 And welcome to another episode of Kondo Insider. I'm your host for today's show. My name is Jane Sugimura. And this is a show for people who live in condos and work in condos or work with people who work in condos. And we have a very interesting topic today. And the general topic is condominium living in during a pandemic. And one of the challenges that condominiums have had is how do you have an annual meeting? Because the government says that you can't have these gatherings of over five or 10 people. And so what has happened is if the condominium didn't do their annual meeting before the shutdown orders happened on March 16th of this year, they didn't have annual meetings. So that's been the challenge. And my guest today is Christopher Shea Goodwin. He's a condominium attorney who's been practicing many, many years. Hi, Chris. Hi, Jane. Nice to see you today. Thanks for joining me. Sure. And you've been, and we talked about this before. I mean, this is a challenge that has kind of stumped a whole lot of condominiums and community associations, right? They haven't been able to have annual meetings. Right. Jane, when we got to the middle of March, and you probably know this, most condominium associations in Hawaii, their documents require they conduct their annual meeting by the end of the first quarter. So about over half of our clients, and we have about 135 condominium and community associations had conducted their annual meeting, but that's still left about 40% of our clients who had not yet conducted their annual meeting either because they had all been scheduled in the last two weeks of, last two or three weeks of March, or which is very common to scrunch it all up at the end, or more commonly, they did not have a requirement that their meeting be conducted by the end of the first quarter. But regardless, we basically had about 55 or 60 clients that had not yet conducted their annual meeting when the pandemic hit and the restrictions came in place. Right. And what stopped everybody from having annual meetings is the rule about gatherings, right, and usually with a condominium annual meeting, you have to be together in a big room where everybody can kind of congregate. And that was in violation of the governor and the mayor's proclamations about social distancing. And then there was the issue about, there was the issue about electing board members. So you have people who maybe wanted to get off the board and now they've been stuck on the board for another seven months. True, true. And there are people who wanted to get on the board and they're just out there chomping at the bit to go out and get their proxies and here they can't even have an election. And so that's been a big issue and I guess, frustrating for a whole lot of people. Is that what you're hearing too? It was a huge event, Jane. So as you correctly pointed out, when the first series of governor and mayor's emergency orders came out or proclamations, whichever they were called, they basically banned, as you correctly point out, any type of gathering, any type of gathering over a certain number. And six was the number that emerged pretty much. It went to 10 for a while, but there was no exception for condominium or community associations, at least in the first set of orders. So we went from March through all the way up to June and condominium associations and community associations were banned by these emergency orders and proclamations from having any meetings because they were in violation, as you correctly point out, of the social distancing restrictions and the limitations on the number of individuals who could be in attendance. So how did, I mean, so how did you figure out how a condominium could have their annual meeting? Well, interesting you brought that up. So we had numerous inquiries and what happened was we evaluated the law and the statute, which is 514B, which applies to condominium associations, says that you cannot conduct a meeting in any other fashion, any other method or procedure, unless it's specified in the association's governing documents. Well, every condominium association I represent and probably you too, Jane, says that the association's annual meeting shall be conducted and it puts a specific location. But their governing documents do not say anything with respect to conducting a meeting, an annual meeting or an owner's meeting by telephone, certainly not by web conference. Many of these documents were drafted even before the web took place, web was in existence. Even though many association documents, and this created a lot of confusion, said that you could have board meetings by teleconference. But remember that was only, and by the way, 514B also specifically allows the conducting of board meetings by teleconference. But there is no similar provision in 514B or the vast majority of condominium association's governing documents that allow association meetings to be conducted by teleconference or any other alternative method. So the rub came in is my clients would call, our clients would call the firm and they say, please tell us if there is a way we can have our annual meeting by Zoom or by web conference or some other teleconference or some other procedure. So as you correctly point out, they could get the business of the association done that has to be done at annual meeting. And we explore the statute and we explore their governing documents and we also look at Robert's rules of order, which until the new Roberts came out just last month, there were no procedures at all in