Many clients of Hoffman Law LLC are aware that Ed Hoffman serves as the current Chair of the Community Associations Institute (CAI) Pennsylvania Legislative Action Committee (PA LAC) and have increasingly been inquiring about PA House Bill 1795 which was signed into law on November 3, 2022 and becomes effective on May 2, 2023. The Amendments, now known as Act No. 115 of 2022, made various changes and additions to the three Pennsylvania common interest community statutes: the Uniform Condominium Act (UCA), the Uniform Planned Community Act (UPCA) and the Real Estate Cooperative Act (RECA) (we will discuss the changes to the UCA and the UPCA below). While it’s not on the level of Peter Frampton, House Bill 1795 has indeed come alive!
Independent Reviewer
To begin, for condominium associations and master associations that have over 500 units, votes in an election of the association must be submitted to an “independent reviewer” pursuant to amendments to Sections 3303(e)(3) of the UCA and 5222(e.1) of the UPCA. (It is noted that §5222 of the UPCA specifically applies to “master” associations, so if the intent was to have it to apply to all planned communities, the UPCA will presumably need to be amended once again).
What is an independent reviewer? An independent reviewer is defined in §3103 of the UCA and §5103 of the UPCA as a person who is selected by the Executive Board of a condominium and/or planned community and satisfies all of the following:
(1) Holds a certificate as a certified public accountant issued by the Commonwealth, is
licensed to practice law in this Commonwealth, or is a “vote management system”. (A “vote management system” is defined in §3103 of the UCA and §5103 of the UPCA as “a third-party vendor who operates a digital or subscription service that securely manages the conduct of elections and voting procedures” – in other words, a commercial, association voting management solutions provider).
(2) Is not a unit owner of the condominium or planned community, directly or indirectly.
(3) Has no immediate family relationship (i.e., parent, child, spouse, brother or sister) with a unit owner of the planned community or the condominium or planned community manager.
(4) Has no financial interest shared with a unit owner of the condominium or planned community manager.
(5) If compensated by the declarant, a director, the association or the condominium or planned community manager, has disclosed the terms of the compensation to all unit owners of the condominium or planned community at a scheduled meeting.
While the above provisions related to an independent reviewer apply to all condominium associations and master associations that have over 500 units, Sections 3303(e)(3) of the UCA and 5222(e.1) of the UPCA also allow condominium associations and master associations that are under 500 units to essentially “opt in” to utilize an independent reviewer, when approved by a vote of at least 51% of the unit owners.
Finally, Sections 3303(e)(3) of the UCA and 5222(e.1) of the UPCA provide that the board shall (i.e., must) present the official election results based on the certified election report from the independent reviewer at a meeting of the unit owners and shall (i.e., must) enter the results in the meeting records.
Removal of Board Members in Condominium Associations
Section 3303(g) was added to the UCA to clarify how board members can be removed with 2/3 of vote of the unit owners:
Removal of member of executive board.–Notwithstanding any provision of the declaration or bylaws to the contrary, the unit owners, by a two-thirds vote of all persons present and entitled to vote at any meeting of the unit owners at which a quorum is present, may remove any member of the executive board with or without cause, other than a member appointed by the declarant, provided notice of the intention to remove a member of the executive board is given with the notice of the meeting at which such removal is considered, as provided under section 4303(g) (NOTE: TYPO IN AMENDMENT? – the referenced section is from a different statute) (relating to executive board members and officers).
(It is noted that the UPCA already had a similar parallel provision at Section 5303(f)), therefore a new section was not required to be added to the UPCA).
Removal of Board Members and Officers – Required Bylaw Language
Section 3306(a)(3) of the UCA and Section 5306(a)(3) of the UPCA both provide that the Bylaws for an association must provide for the qualifications, powers and duties, terms of office and manner of electing executive board members and officers and removing executive board members and officers under section 3303(g) and 5303(f) (relating to executive board members and officers) and filling vacancies.
