Proxies, Member Petitions

Mr. Richardson, I have been under the impression that a change to the governing laws in California no longer allowed proxies for elections. As such, we almost never get a quorum on the first try and therefore have to waste the homeowner’s money having a second annual meeting to meet the reduced quorum numbers. Yet, your [earlier] article sounds like proxies are allowed for quorum purposes. Can you clarify this for me?? Thanks,  F.V., San Clemente Dear F.V., There is a recurring myth that proxies were “outlawed” by the 2005 amendments to the HOA election law (Civil Code 1363.03). The confusion arises from the first sentence of 1363.03(d)(2): ” Proxies shall not be construed or used in lieu of a ballot.” This means that a proxy cannot be used as a ballot. The next sentence clearly contemplates that an association may allow proxies: “An association may use proxies if permitted or required by the bylaws of the association..” Since the law requires each owner receive a ballot which can be cast in advance, there is no reason to use proxies in order to have one’s vote count. If they are unable to attend the meeting, members can still cast a vote, since they receive ballots well in advance. I routinely suggest associations delete proxies from their bylaws, except for proxies for the sole purpose of attaining quorum. So, proxies aren’t illegal- just unnecessary. By the way, from time to time I hear a director say they are giving another director their proxy to vote in a board meeting. The Corporations Code refers to proxies regarding member votes only. Thanks...
Get Ready for the “New” Davis-Stirling Act

Get Ready for the “New” Davis-Stirling Act

On January 1, 2014, the Davis-Stirling Act moves to a more spacious new home, thanks to a major reorganization effort by the California Law Revision Commission. For the past 30 years, the Act was squeezed into Civil Code Sections 1350-1379, and as the Act grew in complexity, the individual sections became more lengthy. Next year, the Davis-Stirling Act will be found at Civil Code 4000-6150, leaving much more space and therefore allowing the Act to be much more readable. Even though this takes effect next year, homeowners, boards, managers and attorneys should not wait until December 2013 to learn about it, because there are some important substantive changes coming. Until the Davis-Stirling Act takes effect on January 1, 2014, the new law can be reviewed as 2011’s AB 805, at www.leginfo.ca.gov under “bill information”. Although the Commission’s primary purpose was to reorganize and clarify the law without changing its content, the new law does make some substantive changes. Most of the changes are technical and not controversial. However, here are 9 new sections which in 2014 could affect how your association operates. 4235 Boards can amend CC&Rs without membership vote, to change (any mentions of the outdated Act Section numbers) to the new statute numbers. 4600 A board may grant exclusive use common area rights to a member to: Accommodate a disability, Assign parking or storage, or otherwise comply with the law, without the requirement of a 2/3 membership vote. 4775(b) The association is not required to pay for a homeowner’s temporary housing if a homeowner is dislocated due to common area repair or maintenance. [This eliminates an ambiguity...

Too Close to Employee, Long Term President

Mr. Richardson, I was wondering if you would answer a question for me. We have a Board member who is literally sleeping with the association’s property supervisor, who is an association employee. We had an executive session meeting to discuss personnel issues prior to the regular board meeting. I suggested to her to recuse herself from the meeting to allow the board to talk freely about all personnel issues because the property supervisor might be discussed. The Board president insisted she had the right to stay but would not vote. I believe this limits our discussion. Thank you, P.I., San Clemente P.I., A romantic relationship between a director and a vendor or employee is a very bad idea. Period. If that relationship is important to the director, that person should step down from the board. By insisting that the employee stay during the personnel discussion, the president was violating important ethical and legal duties to the association. The circumstance you describe is one where the president put the romantic relationship above the duties to the HOA. The board should ask the president to resign from the board. If the request is not granted, the board should elect a new president, and not permit that director to attend any further closed session discussions regarding that employee. Kelly Hello Kelly, I am in an association of 10 units. An owner and his wife have been on the Board the entire duration of the Association. For the first 15 years he was president, a spent couple of years as a board member, and the last 2 years as treasurer. He recently resigned...

Can We Force the Board?, Campaign Flyer

Dear Sir, Appreciate your column in the newspaper on HOAs. Is there a way to force a Board to allow the membership to vote on an issue without calling for a recall? Thanks in advance, J.P, Menifee Dear J.P., If there is sufficient interest in an issue that the board is not addressing, the first method might be simply to have group of persons speak in Open Forum (not necessarily for very long) to urge the Board to deal with the issue. Unless the issue is a true emergency, the Open Meeting Act does not allow a decision on a non-agenda item to be decided at that time, but the board hopefully would set it for a future agenda. If that does not get the board’s attention, your bylaws probably say that 5% of the members can petition for a membership meeting. This is also provided for (if the bylaws do not mention it) in Corporations Code 7510(e). These petitions can too often waste the HOA’s time, since often the petitioners are able to accumulate the 5% for the petition but not much beyond that, so the meeting fails for lack of quorum. If you are considering such a petition, make sure that the community really is interested in the issue. Boards are charged by law to direct the association’s “the activities and affairs” (Corporations Code Section 7210), so if the matter is really a board decision, a petition could prove to be a frustrating exercise, depending on the issue. Is this something the members vote on (amendments, assessments, etc)? I really don’t like recalls, but that can also...
Too Helpful Manager, A Dangerous Director

Too Helpful Manager, A Dangerous Director

Dear Mr. Richardson, I am a director of a large HOA. In our most recent board meeting the following came up in discussion: Our manager is calling homeowners and asking they vote for the incumbents. Is this ethical? Doesn’t the manager represent us all and not just a few? This does seem biased. Some of our board members have access to homeowner phone numbers and are calling residents asking them to vote for incumbents. When the other candidates asked for the same privilege at a recent board meeting, our manager informed them they were not privy to the phone numbers because they were not board members. Is this fair? KF, Santa Ana Dear KF, Managers should have no role in campaigning or helping any candidate. A manager (and the HOA attorney also) must remain completely neutral. HOA professionals usually have opinions on who would be a good director and who would not, but it is critical that we keep our opinions to ourselves. To do otherwise, and to campaign for a specific director (even if we think that person would be a fantastic director) is a breach of our ethical and fiduciary responsibilities. Board members have under the Corporations Code unlimited access to HOA records, but that is when they use the information for corporate purposes. If they are using the information for their own personal gain, that is an abuse of their position and a conflict of interest. All candidates should have the same access to the membership. Thanks for your question, and hope things clean up at your association soon. Kelly Dear Kelly, We currently have directors who...