Electronic Voting for Pennsylvania Associations
The right to participate in governance is fundamental to the concepts of condominium and planned community. For decades, unit owners have exercised these rights by casting election, amendment and budget votes in person or via paper ballots. Enter COVID-19, which has painfully highlighted the need for (and availability of) “virtual” technologies – including for the casting of votes. As associations seek to take advantage of alternatives to traditional paper ballots, efficiency and convenience must nonetheless yield to documentary restrictions.
Technology invariably outpaces the law. Although Pennsylvania corporate statutes were more recently updated to provide for use of email and internet technologies, similar amendments to the UCA and UCPA are only now getting the legislature’s attention (see legislative update in this issue). It is thus not surprising that even recently drafted association documents fail to provide for electronic voting. A typical bylaw provision may provide as follows:
A vote may be cast in person, by proxy or by absentee ballot. …. Proxies shall be duly executed in writing, shall be valid only for the particular meeting designated therein, and must be filed with the Secretary of the Association before the appointed time of the meeting. …. No proxy shall be valid for a period in excess of one year after the execution thereof.
Few associations utilize rollcall (or show of hands or verbal) means for membership votes; we are thus accustomed to paper ballots or paper proxies. §45 of Robert’s Rules of Order, 10th Edition, refers to ballots as “slips of paper on which the voter marks his vote”. The UCA and UPCA are not instructive in this regard; indeed neither statute contains the words “ballot” or “paper”. Sections 3310/5310 of the UCA/UPCA, in relevant part provides as follows:
(b) PROXIES.– Votes allocated to a unit may be cast pursuant to a proxy duly executed by a unit owner. If a unit is owned by more than one person, each owner of the unit may vote or register protest to the casting of votes by the other owners of the unit through a duly executed proxy. A unit owner may not revoke a proxy given pursuant to this section except by actual notice of revocation to the person presiding over a meeting of the association. A proxy is void if it is not dated or purports to be revocable without notice. A proxy terminates one year after its date unless it specifies a shorter term.
Consistent with the sample bylaws provision, proxies must be duly executed – thus suggesting paper. However, we have come to recognize that the words “get it in writing” no longer require physical paper. Neither the sample bylaws provision nor the UCA/UPCA expressly mandate paper. And although likely written before email and the internet were even thought possible, use of these technologies is not prohibited. Most court filings are now electronic; signatures are routinely notarized electronically; contracts are finalized by clicking a tab on the internet. The casting of unit owner votes is not so unique as to require an exception to this trend. Necessary is that the right to cast the vote is preserved, that the vote is accurate and secure, and that an auditable record is created.
For Associations incorporated under the Pennsylvania Non-Profit Corporation Law, use of electronic technology is expressly permitted by statute:
5708. Use of conference telephone or other electronic technology.
(a) Incorporators, directors and members of an other body.–Except as otherwise provided in the bylaws, one or more persons may participate in a meeting of the incorporators, the board of directors or an other body of a nonprofit corporation by means of conference telephone or other electronic technology by means of which all persons participating in the meeting can hear each other. Participation in a meeting pursuant to this section shall constitute presence in person at the meeting.
(b) Members.–Except as otherwise provided in the bylaws, the presence or participation, including voting and taking other action, at a meeting of members, or the expression of consent or dissent to corporate action, by a member by conference telephone or other electronic means, including, without limitation, the Internet, shall constitute the presence of, or vote or action by, or consent or dissent of the member for the purposes of this subpart.
Accordingly, incorporated associations may adopt procedures for voting by email, internet or electronic means; provided that the bylaws do not contain restrictions to the contrary. Bylaw amendments for this purpose may thus be unnecessary. Even absent incorporation or clear statutory guidance, however, associations may nonetheless be authorized to utilize electronic voting technologies.
The Superior Court of Massachusetts recently ruled on the validity of an association election which, in the absence of clear documentary or statutory authority, was held entirely by electronic means. In Gutierrez v. Flagship Wharf Condominium Association (after losing her bid to run for election to the board of directors) a disappointed candidate challenged the election by claiming that the association’s electronic voting procedures violated the bylaws. The bylaws for Flagship Wharf contained a provision similar to the sample quoted above – it did not address or prohibit electronic voting; it did not require paper ballots. In its effort to modernize and take advantage of available efficiencies, the Flaship Wharf board decided to hold the 2019 election without paper ballots. The process and procedure were explained in various letters and announcements prior to the meeting. All owners were provided secure links through which they could cast their votes electronically. For owners unfamiliar with (or without access to) the required technology, tablets were made available in the building before and during the election meeting. As expected, more than 77% of owners voted. The plaintiff did not challenge the vote tally or allege voting irregularities – her claim was limited to the procedure (i.e. she insisted that paper ballots were required or that the bylaws first be amended to permit electronic voting).
Holding that the board’s electronic voting procedures were in “substantial compliance” with the bylaws, the court rejected the plaintiff’s claim:
Contrary to the contentions of the plaintiff, … the By-Laws of the Flagship Wharf Condominium Association do not mandate paper ballots or prohibit electronic voting. The medium for the voting process is not specified, beyond the entitlement of each unit owner, personally or through a designee, to vote in each annual election. The implementation of electronic voting, while not depriving any unit owner of voting in person at the meeting, gave unit owners the additional option of casting their votes electronically during the week leading up to the annual meeting. The language of [the bylaws], when considered in conjunction with the scope of the powers and authority granted the Board …, leaves the Board significant latitude in establishing the voting procedure, and I do not find that the Board overstepped its authority in the implementation of electronic voting for the 2019 election.
Significantly, the court relied on the board’s broad governance powers to adopt procedures “necessary and proper for the sound management of the Condominium”. Also clear is that the voting system was unambiguously announced and made available to all owners. Absent a challenge to the integrity of the outcome, the court found no basis to deem the procedure invalid or the election improper.
The Gutierrez court permitted the board to utilize electronic voting without first adopting an amendment to the bylaws (and without statutory authority). Whether the outcome would have been the same in Pennsylvania is difficult to predict. However, the analysis is based on bylaws provisions not unlike those found in Pennsylvania association documents. The take-away, therefore, is that even for unincorporated Pennsylvania associations, electronic voting may be permitted without formal document amendments. Irrespective of an association’s corporate status, we nonetheless recommend that boards seek legal review before adopting procedures or amendments to provide for electronic voting.
This article is not legal advice and is provided for informational purposes only. Actual legal advice can only be provided after consultation by an attorney licensed in your jurisdiction.