Governor Newsom has signed into law perhaps the most sweeping legislation targeting a community association’s ability to self-govern. Senate Bills 323 and 754 together present the greatest legislative change in association elections since the two-envelope secret written ballot procedures were first imposed upon community associations.
The changes that most impact community associations are as follows:
- Timing: The legislation amends Civil Code § 5100 (a) to require director elections be held at the end of each director’s expiring term and at least every four years.
- Vote by Acclamation: For large communities (of 6,000 or more separate interests) and where the number of nominees is equal to or less than the number of board seats to be filled, the legislation allows for an association to conduct a director election vote by acclamation.
- Mandated Candidate Qualifications: The legislation further amends Civil Code § § 5100 and 5105 (b) mandating that elections rules include the following specified candidate qualifications: 1) that the candidate be an association member; and, 2) that a corporate or trust property owner be represented by the appointment of a natural person.
- Limited Candidate Disqualification SB 323 adds Civil Code § Subsection 5105 (c) allowing an association, through election rules or bylaws only, to disqualify a candidate 1) with a prior criminal conviction that prevents the association from acquiring a fidelity bond or would result in the termination of the associations existing fidelity bond; 2) whose election would result in joint owners of a separate interest serving on the board at the same time; or, 3) who has been a member for less than one (1) year.
- New Limitations on Disqualification For Delinquency. This law allows an association to disqualify a candidate who is delinquent in assessment payments; however, Civil Code § 5100, as amended, does not allow the disqualification of a candidate for failure to pay fines. Further, an association is prohibited from disqualifying a delinquent candidate if 1) the candidate has paid the delinquent assessments under protest; 2) has entered an assessment payment plan; or, 3) has not been “provided the opportunity” to engage in IDR.
- Expanded Retention of and Member Access to Mandated Election Records: Civil Code § 5105 (a) as amended requires an association to retain as election materials both a candidate registration list and a voter list which must include specified voter information. Moreover, members now must be allowed to verify the accuracy of their information on both the voter list and candidate registration list at least 30 days before the ballots are mailed. Errors must be made by the Inspector of Elections within two business days.
Finally, this legislation amends the association records available to a member pursuant to Civil Code § 5200 to add “Association Election Materials” which includes 1) returned ballots, 2) signed voter envelopes , 3) voter list of names, parcel numbers, and voters to whom ballots were to be sent, 4) proxies and 5) candidate registration list. Thankfully, signed voter envelopes may be inspected but not copied. Signed voter envelopes, voter list, proxies and candidate registration lists are added to the items that must remain in the custody of the inspector or at a location designated by the inspector until the election challenge deadline has expired.
- Membership Lists Now Include Email Addresses; Opt Out: Perhaps the most significant change to Civil Code § 5200 is to the membership list definition which was amended to specifically include email addresses. Members requesting access to their association’s membership list is now entitled to email addresses. This change underscores the importance of the member opt- out option in Civil Code § 5220 that permits a member to opt out of the sharing of that member’s information.
- Prohibits Suspension of Voting Rights: SB 323 severely restricts an association’s ability suspend member voting rights. This legislation expressly prohibits an association from denying a ballot to a member for any reason other than not being a member, effectively ending a board’s ability to avail itself of the ability to suspend a members voting for any election included within Civil Code 5100 (a) (1).
- Changes Inspector Qualifications: The inspector qualifications of Civil Code Section 5110 were not ignored by SB 323. The definition of “independent third party” in Section 5110 (b) was amended to prohibit an association from adopting elections rules to allow the use of an association employee or person under contract with the association from serving as an inspector of elections.
- Mandates Pre-Election Notice Requirements: SB 323 amends Civil Code Section 5115 by adding mandatory member notification provisions that require:
- General notice of the procedure and deadline for submitting candidate nominations at least 30 days before the deadline.
- General notice of the following at least 30 days before the ballots are distributed:
- Date, time and address for ballots to be returned.
- Date, time and meeting location for ballot count.
- List of candidates whose names will appear on the ballot.
Elections rules also must be effectively delivered or provided to each member along with the ballots. Finally, Civil Code Section § 5105 (h) imposes an election rule amendment cut-off of 90 days prior to an election.
Adds Standards For Challenges to the Election Process: Whereas existing Civil Code Section 5145 allowed a court to void the outcome of an election found to have been conducted in violation of the Civil Code Section 5100 et seq. election procedures, SB 323 amends Section 5145 to mandate that a Court void an election if a member establishes by a preponderance of the evidence that the election procedures were not followed. Most importantly, however, the amended language provides an opportunity for an association to avoid this by establishing that noncompliance with the elections procedures did not affect the outcome of the election
Written by Robert M. DeNichilo
Robert M. DeNichilo is a partner in the firm Richardson|Ober|DeNichilo and concentrates his practice the representation of community ssociations throughout California. He is a fellow in the College of Community Association Lawyers, a prestigious designation given to less than 175 attorneys in the country. Mr. DeNichilo regularly speaks at educational and training events for industry organizations, property management companies, and board members throughout California. Robert is the founder of HOABrief.com where he frequently provides
expert insight on community association topics.