In her 1996 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.
According to Google, “acclamatio” were ritual Roman chants used to indicate approval, like “stab him in the throat!” at gladiatorial games. In the decidedly less fun corporate context, “election by acclamation” means any form of voice vote. HOAs, in turn, use the term to mean uncontested appointment.
Whatever you want to call it, skipping a costly and difficult paper ballot election when the number of candidates is not more than the number of open board seats - and thus the result a foregone conclusion - makes sense. And yet - and yet! - Section 5100(a)(1) of the Davis-Stirling Act currently provides that
[n]otwithstanding any other law or provision of the governing documents, elections regarding [the] election … of directors … shall be held by secret ballot.
Welcome to Crazytown, population everyone except a handful of huge HOAs.
AB 502 = Less Acclamation
“Notwithstanding” this mandate, many HOAs have long relied on “other laws” to justify their use of acclamation. These include authorities that provide that the law favors substance over form, does not require idle acts, and that a ballot that offers no choice is not an election. Not surprisingly, these big kid interpretations are wildly popular and rarely challenged. “Stop, you’re saving me money!” sobbed no homeowner-plaintiff ever.
Assembly Bill 502, however, will expressly condition the use of acclamation on whether an HOA “has held a regular election for the directors in the last three years.” This “regular election” requirement will torpedo the “other laws” discussed above in favor of an express requirement that HOAs conduct full-blown elections at least once every three years if they wish to avail themselves of acclamation.
Consider an HOA with a staggered board and the usual staggering nominee apathy. Election after election, the incumbents are the only martyrs willing to step up, and so - election after election - the board skips balloting and seats the candidates via acclamation. AB 502’s regular election requirement will slash that HOA’s use of acclamation by compelling a full-blown vote every second or third cycle.
One would think a provision in a pro-acclamation bill that dramatically reduces its availability and compels costly, pointless elections would offer an array of amazing - or at least some - benefits. One would be wrong:
Ironically, the Legislature never seems to consider whether piling ever-more cost and complexity on HOA elections will have the perverse effect of encouraging illegal disqualifications. “Sharon, if you run we’ll have more candidates than seats and thus spend thousands on a vote - step down.”
E = mc What?
As discussed above, AB 502 will only permit acclamation if an HOA has held a regular election for the directors in the last three years. According to the bill, this three-year period “shall be calculated from the date ballots were due in the last full election to the start of voting for the proposed election.” But this puzzling metric opens a buffet of canned worms:
A Self-Missing Deadline
AB 502 will provide that the threshold for acclamation is “when, as of the deadline for submitting nominations provided for in subdivision (a) of Section 5115, the number of qualified candidates is not more than the number of vacancies to be elected.”
But “the deadline for submitting nominations provided for in subdivision (a) of Section 5115” is just that, the deadline for submitting nominations. Given the reality of last-minute submissions, whether or not a nominee is qualified typically cannot be determined until after that deadline.
In addition, Section 5015(e) of the Davis-Stirling Act currently 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.” In order to “provide this opportunity,”many HOAs make a blanket offer of IDR via their call for candidates form. Again, given the reality of last-minute submissions, the actual session itself must necessarily be conducted after the deadline for submitting nominations.
Consider an election with three open seats. At the deadline for submitting nominations, four nominees have applied. By AB 502’s metric, the number of qualified candidates - or, more accurately, nominees - is more than the number of vacancies to be elected, and thus a full-blown election is required.
One nominee, however, has accepted the HOA’s offer of IDR and is validly disqualified by the board during a session held five days after the deadline. At that point, the number of qualified candidates is not more than the number of vacancies to be elected, but AB 502’s “deadline” has passed and thus acclamation is barred. Fun!
More Spam Than a Hawaiian 7-11
The Davis-Stirling Act currently requires HOAs to provide approximately five notices across the span of a typical board election. AB 502, however, will tack on five more, for an apparent - and nauseating - total of eight to ten board election notices:
Contrast that hand-holding with the three or four notices required to approve a massive special assessment, dramatically amend the core governing documents, or not rebuild after a fire, all of which are far more impactful in regards to each member’s financial interests and quality of life.
