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 common interest 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.
Unfortunately, SBs 323 and 754 clarified this split in favor of the fiery hole. Effective January 1, 2020, new Civil Code section 5100(g)(1) provides that acclamation is only permissible if an “association includes 6,000 or more units.” Leaving aside the fact that corporations cannot “include” units, the effect of this change is that acclamation’s benefits are now only available to common interest developments which feature 6,000 or more separate interests. All others must dig.
It is unclear as to why the Legislature conditioned the practical relief of acclamation on size, as the benefits scale proportionately. It is also unclear as to why the SB 754's sponsor - the members of a large retirement community - have the time and energy to legislate but not run for their own board. Regardless, the certain death of acclamation for all but the largest of California's CIDs adds insult to injury to the problem of member apathy.
The fun doesn't stop there, however. As discussed in several other blog posts, new Civil Code section 5100(g) injects several ambiguities of its own, including whether the Section's director qualifications apply to all elections or just those in large CIDs and whether natural person representatives of entity-owners may be elected by acclamation (apparently not).
In addition to those koans, Section 5100(g)(3)(B)(i)'s fidelity coverage qualification differs from the fidelity coverage qualification set forth in SB 323's new Civil Code section 5105(c)(4). The former permits past-crimes disqualifications if the crime would terminate fidelity coverage as to that person, while the latter permits past-crimes disqualifications if the coverage would be terminated per se. If, as noted above, Section 5100(g) applies to all elections, this represents a conflict if the threatened termination is only to the person. If it does not, it represents a size-based standard that, like acclamation, has no justifiable basis.
Please contact me today to request an update proposal.
Unfortunately, SBs 323 and 754 clarified this split in favor of the fiery hole. Effective January 1, 2020, new Civil Code section 5100(g)(1) provides that acclamation is only permissible if an “association includes 6,000 or more units.” Leaving aside the fact that corporations cannot “include” units, the effect of this change is that acclamation’s benefits are now only available to common interest developments which feature 6,000 or more separate interests. All others must dig.
It is unclear as to why the Legislature conditioned the practical relief of acclamation on size, as the benefits scale proportionately. It is also unclear as to why the SB 754's sponsor - the members of a large retirement community - have the time and energy to legislate but not run for their own board. Regardless, the certain death of acclamation for all but the largest of California's CIDs adds insult to injury to the problem of member apathy.
The fun doesn't stop there, however. As discussed in several other blog posts, new Civil Code section 5100(g) injects several ambiguities of its own, including whether the Section's director qualifications apply to all elections or just those in large CIDs and whether natural person representatives of entity-owners may be elected by acclamation (apparently not).
In addition to those koans, Section 5100(g)(3)(B)(i)'s fidelity coverage qualification differs from the fidelity coverage qualification set forth in SB 323's new Civil Code section 5105(c)(4). The former permits past-crimes disqualifications if the crime would terminate fidelity coverage as to that person, while the latter permits past-crimes disqualifications if the coverage would be terminated per se. If, as noted above, Section 5100(g) applies to all elections, this represents a conflict if the threatened termination is only to the person. If it does not, it represents a size-based standard that, like acclamation, has no justifiable basis.
Please contact me today to request an update proposal.