HOA Boards—Don’t let your elections unravel—you need rules
Condo Law Guru
Beth Grimm
04 September 2016

All homeowners’ associations in California are required to have election rules. Whatever the Bylaws say about elections does not qualify as “Election Rules”.

The Board needs to adopt a set of rules that has the following in it, according specifically to California law. In fact, in California, there is an entire set of laws related to elections and if a Board does not follow the requirements for an election to amend governing documents, approve an assessment, or elect board members, the election could be challenged. Don’t let that happen! Don’t ignore the law – it may come back to bite you Board.

5105. Election Rules   (Davis Stirling Act)
(a) An association shall adopt rules, in accordance with the procedures prescribed by Article 5 (commencing with Section 4340) of Chapter 3, that do all of the following:

Many boards just do not get it – that the code requires associations to have election rules that contain certain provisions, and that having election provisions in the Bylaws is good, but not a substitute for adopting a good set of rules and circulating them to owners.

(1) Ensure that if any candidate or member advocating a point of view is provided access to association media, newsletters, or Internet Web sites during a campaign, for purposes that are reasonably related to that election, equal access shall be provided to all candidates and members advocating a point of view, including those not endorsed by the board, for purposes that are reasonably related to the election. The association shall not edit or redact any content from these communications, but may include a statement specifying that the candidate or member, and not the association, is responsible for that content.

Comment: This and (2) can be a problem if candidates want to make personal attacks and/ or circulate materials criticizing the Board. There is not a lot a Board can do but if materials could incite, it would be wise to seek legal advice.

(2) Ensure access to the common area meeting space, if any exists, during a campaign, at no cost, to all candidates, including those who are not incumbents, and to all members advocating a point of view, including those not endorsed by the board, for purposes reasonably related to the election.

Comment: (1) and (2) will come to be known as the “equal access” sections. The question will be: does it mean access must be provided, or just that if it is, it must be equal. And can reasonable limits be placed, such as frequency of times and manner of use. There is a 2013 appeals case (Wittenberg) that requires boards to provide equal access if the board “advocates for” a measure in an election. And so legal advice may be needed if any question arises.

(3) Specify the qualifications for candidates for the board and any other elected position, and procedures for the nomination of candidates, consistent with the governing documents. A nomination or election procedure shall not be deemed reasonable if it disallows any member from nominating himself or herself for election to the board.

Comment: It is important to pay attention to qualifications that appear in the Bylaws and make sure they get into the written election rules and in the meeting notice materials.

Pursuant to a case in 2013 (Friars Village), the board may consider adding some qualifications that do not appear in the association documents, but legal counsel should be consulted as to any limitations here. The Board in that case added a rule that a husband and wife could not be on the board at the same time. If candidates who are nominated and do not qualify to serve that raises a problem. One might ask whether they can be denied the right to run and/or whether it is possible for them to cure the non-qualification issue before the election.  Sometimes a hearing is required before anyone can be deemed “unqualified” or “disqualified”.

It is a dicey subject – the new law says that board may not prevent a qualified member from running for the board, and this suggests that members who do not qualify may be eliminated from the election. An example of something that might apply here (if reflected in the Bylaws) is “good standing” which is usually defined as current in assessment payments and not in violation of any governing documents. Sometimes questions arises as to whether failure to pay fines applies, especially if the owner has challenged the imposition of fines. And, if a Board disqualifies a candidate because he or she has too many pets, and a Board member also has too many pets, you can see that would be a big problem, and could unravel an election. It would be inconsistent application of the rules and of enforcement.

(4) Specify the qualifications for voting, the voting power of each membership, the authenticity, validity, and effect of proxies, and the voting period for elections, including the times at which polls will open and close, consistent with the governing documents.

Comment: Proxy use will very likely confuse people. See the section below regarding proxies for more information. The biggest difficulty for inspectors will likely be sorting out questions that arise between the mail in ballot process and the use of proxies and voting rights, cumulative voting, and combining nominations from the floor at the meeting. Again, good and legal rules will be a key to assisting with this.
As to the reference to “polls”, most associations do not have polls and this is just the sort of example that makes it clear the legislators do not know much about association elections. That said, sometimes the [imaginary] polls will close before the meeting at which the ballots are counted and others will close during the meeting. Different subject matter may dictate different processes. If the Board is arranging a presentation before voting, then ballots might be accepted after the presentation. In other cases, the ballot packages may be due in before the meeting starts, so a clear statement to Owners should be made about when the “polls” close.

(5) Specify a method of selecting one or three independent third parties as inspector or inspectors of elections utilizing one of the following methods:
Appointment of the inspector or inspectors by the board.
Election of the inspector or inspectors by the members of the association.
Any other method for selecting the inspector or inspectors.

(6) Allow the inspector or inspectors to appoint and oversee additional persons to verify signatures and to count and tabulate votes as the inspector or inspectors deem appropriate, provided that the persons are independent third parties.

(b) Notwithstanding any other provision of law, the rules adopted pursuant to this section may provide for the nomination of candidates from the floor of membership meetings or nomination by any other manner. Those rules may permit write-in candidates for ballots.

5130.  Proxies
(a) For purposes of this article, the following definitions shall apply:

(1) “Proxy” means a written authorization signed by a member or the authorized representative of the member that gives another member or members the power to vote on behalf of that member.

(2) “Signed” means the placing of the member’s name on the proxy (whether by manual signature, typewriting, telegraphic transmission, or otherwise) by the member or authorized representative of the member.

(b) Proxies shall not be construed or used in lieu of a ballot. An association may use proxies if permitted or required by the bylaws of the association and if those proxies meet the requirements of this article, other laws, and the governing documents, but the association shall not be required to prepare or distribute proxies pursuant to this article.

(c) Any instruction given in a proxy issued for an election that directs the manner in which the proxyholder is to cast the vote shall be set forth on a separate page of the proxy that can be detached and given to the proxyholder to retain. The proxyholder shall cast the member’s vote by secret ballot. The proxy may be revoked by the member prior to the receipt of the ballot by the inspector of elections as described in Section 7613 of the Corporations Code.

Comment: Proxy use will very likely confuse people. How they will fit in with these new election processes will depend on how associations integrate them, if at all, and how those reviewing elections that are challenged rule on their impact and use. There are no proxies in public elections, but HOA have used them for years and people don’t want to let go of the option. And to complicate things, most sets of documents say members can “appear” in person or by proxy at meetings. For the types of elections covered, it is clear boards should not count proxies as ballots, but should require the proxy holder to get a ballot package to vote the proxy.  The “revocation” aspect will also be confusing since ballots returned to the inspectors are not revocable, but proxies are. If you have a difficult election coming, you would do well to obtain professional expertise!

There are a lot more requirements found in the law in the 5100 series of the Civil Code which is part of the Davis Stirling Act. Consult legal counsel so you can do the elections right, or face having to do them over again and worse, having to deal with processes put in place after the election and decisions made that unravel before your eyes.

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