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