Between now and June 1, 2021, it is “annual meeting season” in Arizona!
With the Covid-19 Pandemic still in full force, it is our opinion that associations should be conducting their 2021 annual meeting via a “virtual” platform such as Zoom. Under Arizona law, A.R.S. 33-1804(B) and 33-1248(B), an association must conduct an annual meeting of its membership at least once a year. An annual meeting is conducted for these reasons: (1) to elect directors; (2) to communicate with owners by giving officer and committee reports; (3) to discuss the annual budget and association financials; (4) and, in some instances, to vote on increases in the assessment rate or special assessments (if needed) or proposed amendments to the association’s documents (if needed). It is important to remember that the annual meeting is also a time for discussion and input by the members on various aspects of association life (parking issues, pet problems, how association money is spent, etc.).
Conducting a successful annual meeting, especially when the meeting will be conducted virtually, requires knowledge of the association’s documents, planning, organization, preparation and execution of the plan. This post will provide some tips and ideas that will help you ensure a successful “virtual” annual meeting.
- Planning: Typically, an association’s bylaws set forth the requirements of an annual meeting including the date for the meeting, quorum and voting procedures. Review these sections in the bylaws before the notice is sent to the membership so you are sure to comply with any unusual requirements.
- Notice of Annual Meeting: The board needs to provide the owners with proper notice of the date, time and “location” of the meeting. A.R.S. 33-1248/33-1804 requires associations to mail or hand deliver notice of the annual meeting to the members at least 10 days (but not more than 50 days) before the meeting. If the board is hosting the meeting via a videoconferencing service, the log in information for the meeting should be included with the notice. We also recommend that the notice of annual meeting include an absentee ballot, agenda and documents that may need to be referenced during the meeting (such as last year’s meeting minutes, financials, a list of board accomplishments, etc.).
- Ballots: Most associations currently request that the absentee ballots be returned via mail or email to them in advance of the annual meeting. A few associations have transitioned to also using electronic voting using Services like Vote HOA Now which handle the mailing and tabulating of ballots. Associations who have used these e-voting services have informed us that their voter turnout is better than average because of the reminder emails and how easy it is for the owners to return a ballot.
- Keep Your Eye on the Quorum: Our firm has noticed that it is more difficult to get a quorum at “virtual” annual meetings. As such, a board member or the association’s manager should regularly analyze how many ballots have been returned and how close the association is to obtaining a quorum prior to the annual meeting. These numbers should be reviewed on a weekly basis to determine if follow-up reminders need to be sent to owners. A best case scenario is for the association to already have a quorum prior to the virtual annual meeting starting.
- Owner Participation at the “Virtual Annual Meeting”: The annual meeting is a “member meeting” so it is important that owners or their designated representative be given the opportunity to voice their concerns and thoughts at the meeting. The board can have a “homeowner forum” at the beginning or end of the annual meeting for this purpose. The board can unmute owners who raise their hands virtually and may place reasonable time restrictions on those persons speaking during these times (for example, a 2-minute maximum). In some associations, it can be difficult to host an open forum in a virtual meeting without having owners talk over each other. In order to avoid this, the board could ask owners to submit their questions in writing prior to the meeting so the Board can read the question/comment and provide an answer in an orderly fashion. Another option is to use a chat feature (many teleconferencing services offer this) where owners can send their comments and questions to the board “live” during the meeting. The chat feature can also be used during an annual meeting to allow owners to comment throughout the meeting. If the board does this, our office suggests that the board designate a board member, manager or volunteer to monitor the chat feature so the board can ensure that all owner’s comments are given consideration or noted during the meeting.
- Casting Ballots at a “Virtual Annual Meeting”: One of the main agenda items at the annual meeting is the election of new board members. Even if the meeting is held virtually, the association is still requited to allow owners to submit their ballot in person, as well as by mail, email fax, etc. To comply with Arizona law’s requirement that owners be allowed to cast their ballot “at” a virtual meeting, we recommend that the board allow: (1) in person voting the day of the annual meeting by casting the ballot in a secured ballot location on the property or at the management company office; using an e-voting service which allows voting once the meeting starts; or (3) allowing any owner who wants to vote at the virtual meeting to take a photo of the ballot and email it to a designated person on the board or the managing agent during the meeting.
- Annual Meeting Minutes: Finally, the board must take virtual annual meeting minutes just as it would for an in-person meeting. In addition, whether or not the virtual annual meeting will be recorded should be discussed in the planning stages for the meeting.
- Tips to Increase “Virtual” Annual Meeting Attendance:
- Announce the annual meeting date, time, and location in as many places as possible.
- Plan and publicize a “virtual” social event after or before the meeting.
- Give away door prizes or conduct a raffle for anyone who votes (vendors of the association may be willing to donate door prizes).
- Give away awards for best lawn, flowers, best holiday decorations, etc.
- Have a discussion on hot topics such as increasing the assessment rate, crime or common area improvements.
- Arrange for “virtual” guest speaker(s)(politicians, association attorney, landscaper, city officials, etc.).
- Aggressively pursue mail-in or absentee ballots.
- Acknowledge and thank all of the volunteer work association members have contributed over the past year!
If your board would like assistance hosting a virtual annual meeting, please contact us at firstname.lastname@example.org.