the addition of Robert's rules, which provided for electronic or virtual meetings. They do now, by the way. And so as a result of our research, we determined that basically at an annual meeting, you have to still call the meeting to order and you have to conduct any business pursuant to, business would be conducting, taking a vote, taking an election, actions on amendments, stuff like that. Anything where a vote has to be taken, it has to be taken by the casting of a ballot, which means you're still gonna have to have a meeting and you could not do that meeting by teleconference. You could not do that meeting by web conference because there was no way physically for individuals to vote. And more importantly, for the managing agent or the association to verify who was casting votes. So what we did was we explored Robert's rules, we talked to a couple of local parliamentarians and we said, is there a way we could still have an annual meeting but do the non-required actions, not the business, via either web conference or via teleconference, whereby owners could listen or watch, but they would still not get the opportunity to vote. And we could still set up an in-person procedure to allow them to vote. So what we did was, we noticed the meeting like we always would, that it would be in a physical location, the same physical location it always would be, and owners would go down and they would still register and check in just like they always would and they would get their ballots. Well, this was gonna work very well, Jane, at a project where it was a high percentage of owner-optimists. And what I mean by that was, if the vast majority of the owners resided in the project, think about this, they could come down to the lobby, the parking garage, or wherever the check-in is gonna be, they could check in, they could claim their ballots, and then the board would still be there in accordance with social distancing requirements because if we could have up to 10 and a parliamentarian or an attorney or someone, we could still have 10 persons present at the meeting, they could call the meeting to order, owners would still be able to watch the meeting or listen to the meeting on teleconference or web conference, and then we would call a recess so that owners could return to the meeting and drop in their ballots, which they always would at the meeting. So that was a procedure that we examined with the parliamentarian, we examined to see if it would violate 514B and to see if it would otherwise comply with Hawaii law. Well, the first time we tried it, it was certainly a hit or miss. It was a long meeting, unusually long. We had over 90 attendees by web conference and we found out that the voting procedure, particularly for a large meeting, could be quite unwieldy. And at this project, unfortunately, not like most of our clients, this was a Waikiki project where you had over 80% of the individuals who were not owner occupants. So what do you do with those people when they come check in? Well, what we had to do was they had to go to their car or they had to leave the meeting site and they had to call into the meeting to listen. And you can imagine that was not very popular with a lot of people who attend the meeting. But we were able to conduct the meeting, they sat in their cars, they came back in to cast their votes when it was announced we're going into recess, people may now cast their ballots and if you're off site, please return to the meeting site and cast your ballots. That was a long convoluted process. And frankly, we learned a lot from the first meeting but we did conduct the meeting, we got the business done, we got the board elected, we got the tax rollover resolution adopted. And even though it was an unusually long meeting, we got everything done that we had to get done. That was our first one. So does that mean that your owners, the owners, they came and they registered and then they either went back to their units or they went back to their cars? That's what they had to do. That's what they had to do. Because if you remember at that time, we were still early in the pandemic, the governor or the mayor had not made any ruling on whether or not condominium associations could conduct meetings and all social gatherings were limited to 10 persons. Well, if you've got a nine member board and a parliamentarian or an attorney, that's it at the meeting site, that's all you're gonna get is 10. And so at this first meeting, we learned that that was the way we had to do it. So at this first meeting, because it was a Waikiki meeting when a resort community or a high percentage of tenants as opposed to owner occupants, we learned that that's probably not conducive to that type of project, but be that as it may, it still worked out. And we didn't, even though it was a 400 unit plus project and we had 90 attendees, we still had a very high percentage of attendants based on proxy because the vast majority of owners did turn in their proxies. And as a result of that, we actually had a record attendance for this association. So it did turn out well, but we did learn that this type of hybrid procedure for the very first time that we utilized probably would be best utilized and it has been subsequently for those units which have a high percentage of owner occupants. So you were mentioning that the reason why you had to do it that way was because of the government orders that were in place at that time. And then since then we're now up to the governor's 14th proclamation has to have the orders