AB 502 is silent as to how this plethora of notices is to be juggled. Should boards simply provide every conceivable notice in the hopes their slate may qualify, or would it be better to hold off unless acclamation seems likely? The former makes sense on a per-election basis, but in aggregate will impose yet more costs.
Christmas in June
Prior to Senate Bill 323, a typical HOA board election would require 60 to 75 days to complete. SB 323 extended that timeline to at least 105 days, in practice closer to 120. This means that an HOA with a December annual meeting must currently start its call for candidates process in September.
AB 502’s 90 day notice will extend that 120-day period out another 60 days. This means that HOA elections will require 180 days - six months! - to complete. Even the most shameless retailer wouldn’t play Christmas carols in June, but that’s when our HOA with the December election will be forced to start its call process.
The Pool Noodles of Democracy
The ACLU asserts in opposition to acclamation that
[d]espite the significant parallels between local governments and HOAs, there is one important difference between local legislative bodies and HOA boards – unlike local legislative bodies, HOA boards have the power to set candidate qualifications and the eligibility determination process, and to do so without evidence or an opportunity to object by those who are excluded.
Look, I love the ACLU and I’ve done a ton of pro bono social justice work, but they’re dead wrong here:
The ever-bright and cheery Center for California Homeowner Association Law also objects, asserting that
California law grants homeowners who sit on association boards broad legal authority over the behavior and property of the other homeowners in the community and broad authority to write rules that govern it.
Not surprisingly, this too is dead wrong:
Finally, the California Alliance for Retired Americans rails against acclamation, arguing that
the key point is that HOAs are supposed to be SELF-GOVERNING communities where THE GOVERNED participate in its democratic processes; and a key decision they make is choosing their leaders through ELECTIONS. AB 502 would have the incumbent GOVERNORS choose the leaders – and not the voters who live there.
That may be true, but SELF-GOVERNANCE requires THE GOVERNED to step up and do their part. If THE GOVERNED are too apathetic or disinterested to run, the voters have NO CHOICE AT ALL. Also, why are we yelling?
It Shouldn’t Be This Hard
Section 5100(f) of the Davis-Stirling Act currently provides a single-sentence blanket exemption from secret ballot voting for small HOAs that appoint one director from each unit or lot. This exemption is absolute because directed appointments offer nothing for candidates to contest or members to choose.
Similarly, if the number of qualified candidates is not more than the number of open board seats, then those candidates will be the next directors - there is nothing for them to contest or the members to choose. Accordingly, acclamation should mirror Section 5100(f) as a simple single-sentence (g),
Director candidates shall not be required to be elected pursuant to this article and may be appointed by the board if, as of the completion of the qualification of nominees pursuant to Section 5105, the number of qualified candidates is not more than the number of vacancies to be elected, as determined by the board.
Endless notices and choiceless elections will do nothing to address the unfortunate reality that most HOA homeowners have neither the time nor inclination to serve on their board. If Sacramento is unwilling to tackle that root problem by easing and incentivizing board service, it should at the very least ease and incentivize the only tool to address its effects.
Whatever you want to call it, skipping a costly and difficult paper ballot election when the number of candidates is not more than the number of open board seats - and thus the result a foregone conclusion - makes sense. And yet - and yet! - Section 5100(a)(1) of the Davis-Stirling Act currently provides that
[n]otwithstanding any other law or provision of the governing documents, elections regarding [the] election … of directors … shall be held by secret ballot.
Welcome to Crazytown, population everyone except a handful of huge HOAs.
AB 502 = Less Acclamation
“Notwithstanding” this mandate, many HOAs have long relied on “other laws” to justify their use of acclamation. These include authorities that provide that the law favors substance over form, does not require idle acts, and that a ballot that offers no choice is not an election. Not surprisingly, these big kid interpretations are wildly popular and rarely challenged. “Stop, you’re saving me money!” sobbed no homeowner-plaintiff ever.
