The 2021-2022 legislative session is underway and by mid-January the Legislature does not have any HOA bills pending. The past two years were eventful due to 2019’s Senate Bill 323’s substantial changes to the election processes, and 2020’s Assembly Bill 3182’s new protections of rentals within HOAs. In case a Legislator or their staff is reading, (or you want to suggest some improvements) here are ideas to HELP California HOAs.
First, resolve the questions remaining about HOA elections. The new law lists only 5 possible board candidacy disqualifications, so, for example, term limits are apparently barred. Second, the statute references only board candidacy, so can boards fill vacant seats by appointing a person who would be ineligible as a candidate for election to that seat? Third, new Civil Code Section 5100(g) allows board elections by acclamation if the number of eligible candidates after close of nominations equals the number of open positions. However, this opportunity only applies to HOAs with 6,000 or more members – perhaps ten HOAs statewide. This help should be available to all California’s 50,000 HOAs, so they can forego the expense and effort of sending out ballots if there are not enough candidates for a competitive election.
Small HOAs struggle with the election requirements and deadlines. It is ludicrous to require 10-unit HOAs to have Inspectors of Election, secret ballots, and a 90-day election process. A simpler process should be allowed for HOAs under a certain size.
Some law changes could help HOAs keep up with an increasingly digital society.
For example, allow HOAs to choose electronic membership voting. HOAs are still the only type of corporate entity specifically not allowed to vote electronically. Many nonprofits such as unions, trade associations and other corporations already vote electronically, but Civil Code 5115(c) requires that paper ballots and envelopes be sent to all members. HOAs are still in the 1980’s in this regard, until the law finally catches up.
Another helpful advancement would be to change Civil Code 4055 so that HOAs can send notices to members electronically, unless members opt out and choose paper notices, so that electronic is the default notification method. Members currently must opt-in for electronic, and most are unaware.
Small HOAs are typically managed by volunteer homeowners without attorneys or professional managers. Those associations are choking on the ever-increasing complexities of the Davis-Stirling Act and desperately need help. The Commercial and Industrial CID Act (Civil Code 6100-6876) is a lighter version of the Davis-Stirling Act. Why not have a “smaller CID” act applicable to HOAs of 25 homes or smaller?
Many HOAs struggle to attain quorum for board elections, and their governing documents do not provide for reduced quorum meetings. A new subpart “h” could be added to Civil Code 5115 so that the members, after failing to meet quorum, could proceed on a reduced quorum of 25%, to enable more elections.
New Fair Housing Regulation 2 CCR §12176(b) requires that HOAs keep confidential anything about a disabled person’s request for accommodation. Therefore, such board discussions must be in closed session. Since Civil Code 4935, (listing the permissible closed session topics) does not include this subject it should be added to the list so boards can comply with Fair Housing confidentiality requirements.
Sacramento: If you are listening, we need your help.
Kelly G. Richardson Esq., CCAL, is a Fellow of the College of Community Association Lawyers and a Partner of Richardson | Ober | DeNichilo LLP, a California law firm known for community association advice. Submit questions to Kelly@rodllp.com. Past columns at www.HOAHomefront.com. All rights reserved®.