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Extension of the term of office of housing cooperative’s governing bodies during the epidemic period

Pursuant to the Act on Housing Cooperatives, by default the management board should convene a general meeting at least once a year within 6 months after the end of the financial year. In practice this means that a general meeting of members should be held no later than June 30th each year. The date of holding a general meeting is often of significance for the moment when the term of office of members of the cooperative’s governing bodies, especially supervisory boards, ends. Often the statutes link the term of office with the moment the general meeting is held.

The provisions of the “Covidowa” Law (Law on Amendments to the Law on Special Arrangements for Preventing, Counteracting and Combating COVID-19) due to the state of epidemic extended the term of office of housing cooperative’s governing bodies. According to Article 90 of the cited Act, the deadline for convening a general meeting of a cooperative that falls during a state of epidemic or epidemic threat is extended. Therefore, the management board may postpone the convening of a general meeting for up to 6 weeks after the state is revoked.

In connection with the foregoing, the legislature also extended the term of office of members of housing cooperative’s governing bodies by enacting the provision of Article 90a according to which, “If the term of office of a cooperative’s supervisory board or board of directors expires during a state of epidemic emergency or a state of epidemic which is in effect on the day this Act comes into force or which is declared to be in effect immediately after the period in effect on the day this Act comes into force, it shall be extended until the date on which the first general meeting of the cooperative is convened within the period referred to in Article 90.”

A legal norm has been adopted that by law extends the term of office of the supervisory board or management board if the term of office has expired or will expire during a state of epidemic emergency or a state of epidemic. Some practitioners indicate that, as a result of this norm, the term of office of the members of the bodies has been extended until the expiration of the period indicated in Article 90 (i.e., 6 weeks after the cancellation of the epidemic state).

The above view is incorrect and does not deserve to be accepted.

It should be noted that the Act on Housing Cooperatives and analogously the “Covidava” Act set the maximum, limiting deadline for the management board to convene a general meeting which may also be held prior to this date.

There is no provision that would prohibit holding a general meeting during the state of an epidemic (only sanitary-epidemiological restrictions apply which may make it difficult or impossible to hold a meeting during such period).

Article 90a extends the term of office of supervisory boards, but only until the first general meeting is convened during the extended period (“the period referred to in Article 90”) in which a general meeting should be held. Thus, if the managemet board calls a general meeting of its members during the epidemic or up to six weeks after its cancellation, the term of office of the members of the governing bodies will be extended, but only until the general meeting is held. Article 90a does not provide that the term of office is extended until the end of the period referred to in Article 90, but only until the first general meeting is held during that period.

The same position was expressed by the Polish Revision Association of Housing Cooperatives  (“on the statutory extension of the term of office of the governing bodies of housing cooperatives and the possibility to convene a general meeting in a stationary format”).

In the opinion of the Association, the notion of convening the first general meeting within the deadline referred to in Article 90 should be understood as the first general meeting in a stationary format convened between the period from the entry into force of the Act of 19 June 2020 on interest subsidies for bank loans granted to entrepreneurs affected by the consequences of COVID-19 and on simplified proceedings for approval of the arrangement in connection with the occurrence of COVID-19, i.e. from 24 June 2020 to 6 weeks from the date of cessation of the state of epidemic threat or the state of epidemics. Thus, this term does not include the adoption of resolutions by the general meeting in writing or by means of direct remote communication.

In the opinion expressed by the Revision Association it was also pointed out that “if the first general meeting is convened within the deadline referred to in Article 90, the term of office of statutory bodies shall expire on the date of holding this general meeting, and consequently, members of the governing bodies of a new term of office should be elected at this general meeting.” The above regulation does not limit housing cooperatives in convening general meetings in a stationary format if the sanitary regime regulations concerning e.g. the limit of persons during meetings allow for it. To sum up, when convening a general meeting during an epidemic, one should remember to appoint members of the supervisory board if the statute binds the expiry of their term of office to holding a general meeting.