Assembly Bill 502, however, will expressly condition the use of acclamation on whether an HOA “has held a regular election for the directors in the last three years.” This “regular election” requirement will torpedo the “other laws” discussed above in favor of an express requirement that HOAs conduct full-blown elections at least once every three years if they wish to avail themselves of acclamation.
Consider an HOA with a staggered board and the usual staggering nominee apathy. Election after election, the incumbents are the only martyrs willing to step up, and so - election after election - the board skips balloting and seats the candidates via acclamation. AB 502’s regular election requirement will slash that HOA’s use of acclamation by compelling a full-blown vote every second or third cycle.
One would think a provision in a pro-acclamation bill that dramatically reduces its availability and compels costly, pointless elections would offer an array of amazing - or at least some - benefits. One would be wrong:
- Acclamation is a solution to a nominee problem, not a voting problem. Imposing yet more voting requirements will do nothing to address the fact that most HOA homeowners would elect a root canal over election to their board.
- The Senate Judiciary Committee suggests that regular elections will help ensure HOAs do not "fall into the habit of never holding a balloted election." But elections aren’t flossing or a trip to the gym, they’re required by law for qualifying slates “at the expiration of [each] director’s term and at least once every four years.” Civ. C. § 5100(a)(2).
- The Committee also suggests that "[t]he process of filling out and returning ballots helps to keep elections and democratic processes fresh in the minds of members." As discussed below, however, AB 502 will require at least four separate pre-voting notices. A subsequent ballot that offers no choice seems more likely to help keep resentment over spam and spiraling election costs “fresh” in the minds of members. If anything needs “refreshing,” it’s each member’s “democratic” obligation to volunteer for their private mutual benefit corporation.
- One major goal of Senate Bill 323 was to block the ability of boards to illegally disqualify nominees. Leaving aside the fact that a surplus of volunteers is a problem most HOAs would be happy to have, one purpose of AB 502's regular election requirement may be to offer members a means of challenging such disqualifications via candidate floor nominations and write-ins. Ironically, SB 323 itself bars both remedies via its requirement that HOAs prepare a candidate registration list - the final slate - at least 30 days before voting commences. Civ. C. § 5105(a)(7).
- AB 502 will provide that “when ... the number of qualified candidates is not more than the number of vacancies to be elected, as determined by the inspector,” HOAs may use acclamation if certain conditions are met. Emphasis added. If the final determination as to whether a slate qualifies for acclamation is made by inspectors and not boards, how will forcing a full-blown vote serve to deter illegal board disqualifications?
- Many HOAs operate using governing documents that impose a quorum requirement on board elections. According to CACM, up to 80% of director elections fail to satisfy quorum on the first round of voting, and this problem is no doubt exacerbated by a ballot that offers no choice. These HOAs will be forced to conduct subsequent rounds of costly and pointless balloting to satisfy AB 502’s regular election requirement.
Ironically, the Legislature never seems to consider whether piling ever-more cost and complexity on HOA elections will have the perverse effect of encouraging illegal disqualifications. “Sharon, if you run we’ll have more candidates than seats and thus spend thousands on a vote - step down.”
E = mc What?
As discussed above, AB 502 will only permit acclamation if an HOA has held a regular election for the directors in the last three years. According to the bill, this three-year period “shall be calculated from the date ballots were due in the last full election to the start of voting for the proposed election.” But this puzzling metric opens a buffet of canned worms:
- Some boards have shifted to non-staggered four-year terms in order to reduce the frequency of costly director elections. Since the date their ballots were due in the last full election to the start of voting for the proposed election is always more than three years, they will be barred outright from using acclamation. This is like goldy and bronzy, only it’s made out of iron.
- One can readily imagine a frustrating pattern of elections in which a slate which does qualify for acclamation is subject to an unnecessary election in order to comply with AB 502’s three-year metric, only for the next election’s slate to not qualify and thus require yet another full-blown vote, and so on. This likely pattern could force an unlucky HOA to miss multiple opportunities to use acclamation, thus dramatically increasing its election costs.
