Category: Legislation

Throughout the nation, our democratic system of government faces increasing scrutiny each year. This scrutiny is justified as challenges to election processes multiply. Whether it’s stockholder votes, HOA elections, or state and local elections, none are spared from the scrutiny they rightfully deserve.

An HOA directorship, once held in high regard, now suffers from a tarnished reputation that continues to deteriorate. In some areas, those serving as Directors or trustees struggle to grasp the simplest concepts, like “fiduciary responsibility.” If you’ve watched HBO’s Last Week Tonight recently, you’ll know exactly how dire the situation is. [For a deeper dive, check out my post: https://www.hoadvocate.com/homeowners-associations-last-week-tonight-with-john-oliver/]

In California, the bar to serve as an HOA Director is laughably low, with no requirement for education or training. Removing a Director is akin to pulling teeth, requiring a recall or a court order under Corporations Code § 7223. For those brave enough, my recently resolved 7223 Petition (Kruschen v. Annandale Townhouse Association, Inc., and Steven Gittleman) awaits your perusal: https://www.hoadvocate.com/wp-content/uploads/2023/03/2023-03-07-FA-23VECP00088.pdf

HOA elections in California are tightly regulated, thanks to Senator Bob Wieckowski, who waged war on corruption with SB-323 in 2019. [For the gory details, see: https://www.hoadvocate.com/new-election-rules-why/] Wieckowski’s crusade didn’t stop there; SB-432 in 2021 was another blow to those who seek to manipulate the system. [More on that here: https://www.hoadvocate.com/sb-432-wieckowski-does-it-again/]

According to an April 2, 2019, Senate Judiciary Committee report, “The California Appellate courts have ruled repeatedly that associations parallel in almost every way the powers, duties, and responsibilities of local government. The original legislation to create integrity in association elections built on these opinions by stating that ‘it is the intent of the Legislature to ensure that democratic principles and practices are in place with respect to the governance of common interest developments.’ Nowhere in association governance are democratic principles more vital than during elections […] Unfortunately, since their enactment, the California laws governing association elections have been ignored or violated or undermined […]. SB323 aims to address these abuses.”

A July 9, 2019, Assembly Committee on Judiciary report notes, “…SB323 makes it harder for associations to manipulate HOA elections and goes a long way toward restoring confidence in this essential democratic process.”

It’s crystal clear that safeguarding the integrity of HOA director elections isn’t just a state concern; it’s a rallying cry for conscientious HOA members everywhere. Obtaining a directorship through a flawed election undermines its legitimacy.

Despite my relentless warnings to the HOA beginning in September 2022, the election inspector, Michelle Kelly of Correct Elect, LLC, remained defiant. Michelle was made aware of the issues but turned a blind eye, refusing to rectify her errors or invalidate her sham election and start anew. An act of cowardice that would’ve spared the HOA further strife.

As a consequence, I took decisive action and filed a shareholder lawsuit under Corporations Code § 7616 and Civil Code § 5145. Los Angeles County Superior Court Case No. 23VECV05191, filed on November 20, 2023, exposed a litany of violations of state law and the HOA’s governing documents.

Among the litany of spectacular failures, the HOA neglected to mail election materials to all members, disregarded correct mailing addresses, failed to confirm nominations, bungled the distribution of a compliant candidate list, misidentified the 3-year terms of office, neglected to properly provide meeting notice to members, flouted in-person ballot counting meeting requirements, accepted non-compliant proxies, accepted proxies in lieu of ballots, and allowed 50 ballots to materialize after the predefined cutoff.

Did Annandale, Martinez, Wagner, Grossman, Perl, and Atkinson do the right thing and acknowledge their legal quagmire, ordering a new election? Absolutely not. They were hell-bent on squandering our HOA’s cash, with conservative estimates tallying over $100,000, to defend the indefensible notion that the failures had no impact on the election results. But math doesn’t lie. Add or subtract a ballot, and the results change. Deny members the right to vote, and the outcome is tainted.

