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In her hit single “Ironic,” Canadian pop star Alanis Morissette bemoans traffic jams when you’re already late, free rides when you’ve already paid, and a laundry-list of other unfortunate events, none of which are actually ironic. Thus — ironically -- the only irony in her song is its title.
In its Assembly Bill 502, the California Legislature hits a similar note. Ostensibly introduced to permit election by acclamation for all HOAs, AB 502’s laundry-list of legal malapropisms will reduce the practice for most, bar it for some, and add yet more cost and complexity to board elections.
In its Assembly Bill 502, the California Legislature hits a similar note. Ostensibly introduced to permit election by acclamation for all HOAs, AB 502’s laundry-list of legal malapropisms will reduce the practice for most, bar it for some, and add yet more cost and complexity to board elections.
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Prior to Senate Bill 323, a typical HOA board election would require 60-75 days to complete. SB 323 extends that timeline to at least 105 days - more like 120 in practice - and imposes complex new notice requirements on associations.
The following represents a prudent 130-day timeline for conducing SB 323 compliant board elections. This timeline is longer than that required by law, but its length ensures sufficient time for boards to understand SB 323's complex new requirements, select workable dates, retain a qualified inspector, and prepare SB 323's multiple new forms.
The following represents a prudent 130-day timeline for conducing SB 323 compliant board elections. This timeline is longer than that required by law, but its length ensures sufficient time for boards to understand SB 323's complex new requirements, select workable dates, retain a qualified inspector, and prepare SB 323's multiple new forms.
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Election by acclamation is the process of declaring a slate of director-candidates elected when the number of candidates at the deadline for nomination is equal to or less than the number of board positions to be filled, and thus the results a foregone conclusion.
Prior to Senate Bills 323 and 754, the HOA legal community was split on the advisability of acclamation. Some attorneys took the position that requiring zero-budget nonprofits to incur the expense and effort of a mailed secret ballot vote in the face of a known conclusion was little better than digging a hole in the yard, filling it with money, and lighting it on fire. Others read Civil Code section 5100(a)’s “shall” as requiring such folly.
Prior to Senate Bills 323 and 754, the HOA legal community was split on the advisability of acclamation. Some attorneys took the position that requiring zero-budget nonprofits to incur the expense and effort of a mailed secret ballot vote in the face of a known conclusion was little better than digging a hole in the yard, filling it with money, and lighting it on fire. Others read Civil Code section 5100(a)’s “shall” as requiring such folly.
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Senate Bill 323 added new Civil Code section 5105(b), which provides that “[a]n association shall disqualify a person from a nomination as a candidate for not being a member of the association at the time of the nomination.”
An exception to this requirement is provided by 5105(b)(2), which provides that “[i]f title to a separate interest parcel is held by a legal entity that is not a natural person, the governing authority of that legal entity shall have the power to appoint a natural person to be a member for purposes of this article.”
An exception to this requirement is provided by 5105(b)(2), which provides that “[i]f title to a separate interest parcel is held by a legal entity that is not a natural person, the governing authority of that legal entity shall have the power to appoint a natural person to be a member for purposes of this article.”
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This blog post is a running list of Senate Bill 323's ambiguities and flaws that seem problematic enough to complain about but not problematic enough to waste a blog post on. I myself feel like running away.
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Section 4041 of the Davis-Stirling Act requires homeowners to annually disclose their current mailing address and their HOA to annually solicit the same. These important disclosure and solicitation requirements help ensure associations can effectively communicate with their constituent members, a necessary aspect of good governance.
Senate Bill 392 amended Section 4041 to instead provide that owners must disclose their “preferred delivery method,” which must include the options of receiving notices at a mailing address, an email address, or both. The bill also amended Section 4040 to provide that HOAs must deliver all individual notices by each member’s preferred method.
Senate Bill 392 amended Section 4041 to instead provide that owners must disclose their “preferred delivery method,” which must include the options of receiving notices at a mailing address, an email address, or both. The bill also amended Section 4040 to provide that HOAs must deliver all individual notices by each member’s preferred method.
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Senate Bill 323 continues Civil Code section 5100(f), which provides that "[d]irectors shall not be required to be elected pursuant to this article if the governing documents provide that one member from each separate interest is a director."
Section 5100(f)'s reference to "this article" is to the 2006 Election Law, Civil Code sections 5100-5145, which of course includes the bulk of SB 323.
Section 5100(f)'s reference to "this article" is to the 2006 Election Law, Civil Code sections 5100-5145, which of course includes the bulk of SB 323.
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Senate Bill 323 added Civil Code section 5105(e), which provides that “[a]n association shall not disqualify a person from nomination if the person has not been provided the opportunity to engage in internal dispute resolution.”
Read literally, Section 5105(e) appears to provide that an offer of internal dispute resolution (IDR) by an association is required in order to enforce any candidate qualification, even those which are generally not subject to "resolution," such as membership status, duration of membership, or disqualification based on co-ownership. SB 323 also fails to reconcile the conflicting requirements that associations shall disqualify non-members but also shall offer IDR before doing so.
Read literally, Section 5105(e) appears to provide that an offer of internal dispute resolution (IDR) by an association is required in order to enforce any candidate qualification, even those which are generally not subject to "resolution," such as membership status, duration of membership, or disqualification based on co-ownership. SB 323 also fails to reconcile the conflicting requirements that associations shall disqualify non-members but also shall offer IDR before doing so.
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Senate Bill 323 amended Civil Code section 5105 to provide that election rules must contain a laundry-list of mandatory new provisions. As discussed in my other blog posts, however, many of these provisions will conflict with most communities' existing governing documents.
Civil Code section 4205 currently controls conflicts between the law and governing documents and between governing documents themselves. "To the extent of any conflict," the Section provides that the law prevails, then CC&Rs, then articles, then bylaws, with operating rules - including election rules - at the bottom of the pile.
Civil Code section 4205 currently controls conflicts between the law and governing documents and between governing documents themselves. "To the extent of any conflict," the Section provides that the law prevails, then CC&Rs, then articles, then bylaws, with operating rules - including election rules - at the bottom of the pile.
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Senate Bill 323 revised Civil Code section 5145(a) to provide that, "[i]f a member establishes ... that [association election law was] not followed, a court shall void any results of the election unless the association establishes ... that the association’s noncompliance ... did not affect the results of the election."
"Did not affect the results of the election" is ambiguous. First, what are "the results of the election?" Since Civil Code section 5145 controls all causes of action in regards to Article 4 (Civil Code §§ 5100-5145), "the results of the election" encompasses each and every right afforded under Article 4. For example, if a member's free speech or inspection rights are violated, arguably such illegality affected "the results of the election" even if it had no effect on the proposition put to the members.
"Did not affect the results of the election" is ambiguous. First, what are "the results of the election?" Since Civil Code section 5145 controls all causes of action in regards to Article 4 (Civil Code §§ 5100-5145), "the results of the election" encompasses each and every right afforded under Article 4. For example, if a member's free speech or inspection rights are violated, arguably such illegality affected "the results of the election" even if it had no effect on the proposition put to the members.