- Boards with staggered terms could be forced to appoint Group A by acclamation and Group B by balloted voting in perpetuity. At the very least, this would suggest different classes of directors and preferential treatment of Group A.
A Self-Missing Deadline
AB 502 will provide that the threshold for acclamation is “when, as of the deadline for submitting nominations provided for in subdivision (a) of Section 5115, the number of qualified candidates is not more than the number of vacancies to be elected.”
But “the deadline for submitting nominations provided for in subdivision (a) of Section 5115” is just that, the deadline for submitting nominations. Given the reality of last-minute submissions, whether or not a nominee is qualified typically cannot be determined until after that deadline.
In addition, Section 5015(e) of the Davis-Stirling Act currently 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.” In order to “provide this opportunity,”many HOAs make a blanket offer of IDR via their call for candidates form. Again, given the reality of last-minute submissions, the actual session itself must necessarily be conducted after the deadline for submitting nominations.
Consider an election with three open seats. At the deadline for submitting nominations, four nominees have applied. By AB 502’s metric, the number of qualified candidates - or, more accurately, nominees - is more than the number of vacancies to be elected, and thus a full-blown election is required.
One nominee, however, has accepted the HOA’s offer of IDR and is validly disqualified by the board during a session held five days after the deadline. At that point, the number of qualified candidates is not more than the number of vacancies to be elected, but AB 502’s “deadline” has passed and thus acclamation is barred. Fun!
More Spam Than a Hawaiian 7-11
The Davis-Stirling Act currently requires HOAs to provide approximately five notices across the span of a typical board election. AB 502, however, will tack on five more, for an apparent - and nauseating - total of eight to ten board election notices:
- a new individual notice at least 90 days before the deadline for nominations;
- Senate Bill 323’s call for candidates form at least 30 days before the deadline;
- a new "reminder" notice by individual notice between 7 and 30 days before the deadline, which - ironically - conflicts with the above-noted post-deadline IDR requirement;
- a new “confirmation of receipt” notice within 7 to 10 business days to each nominee who submits a call for candidates form;
- a possible second new notice within the same time-frame to the same nominee as to whether they are a qualified candidate, which also conflicts with the above-noted post-deadline IDR requirement;
- a new notice of a board meeting at which the board must vote to acclaim based on an agenda that reflects each qualified candidate’s name; and, if the slate does not qualify for acclamation;
- SB 323’s pre-ballot notice at least 60 days before the election;
- the actual voting packet at least 30 days before the election; and
- notice of the acclamation or results regardless.
Contrast that hand-holding with the three or four notices required to approve a massive special assessment, dramatically amend the core governing documents, or not rebuild after a fire, all of which are far more impactful in regards to each member’s financial interests and quality of life.
AB 502 is silent as to how this plethora of notices is to be juggled. Should boards simply provide every conceivable notice in the hopes their slate may qualify, or would it be better to hold off unless acclamation seems likely? The former makes sense on a per-election basis, but in aggregate will impose yet more costs.
Christmas in June
Prior to Senate Bill 323, a typical HOA board election would require 60 to 75 days to complete. SB 323 extended that timeline to at least 105 days, in practice closer to 120. This means that an HOA with a December annual meeting must currently start its call for candidates process in September.
AB 502’s 90 day notice will extend that 120-day period out another 60 days. This means that HOA elections will require 180 days - six months! - to complete. Even the most shameless retailer wouldn’t play Christmas carols in June, but that’s when our HOA with the December election will be forced to start its call process.
The Pool Noodles of Democracy
The ACLU asserts in opposition to acclamation that
[d]espite the significant parallels between local governments and HOAs, there is one important difference between local legislative bodies and HOA boards – unlike local legislative bodies, HOA boards have the power to set candidate qualifications and the eligibility determination process, and to do so without evidence or an opportunity to object by those who are excluded.
Look, I love the ACLU and I’ve done a ton of pro bono social justice work, but they’re dead wrong here:
- HOAs have little “power” to set candidate qualifications. 2020’s Senate Bill 323 requires boards to disqualify non-member nominees and expressly limits HOAs to four specific, discretionary, and largely toothless qualifications.