changed now that affect the way that the annual meetings can be done. Yes, as a matter of fact, they did change. In August, there was an exception put into one of the proclamations in August and I'm sorry, I don't remember the number of the proclamation, but the proclamation has now a carved out exception that community and condominium associations may be conducted as long as social distancing is maintained. So there is now a specific exemption at least on Oahu with respect to the mayor's emergency order that condominium and community associations can conduct their meetings as necessary to conduct legally required business. And obviously a condominium or community association meeting is necessary to conduct legally required business. So we now have that exception but it still presents a problem because if you've got a project where normally 50, 60 or 70 people would attend you still can't maintain social distancing because you can't have a big enough space to house that number of people for a meeting. So even though we have that exception in place it has not changed the procedure I previously described where about we're still utilizing that procedure we'll talk later during your show as far as how that has evolved but we still have the procedure in place where people come down check in we might have more than 10 attendees now depending on the size of the room and if we can keep people six feet apart but at the end of the day it's still gonna be very limited in-person attendance at the meeting and it's still gonna be broadcast on the web and by telephone for those who cannot be physically present. Okay, so what happens if you have a building that has a small percentage of owner occupants and a whole lot of people you have more people who are investor owners how would you conduct the annual? We evolved through the process as follows now with the notice of annual meeting we now have a memo, okay? And the memo explains the COVID procedures that will be implemented at the annual meeting and we encourage owners to of course submit proxies because that reduces the number of attendees yet it does not reduce the number of owners who will be voting at the meeting and that has been very successful particularly in a project where we have a lot of elderly owners either investors or tenants they obviously do not want to attend because of the risk of contracting the virus so we had found that our and my clients who have utilized this we have found the proxy usage has increased dramatically dramatically where before you would have maybe a third of your attendees attending by proxy we're now up at my projects to well over half summing to the 75% range so that the percentage of individuals who utilize proxies as you correctly pointed out Jane particularly at an investor property have really, really moved to a much higher percentage and second, we're now disclosing to owners, attendees that, hey, look, if you're coming we're gonna have a limited number of spaces in the meeting place itself for in-person attendance and if we run out of those space you don't check in, you check in and already we're full then you're gonna either have to stand outside of the meeting space and place and listen on the phone or you're gonna have to return to your car once we made that disclosure after the first meeting or this became a problem we have not received any resistance from owners because they know in advance on what they have to do and the last couple of meetings we conducted Jane, we haven't had more than 10 or 12 people have to sit out in the car, leave the meeting place because they either submitted their proxies they've assigned their proxies or they've made other arrangements because they know this is the procedure that's gonna be utilized. Have you had any issues regarding the voting because a lot of condominiums they have to vote by secret ballot. Right and the voting issue is one of the stickers we've also had to overcome and let me tell you how that first started. As I pointed out before normally the system with ballots is pretty straightforward at condominium associations where people come pick up their ballots and cast them but for these large community associations that's not necessarily feasible. For example, I have a single family home townhouses or a townhouse projects with a thousand units and we had a community association meeting and it wasn't gonna be feasible for people to physically drive down to the meeting place pick up their ballots and then go back because there was no parking at the meeting place. So we scoured the web and we found out that as a result of the COVID crisis there has been a cottage industry of vendors who now provide electronic voting services for condominium and community association meetings. Amazing that a need was found and a process was put in place to meet that need. And basically these vendors do as follows. They set up a website chain, a secured website where all of the owners get their unique user name and password that's unique to their unit. So in other words, Jane, if you lived in unit B104 you would get a username and password for unit number B104 that you would log into this website only during the association's annual meeting. And when you would use that website with your username and password to cast your ballot it would still store your username and password just like it would for any other condominium association when you cast your ballot that it was a properly cast ballot and that it was issued to you by the association but it still would maintain