DIRECTOR CANDIDATE QUALIFICATIONS

Mandatory Qualification

Beginning January 1, 2020, associations must disqualify persons from serving on the board if they are not members. (Civ. Code § 5105(b).) That means a spouse not on title cannot serve on the board. An unrecorded deed does not make a person a member or qualify them to serve on the board. People with "pocket deeds" (unrecorded deeds they carry in their pocket) do not qualify as members. 

Verifying Qualifications. Verifying a candidate's qualifications is not one of the duties of Inspectors. However, Inspectors are given the power to hear and determine all challenges regarding voting issues. If an owner were to challenge a candidate's eligibility, the Inspector could require the nominee to produce proof of ownership.

Corporations and Companies. Entities such as corporations and companies can designate a non-member person to serve on the board. (Civ. Code § 5105(b)(2).) To verify the authority of the designating party, boards can review a company's governing documents or the minutes of a corporation's board meeting designating their representative. For family trusts, the trustee on title to the property can serve on the board. Recommendation: Associations should amend their bylaws and election rules to limit entities that own multiple units from holding multiple seats on the board of directors.

Permissive Qualifications

A person can be disqualified from serving on the board if:

• Delinquent. The person is delinquent in the payment of regular and special assessments unless (i) paid under protest, (ii) entered into a payment plan, or (iii) was not offered Internal Dispute Resolution (IDR) by the association. (Civ. Code § 5105(c)(1) & (d).)
• Joint Ownership. If the person, if elected, would be serving on the board at the same time as another person who holds a joint ownership interest in the same separate interest parcel as the person and the other person is either properly nominated for the current election or an incumbent director. (Civ. Code § 5105(c)(2).)
• Owner Less Than One Year. If that person has been a member of the association for less than one year. (Civ. Code § 5105(c)(3).)
• Criminal Conviction. A past criminal conviction that either (i) prevents the association from purchasing the fidelity bond coverage required by Section 5806 should the person be elected or (ii) terminate the association’s existing fidelity bond coverage as to that person should the person be elected. (Civ. Code § 5105(c)(4).)
• Term Limits.  

Qualifications That Are No Longer Allowed. Following are some of the qualifications which are no longer allowed:

• The person must be in good standing. 
• The person must not be in litigation with the association. A person suing the association can now serve on the board even though it creates conflicts of interest and confidentiality problems.
• The person has been convicted of a felony in the past ten years. Felons can serve on the board, provided the association's fidelity bond is not affected,
• The person is a second or third-tier registered sex offender. They cannot be excluded from the board unless it affects the fidelity bond.
• The person meets minimum age and residency criteria. This affects senior communities. This means that an 18-year-old who owns a unit through inheritance can serve on 55+ boards.

Qualifications Via Rule Change. Even though the bylaws may be silent on director qualifications or contain invalid qualifications, the court of appeals in Friars Village v. Hansing ruled that boards can adopt director qualifications in their election rules without amending their bylaws. This same authorization can be found in Civil Code § 5105(c)

Verifying Qualifications

Neither boards, management companies, nor Inspectors of Elections must verify candidate qualifications before mailing the ballots. However, if a candidate's qualifications have been challenged, the Inspector of Elections must investigate and decide whether a candidate is qualified. (Civ. Code § 5110(c).)

IDR Before Disqualification. Before disqualifying a nominee, the association must allow the person to participate in internal dispute resolution. (Civ. Code § 5105(e).) 

Unqualified Directors

Once a director is no longer qualified to serve on the board, e.g., they cease to be an owner, the board can vacate the person's seat, and a new director is appointed to fill the seat (unless the bylaws require seats to be filled by vote of the membership). NOTE: There is a split in legal opinions on whether vacating the seat is required. Some believe it is legitimate for the director to complete his/her term on the board but not be eligible thereafter to run for or be appointed to the board.

ASSISTANCE: Associations needing legal assistance can contact us. To stay current with community association issues, subscribe to the Davis-Stirling Newsletter.