HOAdvocate

“The HOA just sent out a new set of separate election rules different from our other rules. No explanation, just a packet asking for comments within 30 days. My sister got something similar in the mail from her HOA in southern California. The manager and board won’t answer any questions they just refer back to the lawyer’s letter in the packet which doesn’t give me any useful information. Seems like another thing the lawyers want to charge for to make our dues go up so I thought I’d ask you.”

SB-323 was signed into law on October 12, 2019, and the over 50,000 HOAs in California have been scrambling to prepare for it to become effective on January 1st. This law requires that HOAs follow certain election procedures, including providing written election rules that govern the conduct of elections, providing for secret balloting, and allowing members to nominate themselves or other candidates.

The law also requires that HOAs provide notice to their members of any proposed changes to election rules at least 30 days prior to the membership meeting at which the changes will be considered. During this time, members must be given the opportunity to review and comment on the proposed changes.

Based on your description, it appears that your HOA is following the requirements of SB-323 by providing you with written election rules and an opportunity to review and comment on them. However, it’s understandable that you may have questions or concerns about the new rules, and it would be helpful if the HOA could provide more information or clarification. You may want to reach out to other members of the HOA or consider attending an upcoming board meeting to discuss your concerns as a group if you can’t get anywhere individually.

The HOA Warriors are especially excited about what SB-323 brings to HOA members across the state. Some of its key provisions include:

Acclimation: Under SB-323, if the number of nominees is not more than the number of vacancies to be elected as determined by the inspector of elections, nominees shall be considered elected by acclamation only if: (1) the association includes 6,000 or more units; (2) the HOA provided individual notice of the election and the procedure for nominating candidates at least 30 days before close of nominations; and (3) the association permits all “qualified” candidates to run if nominated.
Mandatory Disqualification: Under SB-323, an association is required to disqualify nominees who are not members of the association at the time of the nomination.
Permissive Disqualification: Under SB-323, an association may disqualify a nominee if they would be serving on the board at the same time as another person who holds a joint ownership interest in the same property as the nominee, and the other person is either properly nominated for the current election, or is an incumbent director. However, this does not apply if more than one lot/unit is owned.
Permissive Disqualification: Under SB-323, an association may disqualify a nominee if they have been a member of the association for less than one year as of the date of nomination.
Permissive Disqualification: Under SB-323, an association may disqualify a nominee if the HOA is or becomes aware that the nominee has a past criminal conviction which, if the nominee is elected, would either prevent the HOA from purchasing fidelity bond coverage or cause such coverage to terminate.
Inspectors: Under SB-323, management companies may no longer be the inspector of elections for HOAs. They must now be an “independent third party” not under contract for any other services to the association.
Inspectors: Under SB-323, in addition to sealed ballots, inspectors of elections must now also retain signed voter envelopes, voter lists, proxies, and candidate registration lists. These items are to remain in the custody of the inspector or inspectors of elections until the time allowed by Civil Code section 5145 for challenging the election has expired.
Access to records: Under SB-323, “association records” are defined as inclusive of “Association election materials.” The new statute defines “Association election materials” as returned ballots, signed voter envelopes, the voter list of names, parcel numbers, and voters to whom ballots were to be sent, proxies, and the candidate registration list. This enhanced definition of “association records” has the practical effect of requiring HOAs to make the “association election materials” as defined above, available to members for inspection and copying pursuant to the timelines stated in Civil Code section 5210(a) – (b). As a limitation, however, the new statute makes clear that signed voter envelopes may be inspected but not be copied.
Election legal challenges: Under SB-323, a member may bring a cause of action within one year of either: (1) the date that a cause of action accrues; or (2) the date that the inspector of elections notifies the board and membership of the election results – whichever of these dates is later. SB-323 provides that, in order to prevail, a member must establish their case by a “preponderance of the evidence.” The new law states that if election procedures were not followed, a court “shall void any results of the election…” The new statute makes clear that a member prevailing in small claims is entitled to court costs and reasonable attorneys’ fees incurred for consulting an attorney in connection with this civil action. Furthermore, SB 323 allows a member-plaintiff to bring a cause of action for election violations in either the superior court or small claims court.
Mandatory IDR: Under SB-323, before an HOA commences a lawsuit against a member it must clearly offer IDR. An HOA may not file a civil action regarding a dispute in which the member has requested dispute resolution unless the association has complied with the internal dispute resolution procedures specified under Civil Code section 5910 by engaging in good faith in the internal dispute resolution procedures after a member invokes those procedures.

Senator Bob Wieckowski, representing the 10th Senate District encompassing the central and southern portions of the East Bay and South Bay, championed this legislation and it’s a game changer.