For five interminable months, Annandale, Victor Martinez, Scott Perl, James Grossman, Jeff Atkinson, and Anthony Wagner flailed about incoherently with their lawyers, Leonard Siegel and Gerard Kilroy of Kulik Gottesman Siegel & Ware LLP. They thought deflection, character assassination, and scapegoating would save them. But I keep meticulous records. I’m a relentless communicator. As witness William Springer attested, I “don’t hold back.” The evidence  presented was overwhelming and voluminous, and Judge Harmon affirmed in his order, “…the court finds that the defendant has not established that any noncompliance did not affect the results of the election.”

SUCCESS!

Per the judgment entered today, March 26, 2024:

•Annandale’s October 2023 director election is invalid and void.

•Defendants VICTOR RENE MARTINEZ, ANTHONY WAGNER, JAMES GROSSMAN, SCOTT PERL, and JEFFERY ATKINSON do not comprise the Board of Directors, and are not authorized to act on behalf of the Association, engage in Association business, or conduct Association affairs.

•A new director election shall be held in compliance with the relevant laws of the State of California and the Association’s CC&Rs, Bylaws, and Election and Voting Rules.

•Plaintiff is the prevailing party in this action.

I extend heartfelt gratitude to William Springer, and Doreen Murray of Sunrise Property Management Group, for their truthful testimony during the three-day bench trial in February. I owe a debt of gratitude to James E. Perero, partner at Myers, Widders, Gibson, Jones & Feingold in Ventura, and his associate Monique Fierro, for their astute prosecution of the case, demonstrating wisdom, intelligence, pragmatism, and a mastery of the subject matter.

Many people have questions about “quorum” and how it affects an HOA’s operations. Quorum is defined by Oxford as “the minimum number of members of an assembly or society that must be present at any of its meetings to make the proceedings of that meeting valid.” In an HOA, the majority or supermajority rules, meaning that if the majority or supermajority of members do not support something, it cannot happen. This principle is what quorum refers to.

In the mid-2000s, owner-member participation in HOAs was high, but as more properties entered the rental market and the recession took hold, participation began to decline. Failed elections due to apathy are now common. Although low participation is often viewed as a vote in favor of the status quo, the state has opened up the courts to reduce quorum and make final determinations. However, this can be expensive and time-consuming. Additionally, Association Board members may be hesitant to take action due to their egos.

Fortunately, after years of lobbying, Assemblyman Tri Ta of Orange County has introduced AB-1458, which rewards those who participate and eliminates the need for supermajority and majority requirements. Quorum would be determined by the majority of those who participated, not of all members. If 20 people vote and 11 are in support, that is quorum. If you do not like the outcome, you have only yourself to blame for not voting.

As the process of making AB-1458 into law is a long road, you can follow its progress here: https://leginfo.legislature.ca.gov/faces/billHistoryClient.xhtml?bill_id=202320240AB1458.

If this bill is signed into law it will negate the need for Corporations Code section 7515 petitions in relation to Director elections further saving owners and HOAs money.

We thank Assemblyman Ta for introducing this bill.

** UPDATE: Amended in the Assembly to increase from members present to at least 20% participation to meet quorum absent a lower percentage authorized by the Association’s bylaws.

Last week Governor Newsom signed AB-1738, a bill that will greatly benefit residents of multifamily buildings who currently own or will own electric vehicles. The California Building Standards Law previously established the California Building Standards Commission under the Department of General Services. This commission is responsible for approving and adopting building standards and incorporating them into the California Building Standards Code.

Before the bill was signed, the Department of Housing and Community Development was required to propose mandatory building standards for the installation of electric vehicle charging infrastructure in multifamily dwellings to the commission for consideration. The commission was then required to adopt, approve, codify, and publish these standards for both multifamily and nonresidential development.

Now, under AB-1738, the commission and Department of Housing and Community Development are required to research and develop mandatory building standards for the installation of electric vehicle charging stations with low power level 2 or higher electric vehicle chargers in existing multifamily dwellings during specific retrofits, additions, and alterations to existing parking facilities. These standards will be proposed for adoption in the next triennial edition of the California Building Standards Code.

Furthermore, this law mandates that the Department of Housing and Community Development and the commission must review and update these building standards every triennial code cycle until specified goals are met.

“Conservative towns in California still exist and my DIL (daughter in law) lives in one. She’s suffering terribly after a [sexual assault] resulted in pregnancy last year and after counseling and lots of prayer, she terminated it. It made the news and pro lifers are none too pleased with my son and DIL. They are distributing flyers in the neighborhood and posting on the HOA FaceBook about it and where she lives.