Good Standing
As it applies to condominiums and master associations, Sections 3303(e)(3) of UCA and Section 5222(e.1) of the UPCA now provide that “in order to be eligible to vote in the election, a unit owner shall be in good standing with the association.” (It is noted that a “unit owner in good standing” is already defined in §3103 of the UCA and §5103 of the UPCA as a unit owner who is current in payment of assessments and fines, unless the assessments or fines are directly related to a complaint filed with the Bureau of Consumer Protection in the Office of Attorney General regarding §3308 of the UCA or §5308 of the UPCA (relating to meetings); §3309 of the UCA or §5309 of the UPCA (relating to quorums); §3310 of the UCA or §5310 of the UPCA (relating to voting; proxies); and §3316 of the UCA or §5316 of the UPCA (relating to association records)).
Electronic Meeting Notices
A unit owner can now receive meeting notices for a condominium or planned community by electronic means if the unit owner has agreed in writing (opts in) to accept the notice by electronic means or where the bylaws permit electronic notices. See §3308(a) of the UCA and §5308(a) of the UPCA.
Electronic Meetings
Board and association meetings in condominiums and planned communities can be now be held using remote technology, i.e., virtually or by telephone conference, unless the bylaws provide otherwise. See §3308(c) of the UCA and §5308(c) of the UPCA.
While the bylaws must still require that a meeting of the association occur at least once each year, the requirement that the yearly meeting be held in person was eliminated. See §3308(a) of the UCA and §5308(a) of the UPCA.
Participation in Board or Association Meetings By Remote Technology
Unless the bylaws provide otherwise, an individual may now participate in a meeting of the board or association by means of a conference telephone or other remote electronic technology, including the internet, which allows participants in the meeting to hear each other. Participation in such a meeting shall be deemed in-person attendance at the meeting. See §3308(c) of the UCA and §5308(c) of the UPCA.
Bylaw Requirements for Delivery of Notice of Virtual Meetings
Pursuant to Sections 3308(b) of the UCA and Section 5308(b) of the UPCA, Bylaws in condominium associations and planned communities must [now] require that notice of virtual meetings of the association be given by:
(1) First class or express mail, postage prepaid, or courier service, charges prepaid, to the
mailing address of each unit or to any other mailing address designated in writing by the unit owner. Notice shall be deemed to have been given to a unit owner when deposited in the United States mail or with a courier service for delivery to the unit owner.
(2) Facsimile transmission, e-mail or other electronic communication to the unit owner’s facsimile number or address for e-mail or other electronic communications supplied by the unit owner, provided that the unit owner has agreed in writing to accept the notice by electronic means or where the bylaws expressly permit means of delivering electronic notice. Notice shall be deemed to have been given to the unit owner when sent.
Approved Methods of Voting – Now Includes Electronic Voting
Sections 3310(e) of the UCA and 5310(e) were added to the UPCA related to approved methods of voting, and provide as follows:
(1) Except to the extent expressly prohibited in an association’s declaration or bylaws, the voting rights of a unit owner may be cast or given in the following ways:
(i) in person or by proxy at a meeting of the association;
(ii) by absentee or electronic ballot; or
(iii) by another method of voting expressly provided in the association’s declaration or bylaws.
(2) An absentee or electronic ballot may:
(i) Be counted as a unit owner present and voting for the purpose of establishing a quorum, and otherwise, only for agenda items appearing on the ballot.
(ii) Not be counted even if properly delivered, if the unit owner attends the meeting to vote in person. A vote cast at a meeting by a unit owner supersedes a vote submitted by absentee or electronic ballot previously submitted for that agenda item.
(3) The term “electronic ballot” means a ballot cast or given by electronic transmission
over the internet, vote management system or the association’s community network, whether by direct connection, intranet, telecopier, electronic mail or other technological means, if the identity of the unit owner submitting the ballot can be confirmed and a receipt of the electronic transmission and ballot can be made available to the unit owner.