- HOA members have direct democratic control over whether their HOA adopts SB 323’s four discretionary qualifications, either by voting against the adoption of updated bylaws or by challenging new election rules under Civil Code section 4365.
- As discussed above, HOAs must offer IDR - an opportunity to both offer evidence and object - before disqualifying any nominee. In addition, AB 502 will provide that inspectors, not boards, make the final determination as to whether nominees are qualified.
- HOAs “significantly parallel” local governments in the same way pool noodles “significantly parallel” cruise ships - both float and are fun, but the comparisons stop there. It is ridiculous to hold non-profits staffed by soccer moms, retirees, and other amateur volunteers without access to governmental budgets or expert election staff to governmental election standards, especially given that the stakes are in no way comparable.
- Worst of all, local governments themselves are not required to issue endless notices or conduct pointless elections in order to perform uncontested appointments. Under Elections Code section 10229(a), “[i]f … the number of persons who have been nominated … does not exceed the number to be filled at that election … the city elections official … may … appoint to the office the person who has been nominated.”
The ever-bright and cheery Center for California Homeowner Association Law also objects, asserting that
California law grants homeowners who sit on association boards broad legal authority over the behavior and property of the other homeowners in the community and broad authority to write rules that govern it.
Not surprisingly, this too is dead wrong:
- California law imposes on directors - not homeowners - fiduciary responsibilities to discharge controlling law and the provisions contained in their CC&Rs, articles, bylaws, and other governing documents. Those responsibilities must be exercised in the memberships' interests. While boards - not individual directors - may adopt operating rules subject to member review, such rules cannot conflict with their CC&Rs, articles, or bylaws, which can only be amended with member approval.
- AB 502’s endless notice and pointless election requirements were apparently amended in to satisfy CCHAL. These requirements will yet again increase the cost and complexity of HOA elections. One wonders how an organization that apparently consists of a single motivated individual so consistently runs game on an industry that collectively controls trillions in real property.
- CCHAL’s concerns apparently largely turn on a belief that boards are “power hungry,” but the nature of this hunger is never analyzed. It can’t be pay, since board service is volunteer. It also can’t be personal interest, since the law requires self-interested directors to recuse. Community control? No, not that either - the Davis-Stirling Act and the CC&Rs, articles, and bylaws impose most restrictions, and the law and those documents must be followed, with the latter only subject to change pursuant to member approval. I’ve lost my appetite, which may explain why so few homeowners are hungry to run.
Finally, the California Alliance for Retired Americans rails against acclamation, arguing that
the key point is that HOAs are supposed to be SELF-GOVERNING communities where THE GOVERNED participate in its democratic processes; and a key decision they make is choosing their leaders through ELECTIONS. AB 502 would have the incumbent GOVERNORS choose the leaders – and not the voters who live there.
That may be true, but SELF-GOVERNANCE requires THE GOVERNED to step up and do their part. If THE GOVERNED are too apathetic or disinterested to run, the voters have NO CHOICE AT ALL. Also, why are we yelling?
It Shouldn’t Be This Hard
Section 5100(f) of the Davis-Stirling Act currently provides a single-sentence blanket exemption from secret ballot voting for small HOAs that appoint one director from each unit or lot. This exemption is absolute because directed appointments offer nothing for candidates to contest or members to choose.
Similarly, if the number of qualified candidates is not more than the number of open board seats, then those candidates will be the next directors - there is nothing for them to contest or the members to choose. Accordingly, acclamation should mirror Section 5100(f) as a simple single-sentence (g),
Director candidates shall not be required to be elected pursuant to this article and may be appointed by the board if, as of the completion of the qualification of nominees pursuant to Section 5105, the number of qualified candidates is not more than the number of vacancies to be elected, as determined by the board.
Endless notices and choiceless elections will do nothing to address the unfortunate reality that most HOA homeowners have neither the time nor inclination to serve on their board. If Sacramento is unwilling to tackle that root problem by easing and incentivizing board service, it should at the very least ease and incentivize the only tool to address its effects.