Category: Senate Bill 323

SB 323: the butterfly effect, with lawyers

5/16/2023

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.

SB 323: the chicken or egg of compliance

2/13/2023

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.

SB 323: kicking small associations when they're down

12/12/2022

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.

SB 323: fiduciaries not fiduciary-ing

9/5/2022

Senate Bill 323 revised Civil Code section 5145(a) to provide that “[a] member of an association may [sue] for a violation of this article by the association … within one year of the date that the inspector notifies the board and membership of the election results or the cause of action accrues, whichever is later.”

Civil Code section 5120(b), however, currently provides that boards are responsible for notifying the membership of election results. If an inspector does so, this in and of itself could arguably constitute an election law violation.

SB 323: making associations great again

6/14/2022

Senate Bill 323 added new Civil Code section 5105(c)(4), which provides that an association may disqualify a candidate for the board “if that person discloses, or if the association is aware or becomes aware of, a past criminal conviction that would, if the person was elected, either prevent the association from purchasing the fidelity bond coverage required by [Civil Code s]ection 5806 or terminate the association’s existing fidelity bond coverage.”

This optional qualification raises a number of questions and problems, both for associations which adopt it and those which do not:

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SB 323: the butterfly effect, with lawyers

SB 323: the chicken or egg of compliance

SB 323: kicking small associations when they're down

SB 323: fiduciaries not fiduciary-ing

SB 323: making associations great again

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