Acclamation (for an uncontested election)
Section 3310(f) was added to the UCA and Section 5310(f) was added to the UPCA with respect to acclamation for uncontested elections. Unless the bylaws of the association provide otherwise, these new statutory provisions provide that in the event that an election for a position on the board is uncontested, the officer or chair presiding at the election meeting may declare the nominee(s) elected by acclamation after determining there are no further nominations.
Pre-Election Sessions (Meet the Candidates) for Contested Elections
Pursuant to Sections 3308(d) of the UCA and Section 5308(d) of the UPCA, Bylaws in condominium associations and planned communities must require that in the event that there are more candidates than open positions on the executive board (i.e., a contested election), then, upon request of one or more of the candidates, the association shall hold a special session at least seven days before the election of a board member to allow the unit owners to meet each candidate for an executive board position. Each candidate for an executive board position shall have equal time to address the unit owners during a special session.
Recorded Meetings
Pursuant to Sections 3308(e) of the UCA and Section 5308(e) of the UPCA, unless the bylaws provide otherwise, meetings of the association may be recorded by the board via audio or video technology, provided that an announcement is made by the presiding officer at the commencement of the meeting that the meeting will be recorded. A recorded meeting shall be maintained and available to unit owners for a period of no less than six (6) months after the date of the meeting.
Quorum for Association Meetings After Multiple Attempts
Pursuant to Sections 3309(a)(2) of the UCA and Section 5309(a)(2) of the UPCA, except as otherwise provided in the declaration or bylaws of the association, if the association can’t obtain a quorum for any meeting of the association and fails to meet a quorum at two subsequent meetings, the association may utilize the following provisions contained in Section 5756(b) of the PA Non-Profit Corporation Law (relating to quorum) to meet quorum requirements:
(b) Exceptions.–Notwithstanding any contrary provision in the articles or bylaws, those members entitled to vote who attend a meeting of members:
(1) At which directors are to be elected that has been previously adjourned for lack of a quorum, although less than a quorum as fixed in this section or in the bylaws, shall nevertheless constitute a quorum for the purpose of electing directors.
(2) That has been previously adjourned for one or more periods aggregating at least 15 days because of an absence of a quorum, although less than a quorum as fixed in this section or in the bylaws, shall nevertheless constitute a quorum for the purpose of acting upon any matter set forth in the notice of the meeting if the notice states that those members who attend the adjourned meeting shall nevertheless constitute a quorum for the purpose of acting upon the matter.
Amendments of Bylaws
Sections 3306(a)(6) of the UCA and Section 5306(a)(6) of the UPCA were amended to clarify how bylaws may be amended, as follows:
(i) The bylaws may be amended only by vote or agreement of unit owners of units to which at least:
(A) fifty-one percent of the votes in the association are allocated;
(B) any larger majority as specified in the bylaws; or
(C) a smaller majority as specified in the bylaws if all of the units are restricted
exclusively to nonresidential use.
(ii) The vote may be taken only at a scheduled meeting and following notice to the unit owners as provided under sections 3308 of the UCA or 5308 of the UPCA (each relating to meetings) that was advertised 14 days in advance to the unit owners. Absentee voting shall be permitted to unit owners provided that the ballots must be submitted to an independent reviewer by the commencement of the scheduled meeting.
Retroactivity
At this stage it is not entirely clear what the desired intent was with respect to retroactivity of the amendments to communities that precede the enactment of the UCA and/or the UPCA, or with respect to general principles of statutory retroactivity in general. It is expected this may become an issue that will arise during the 2023-2024 legislative session, especially if challenges to the applicability of any of the amendments begin to be raised by communities.
Parting Words
This discussion of PA House Bill 1795, now known as Act No. 115 of 2022, and specifically, the various changes to the UCA and the UPCA, is intended to provide a summary of the current state of the statutory amendments as of the posting date of this Hoffman Law LLC Blog post on January 30, 2023. (The amendments, as passed, can be found here). It is expected that certain provisions may change or be further amended during the 2023-2024 legislative session – in other words, House Bill 1795 will continue to stay alive! Stay tuned.
– Edward Hoffman, Jr., Esq., CCAL