Caution in the Face of Coronavirus: Running a UTAH HOA Without Gatherings

March 13, 2020 | By: Utah VF Law

Whether your closet is filled with Costco toilet paper and you’re checking your phone every hour for the latest COVID-19 update or you’re urging your social-media network to stop panicking and just start washing their hands, one thing is certain: coronavirus continues to spread and, according to health professionals around the world, one thing we can do to slow the spread is avoid group gatherings.  Unfortunately, that’s not always easy to do when you are trying to maintain a functioning community association. Regular gatherings are the norm for community associations; in fact, in some cases, they are mandated by the governing documents. So, under Utah law, can you keep your association running, meet fiduciary duties, and comply with your governing documents without congregating? Probably. Here are two things you can do: 

Take action without meetings.  Utah law has provisions allowing both member action and board action without meetings, as long as your governing documents don’t prohibit it.  Other than the election of board members, any member action that may be taken at an annual or regular meeting can be taken without a meeting and even without prior notice to the members.  The primary requirement is that enough members sign consents to constitute passage of the proposal. In other words, if passage at a meeting would normally require 51% of the total voting interest, then the same measure can pass if 51% of the voting interest signs consents.  There are a few other hoops to jump through such as gathering the consents within 60 days and giving proper notice once the consents are received so make sure to consult your governing documents, relevant statutes, and your legal counsel.

As for boards and management committees, action without a meeting is effective if all board members consent to the action in writing or, by a deadline stated in the proposal, enough members give their written consent to constitute approval if a meeting had been held.  Action by email is sufficient to meet the statute’s requirements and, again, there are some nuances to navigate (such as a board member’s right to demand a meeting on the matter) so consulting the statutes and your legal counsel is recommended. 

Permit attendance of board meetings by electronic means. Under Utah law, board meetings generally must be open to the members and a board meeting is defined as “a gathering of a board, whether in person or by means of electronic communication, at which the board can take binding action.”  Means of electronic communication is defined as “an electronic system that allows individuals to communicate orally in real time.” In other words, if everyone attends by skype or phone, it’s still a meeting. There’s no need for any two people to physically be in the same room.  Notably, State law requires that, if board members are allowed to attend a meeting by “means of electronic communication,” the members must be allowed to as well. In that case, any notice that goes out to the members regarding the board meeting must include information on how to attend the meeting electronically.  

At a time like this, we fortunately live in an age where technology allows us to conduct more business than ever before without leaving our homes or offices.  Equally as important for community associations, State law allows for this as well. Do your homework, consult the proper resources, and then don’t hesitate to take advantage of these mechanisms. Please contact us at 801.355.9594 or [email protected]