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Another Challenge: Conducting the 2020 Annual Meeting

Cooperatives and condominiums whose By-Laws schedule their annual meetings in April, May, or June were placed in a difficult position this spring. The public health situation and executive orders precluded gathering shareholders or unit owners to hold an annual meeting. Other activities traditionally associated with some annual meetings, such as visiting neighbors to gather proxies, would also have been inappropriate.

In March, the Governor issued an executive order suspending the requirement that shareholder meetings take place in a physical location, thus allowing the meeting to be held remotely. This executive order is currently in effect through July 6 but is expected to be extended. Separately, Section 602 of the Business Corporation Law was amended last year to facilitate remote participation in shareholder meetings. Under that model, the chairperson and any others who wished would attend the meeting in person, but others could participate and vote by video or audio hookup.

For practical reasons, most coops and condos have been reluctant to embrace the concept of an electronic annual meeting. Holding an electronic meeting presents an especially daunting challenge for larger buildings whose annual meetings are attended each year by scores if not hundreds of people, including some who may lack access to computer equipment, may lack experience in using the equipment to attend virtual meetings, or may have disabilities making it difficult or impossible for them to participate in this fashion.

Nonetheless, as it is becoming increasingly likely that large in-person gatherings will remain impossible or impracticable well into the fall, and as many people are now familiar with Zoom or other online meeting platforms from work or their other interests, more coops and condos will be exploring the electronic-meeting option. Even buildings whose annual meetings are held later in the year should anticipate this issue and begin discussing how to address it. Counsel can provide advice on the legal requirements for the annual meeting, as well as best practices for conducting a meeting virtually if circumstances call for it.