
- Through one of the methods for members to make a decision outside of a meeting, which can include written ballot, electronic written ballot, or electronic voting.
Given these two options, it is also possible to combine a virtual meeting (with no voting during the meeting) with making the decision outside of the meeting through written ballot, electronic ballot or electronic voting.
The new electronic meetings law (see Bill Adopted to Allow Electronic Membership Meetings and Voting in North Carolina Associations) did not do away with any requirement to hold an annual membership meeting. As to nonprofits, most bylaws have language requiring an annual meeting and the NC Nonprofit Corporation Act states: “A corporation having members with the right to vote for directors shall hold a meeting of such members annually.” The change to the law in 2021 simply provides that member meetings can now also be held virtually. While the statute already provided a method of making decisions outside of a meeting through written ballot, the new law adds options of using an electronic ballot or electronic voting system.
So that means:
(1) As long as the statutory steps are followed, decisions can be made by members outside of a meeting by using a written ballot, electronic ballot, or electronic voting system. However, NONE OF THESE METHODS COUNT AS A MEETING. They are instead processes for members to make a decision without a meeting, just as has been possible for decades through written ballot.
(2) Any requirement to hold an annual meeting, such as the requirement for nonprofits with members who elect directors (including homeowner and condominium associations), is not met by a decision made outside a meeting. There should still be an in-person or electronic annual meeting.
Takeaway: There is no legal authority in North Carolina for “meeting by ballot” or an “annual meeting by ballot.”
For any HOA/condo meeting questions, contact one of the community association attorneys at any of Law Firm Carolinas’ five offices.