your secret ballot the secrecy of your ballot. We found two, I've used two of these vendors to date and both of them did decent work. I mean, as far as they were able to real time provide the results but the criticism I would have is that it was expensive. These vendors normally charge per attendee. Oh, it's expensive. Well, they normally charge per attendee. So if you had just let's say, by the way, I'm sorry per attendee and that's either in person or by proxy. So let's walk through that. Let's say that you've got a hundred persons in attendance by person or by proxy, okay? These vendors start at $5 an attendee and it depends on the level of service they're providing but $5 is pretty standard. So if it's $5 per attendee and it's gonna be they charge an additional amount per vote you're looking at a hundred attendees you're gonna start at $500. And if there's more than one issue more like let's say you're not just gonna let directors are gonna do something else maybe a bylaw amendment on the ballot they're gonna also charge for that as part of the service they provide. So you can get up very quickly to a hundred person and a hundred person attendee and not only get charged the base $500 it could go to 750 or 1,000 very quickly. And Jane I don't know about you but my clients that are only a hundred unit condominium associations those are big dollars as far as they're concerned. Yeah. They're not looking at spending $5 to $10 per person to hold an annual meeting. And but in the COVID world in a pandemic that's really the most efficient way to conduct the voting because if you still do it the ballot method that I discussed initially that's still done at most of my condominium associations but the larger ones particularly community associations where that's not feasible two of them elected to use this service. And I will tell you that even though it was relatively expensive the service was very well done. And I had no complaints. Let's move on to another area. And so if someone were looking for this type of service where would they go? Condominium Association Electronic Voting. If you do that search on the web you will find numerous vendors who provide that service. We utilized a vendor that was based in Georgia and we utilized a vendor that was based in California for those two meetings. They both performed about equally. I would say the vendor in Georgia was a little more professional, a little more polished but the same system whereby the secured website and the username and password were utilized by both of them. By the way, this doesn't work by phone. This doesn't work by phone everybody. So you could not use this. This has to be a web-based program. So if you have an attendee who cannot utilize a computer or does not have access to a computer they're not gonna get to vote if this system's being utilized. But then this type of voting system is used for large community association. I mean, you wouldn't use it for a condominium, would you? No, no, I think the method that I discussed at the beginning of the show today where they still go past their paper ballot or either the owner or the proxy cast their paper ballot utilizing the procedure where we take a break and they come back to the meeting place and they cast their ballot. It's still the way that I would recommend it for condominium association meetings. Okay. And I understand that some of your meetings, you were talking about community associations which are different from condominiums. They're governed by Hawaii Revised Statutes 421J. Right, now let's move away from condominium and community for just a minute. And Jane, you know, some people in the industry use the term homeowner associations for community association. Right. And as you correctly pointed out condominium associations are governed by Hawaii Revised Statutes chapter 514B. In our world, we call those 514B associations. And for those condominium associations, they normally cannot use any form of virtual meeting. They can't use telephone, they can't use web conference because the statute does not allow them to conduct association meetings in such a method unless it's specifically provided for in their governing documents. Jane, I don't know about you but I have never seen a condominium association where it says they can conduct their annual or special meetings by teleconference or other methods. So normally that's gonna be a tougher one for condominium associations to conduct these hybrid type meetings. Community associations do not have such restrictions. Hawaii Revised Statutes chapter 421J specifically allows community associations to conduct meetings in any way where owners are gonna be able to vote and it's not otherwise prohibitive in their documents. That brings up an interesting point, Jane because you wouldn't have to use this electronic voting procedure if Zoom or the other web-based platform you're using has a built-in voting mechanism. And for example, let's take a look at Zoom. Zoom has a chat function, okay? Right. And so if it's not by secret ballot, okay? And many community associations are not by secret ballot. Owners could actually cast their vote using the chat function. And most platforms allow you to record the chat. So think about that a minute, Jane. You actually get, every owner gets to record their vote during the meeting using the chat function. And as the attorney, and you know how important this is, we can actually record the actual votes and keep them in perpetuity if there's ever a challenge. Right. Now let's talk about a