Effective January 1, 2020, Senate Bill 323 dramatically changed association election law, including the laws controlling election challenges, candidate and director qualifications, election rules, election timelines, pre-election notices, inspectors, association recordkeeping, and more.
Sponsored by an anti-HOA lobbying organization, SB 323’s purported goal was to increase the “regularity, fairness, formality, and transparency” of HOA elections. Unfortunately, SB 323 in practice imposed a costly, complex, and harmful set of new election requirements for little gain.
Sponsored by an anti-HOA lobbying organization, SB 323’s purported goal was to increase the “regularity, fairness, formality, and transparency” of HOA elections. Unfortunately, SB 323 in practice imposed a costly, complex, and harmful set of new election requirements for little gain.
Regardless of its flaws, however, SB 323 is now law. As such, all residential and mixed-use California HOAs must comply with the bill when conducting board elections and other secret ballot votes. The following provides an overview of SB 323’s primary changes:
Again, this is only a partial list of SB 323's changes to the law. You can read the bill in full here. My complete update service is designed to help HOAs conduct elections with confidence in the face of this complex new law.
Please contact me today to request an update proposal.
- More frivolous lawsuits. Prior to SB 323, if a member sued to challenge election results, courts had discretion as to whether to let the vote stand. This typically meant that courts would disregard election law violations unless the challenger could show real harm. SB 323 now requires courts to void non-compliant elections unless the association can show that its non-compliance "did not affect the results." This change increases the risk of frivolous election challenges and potential liability.
- Bad actors can vote. SB 323 bars associations from suspending member voting rights. Now, all members must be allowed to vote, even those who are delinquent or in violation of the governing documents. This change means that community decisions can now be made by those who are not acting in the community’s best interests.
- Bad actors can serve on the board. In a related vein, SB 323 seriously limits what qualifications may be imposed on director candidates and directors. Now, certain delinquencies are permissible, as are many criminal convictions and governing document violations. This change limits the ability of associations to keep convicted felons, delinquents, and other bad actors off the board, and to control their conduct once elected.
- Endless elections. Prior to SB 323, a typical 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. In addition to the increased expense and effort, this change means that boards will be forced to spend a significant part of each year conducting elections.
- Pointless elections. Election by acclamation is the practice of dispensing with a board election when the slate of candidates is less than or equal to the number of open board seats, and thus the results a foregone conclusion. Many have concluded that SB 323 now bars this effective and efficient practice for communities with fewer than 6,000 homes. This change means that associations may be forced to conduct costly, complex, and time-consuming elections when the results are already known.
- Worse elections. Prior to SB 323, many associations would appoint their manager as inspector of election. This made sense, as most managers are experienced, accredited HOA professionals who are familiar with the community. SB 323 now bars associations from appointing anyone who is currently under contract to the association as inspector, including professional managers. This change will increase the cost of elections and lead to worse outcomes, as election decisions will either be made by amateur members or third parties who are unfamiliar with the community.
- More boxes of records and more spam. SB 323 requires associations to create an entirely new class of association records called “association election materials” and adds member emails as association records subject to inspection. This change will lead to increased administrative expense and effort, as well as unwelcome email spam and flame wars.
- New bylaws and election rules. SB 323 sets forth a laundry-list of new provisions which must be contained in an association’s election rules. Associations which do not have stand-alone, SB 323 compliant election rules can have their election results voided even if their election was otherwise flawless.
In addition, the bylaws of most communities contain provisions which have been voided by SB 323 or are otherwise legally obsolete. Given the scope of SB 323’s changes, an amendment would necessarily be complex and thus an invitation to confusion, conflict, and potential liability. Accordingly, most associations will be forced to replace their bylaws in full.
Again, this is only a partial list of SB 323's changes to the law. You can read the bill in full here. My complete update service is designed to help HOAs conduct elections with confidence in the face of this complex new law.
Please contact me today to request an update proposal.