They don’t want to sell their house. The HOA won’t do anything about it. What can my son do to help her deal with the HOA?”

 

The Safe at Home program is a confidential address program administered by the California Secretary of State’s office and is most effective when used as a part of an overall safety plan. Safe at Home offers victims of domestic violence, stalking, sexual assault, human trafficking & elder and dependent abuse, as well as reproductive health care workers, a substitute mailing address to receive first class, certified, and registered mail. This address is also accepted by California state, county, and city government agencies in lieu of a residential or other mailing address where a victim can be tracked down, keeping the residence address confidential and out of the hands of someone who might want to harm the victim.

The Safe at Home program application is not available online. She must make an appointment with a certified enrolling agency to complete the application in person. For more information, she will want to contact the Safe at Home program at (877) 322-5227.

Beginning last January, Civil Code section 5216 requires HOAs to take their own steps upon request of a member who is an active participant in the Safe at Home program. Once she has become an active participant in the Safe at Home program, the HOA must accept and use the address designated by the Secretary of State as the Safe at Home participant’s substitute address under the Safe at Home program for all HOA communications, and withhold or redact information that would reveal the name, community property address, or email address of the Safe at Home participant from all resident community membership lists, including mailbox bank listings, resident directories, electronic keypads, unit property numbers, and internet web portal accounts and any membership list that will be shared with other members of the association. The HOA must also keep member participation in the Safe at Home program confidential.

Being a crime victim is not a “protected class” but she might also have a good claim for protected class harassment on the basis of gender and pregnancy.

My advice is to get her enrolled immediately, put the HOA on notice immediately thereafter, and then schedule an IDR with the HOA outlining her expectation that the HOA will keep her information confidential and will take disciplinary action against members who are participating in protected class harassment online.

Here’s information from the federal U.S. Department of Housing and Urban Development (HUD): https://www.hud.gov/program_offices/fair_housing_equal_opp/fair_housing_act_overview

The California Civil Rights Department (CRD) has state information here: https://calcivilrights.ca.gov/LegalRecords/

CRD is the new name for the Department of Fair Employment and Housing (DFEH). It changed last month.

 

** 9/30/22 Update: SB-1131 expands the address confidentiality program to include other individuals who face violence, harassment, or threats of violence from the public because of their work for a public entity and was signed into law on September 26, 2022.

“As two disabled people, my wife and I rely heavily on electronic means to obtain information, whether it be from the web or through email. It’s 2021 and with the pandemic hopefully nearing its end, we would expect our HOA to provide information electronically. However, our HOA refuses to do so, as they don’t have a website and the on-site manager still uses an outdated @aol.com email address that treats emails as spam. This is not only frustrating, but it also seems like a waste of resources. The Board is made up of seniors who don’t use computers at all and seem disinterested in changing their ways. We believe it would be cheaper for the HOA to stop mailing out paper documents to those who don’t want them, and instead provide the option for electronic communication. Any tips for getting them to change their ways?”

 

SB-392 was introduced in the California State Senate in 2021. The bill aimed to amend several sections of the Civil Code relating to common interest developments, specifically addressing the electronic delivery of documents and member notices.

The bill proposed to require that common interest developments provide members with the option to receive documents and notices electronically, including any disclosures, statements, or reports required by law or governing documents. Members would also be able to provide their consent to receive electronic documents and notices, and could revoke their consent at any time.

Additionally, the bill proposed that common interest developments adopt a policy for the electronic delivery of documents and notices, which would include procedures for verifying the validity of electronic signatures and ensuring the confidentiality and security of electronic documents.

SB-392 was signed into law on October 7th! Beginning January 1, 2023, it will be much easier for members of common interest developments, including those who are disabled and rely on electronic communication, to receive important information and participate in the HOA decision-making processes.

I understand that waiting over a year can be hard. Perhaps if you provide this information to your Board and manager and ask if they will voluntarily agree to adhere to the law early, you might get what you’re looking for. Until then, they aren’t breaking the law as none existed…until now.

Some members may want to continue receiving or start receiving paper notices. That right remains. Here’s a refresher.