minute. How do you know who's casting the vote when? And this is again, back to the procedure, whether it's a community or condominium association. If you're gonna conduct it by Zoom, you have to make sure that you check every owner in when they call, either by telephone or by web conference, because you wanna make sure who your attendees are. And more importantly, when you take a look at the web platform, because even if people call in by telephone, remember, they're still gonna be identified on the web platform, you're gonna wanna make sure their name and unit number is next to their screen that's on the web-based platform. So normally, Jane, when you go to annual meetings for condor or community associations, you request owners be there 30 minutes to check in. We advise our clients if they're conducting any type of web-based or telephone-based meeting that they have the check-in start one hour before the meeting, because the meeting is, the check-in's typically gonna be twice as long as it would be for individuals who are gonna be there in person. More importantly, if you're using a web-based platform and you're gonna have 100 attendees plus the meeting, you probably wanna have the host functions, which the people are gonna check them in, assigned them more than one host. You wanna do co-hosts perhaps two or three. And the management companies have caught on quickly. Now when the management companies are hosting these type of meetings, they will usually have two or three employees conducting the virtual check-in because they know that if you're only gonna have one person do it, Jane, our first meeting, which went five hours under this program, check-in was an hour and 15 minutes long. Wow. And we have made a huge change. And Chris, do you envision, you know, we don't seem to, there doesn't seem to be an end to the governor's orders. It just seems to go on and on. And we're coming up on a new annual meeting session, season, right? Come January, which is only around the corner, right? The annual meetings are supposed to be scheduled again. So do you see us returning to the regular format or do you think that these virtual meetings are a sign of the future? I got two observations on that. Number one, I think there now has to be a contingency in the legislation to allow web conferencing or virtual meetings. I think- I think that's one thing we're gonna have to go back and do. Right, so, and it's really not too tough to do, Jane, because if you take a look at the statute, the statute says that you can't conduct any type of alternative meeting, except as otherwise specified in the association's governing documents, obviously once you get rid of that sentence, there'll be more flexibility. But the statute right now- It's a strange condominium associations on whether or not they can do this. So while I've worked with my clients in order to do a workaround during the pandemic, I think we have to be prepared, because this has been a learning experience for all of us, that something like this could happen in the future. And since web conferencing and virtual meetings have become such a part of society and business today, we're gonna have to allow condominium associations to conduct their meetings utilizing this type of format. And I think the law has to catch up with that. Right, and we're gonna be meeting with speaker Psyche in December about pending condo legislation. I'm sure this will be an easy fix, just trying to figure out where in the statute we can insert provisions that will allow virtual annual meetings, because I know of a lot of condos who are just so frustrated because they can't have their annual meetings for a number of reasons that I don't wanna go into. But it's just irritating and frustrating for them that they can't have their annual meetings. And I think I see three things in the statute that really need to be included. Number one, that associations may conduct their meetings by virtual means, so long as you can verify the identity of all attendees. Well, Jane, that's pretty easy with visual, right? But you're gonna have a lot of people who attend by phone. So there's still gonna have to be some type of methodology in place to verify their identity. I don't know how that's to be done, but that is a concern obviously, because you don't want people who don't have the right to vote to cast vote. That's number one. Number two, I think you also have to say in the statute that not only attend and participate, but owners shall have the right to vote in meetings, at virtual meetings, because that's a key obviously. And number three, that to their extent, there is a secret ballot requirement in the governing documents that by vote of the majority of owners, that can be waived. But I'm sorry, a vote of majority of those in attendance at the meeting, that can be waived. I think that's critical. Yeah, that's a good, those are good ideas. Right, so those three. And we run out of time, so I'm sure what I'd like to do is, maybe in the beginning of the year, maybe in February have another episode where you will join us and update us as to what's happening. Well, I've got two more studies before the end of the year, Jane, so I'll probably have more to update you. Okay, thank you, Chris, for joining us. And for those who have tuned in, thank you very much for joining us for this episode and for supporting our program. And please tune in next week, Thursday for another episode of Condo Insider. And it will be Jonathan Billings who'll be co-hosting. Thank you and mahalo. Thank you.