Most condominiums and homeowner associations (HOAs) are nonstock corporations under Wisconsin Chapter 181. As such their members can make decisions one of three ways:
- Holding a meeting;
- Action by written consent (181.0704 Wis. Stat.). This may be used unless “limited or otherwise provided in the articles of incorporation or bylaws…” For an association to act by written consent, the action must be “approved by members holding at least 80 percent of the voting power, or a different percentage, not less than 50 percent, specified in the articles of incorporation or bylaws.” The written consents must be signed and dated after the date of the last meeting of the members and kept with the minutes
- Action by written ballot (181.0708 Wis. Stat.) This may be used “if permitted by the articles of incorporation or bylaws, any action that may be taken at an annual, regular or special meeting of members may be taken without a meeting if the corporation delivers a written ballot to every member entitled to vote on the matter, the ballot sets for the proposed action and provides an opportunity to vote for or against the proposed action.” “Approval by written ballot … valid only when the number of votes cast by ballot equals or exceeds the quorum required to be present at a meeting authorizing the action, and the number of approvals equals or exceeds the number of votes that would be required to approve the matter at a meeting at which the total number of votes cast was the same as the number of votes cast by ballot.”
To have an action by written ballot your documents must specifically authorize that option, while to have an action by written consent, you simply need to check to make sure that your documents don’t specifically prohibit it. On the other hand, business corporations (Wisconsin Chapter 180) have a specific statute that allows for shareholders to participate in a meeting by “remote communication.” (Sec. 180.0709 Wis. Stat.). There are several caveats dealing with things like verifying the people present, being able to hear the proceedings concurrently, and maintaining a record of actions taken.
This then raises the question, can a condominium or HOA have a virtual meeting and if they do, what is the effect of the acts taken at such a meeting? The statutes give your association the power to do “all things necessary or convenient, not inconsistent with law, to further the activities and affairs of the corporation.” (Sec. 181.0302(19) Wis. Stat.). Moreover, to the extent the current pandemic can be called an emergency, “corporate action taken in good faith during an emergency … to further the ordinary affairs of the corporation binds the corporation and may not be used to impose liability on a corporate director, officer, member, employee or agent.” (Sec. 181.0303(4) Wis. Stat.). The law also provides that “no act of a corporation … shall be invalid by reason of the fact that the corporation was without capacity or power to do such act …, except that lack of capacity or power may be asserted in all of the following cases: (1) a proceeding by a member or director against the corporation to enjoin the doing of any act… (2) a proceeding by the corporation … against the incumbent or former officers or directors of the corporation; or (3) a proceeding by the attorney general… to enjoin the corporation from performing unauthorized acts.” (Sec. 181.0304 Wis. Stat.).
In addition to the above, the statutes also provide that a “corporation may provide in its articles of incorporation or bylaws for election of directors by … any other reasonable method.” There are two points to note here: (a) this section by its terms only applies to the election of directors, not the whole meeting, and (b) there must be a provision in your documents that allows for the virtual meeting.
Based on all of the above, if your documents allow for electronic or Zoom meetings, you would seem to be allowed to have such a meeting for the purpose of electing directors, but not necessarily for any other purpose. To get around this, because most Association’s Bylaws allow attendance at members’ meetings either in person or by proxy, you can make use of directed proxies that allow the owners to indicate how their vote(s) should be cast without actual attendance in person at a meeting. As long as you collect enough proxies in advance of the meeting to meet quorum, one or more Board members can run the agenda (which other members attend the meeting via Zoom or other video conference service, if you would like), count the proxies, and cast the votes as indicated.
So, if you intend to have a Zoom or virtual meeting, at a minimum check with your Association’s attorney to see how best to conduct the meeting within the parameters of your particular Bylaws.
