Modern society is moving toward better, faster, and easier methods of communication and transacting business. There was a time when sending a letter was the standard form of communication. Indeed, “regular mail” and hard-copy printed versions of documents are still the standard in most legal systems in the United States. However, the trend over the past several years has been to move to faster, more efficient methods of communicating and operating.
Unfortunately, legal systems are often the last to join the party. The laws involving homeowners associations and condominiums are no different. In fact, many associations find themselves stuck with documents drafted years ago that never anticipated new forms of communicating and conducting association business. One of the most common questions I answer from homeowner’s association boards and property managers is whether their association can use electronic voting or other methods of electronic communication to accomplish the business of their community.
Although it greatly depends on the specific association’s documents, two issues are common hurdles that need to be addressed before your association can use electronic communications and electronic voting as standard methods: (1) Notice and (2) Signatures.
For most associations, notice is the first hurdle that must be overcome. Often an association’s documents specifically require that any notice of a meeting or other association function be mailed to the members. Where an association’s documents require mailing, it would take an amendment to the documents before electronic notices would be permitted.
In general, both North Carolina and South Carolina allow an association to act without a meeting if the association delivers a written ballot to every member entitled to vote on the matter. Delivery can include mailing or electronic delivery. Therefore, in theory, any written ballot can be sent to members electronically.
By statute in North Carolina, an association may generally send notices to a member by electronic methods if the member has designated in writing for the association to do so. The approach is the same in South Carolina unless an association’s documents specifically forbid doing so. For each member who has provided an email address, the association could then send an electronic meeting notice to that member rather than a hard copy.
The second hurdle to overcome for most associations is proving that members have signed an instrument. In traditional terms, a signature is a hand-written version of a person’s name. The purpose of the act of signing is to authenticate or approve the document that has been signed. The most common issue that arises with signatures is verifying that a signature was the act of the person whose name appears on the document, rather than someone purporting to be that person.
In terms of modern technology, what is sufficient to satisfy the signature requirement? Under both North Carolina and South Carolina law, an electronic signature can be an electronic sound, symbol, or process attached to, or logically associated with, a record and executed or adopted by a person with the intent to sign the record. In essence, a “signature” can be a sound, a symbol, or even a process so long as it is used with the intent to sign or authenticate a record.
At a minimum, emails should summarize the issue for which a vote is submitted and include the person’s name who submitted the vote. In addition, there should also be some indicia of authenticity. Recall that both North Carolina and South Carolina require a sound, symbol, or other process in order to authenticate the communication. So long as it is authenticated, a good approach would be to include a specific phrase at the end of the email such as:
I hereby approve the action proposed in this email and give my consent thereto. My typed name at the end of this email constitutes my signature and is evidence of my approval. /s/ David C. Wilson
Finally, North Carolina goes one step further than South Carolina by requiring that votes submitted electronically either set forth or be submitted with information indicating that the vote was authorized by that member. Again, the concern is making sure that the vote was actually the act of the person who is the member of the association and not someone else. In other words, North Carolina also requires that associations using electronic voting ensure that the votes submitted are authentic. Associations that have used electronic voting have developed various methods for fulfilling this requirement.
If you have questions about whether or how your homeowners association or condominium can employ electronic voting or electronic notices please contact me. I work closely with associations and property managers on a regular basis and would be glad to review your association’s restrictions to see whether, and under what conditions, your association may be able to take advantage of electronic notices and electronic voting.