Mandatory Qualification

Beginning January 1, 2020, associations must disqualify nonmembers from serving on the board. (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. 

Permissive Qualifications

Effective January 1, 2020, a person can be disqualified from serving on the board if the association changes its election rules to provide for one or more of the following:

• 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) terminates 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 that 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 this creates conflicts of interest and confidentiality issues.
• 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 doing so would affect the fidelity bond.
• The person meets the minimum age and residency criteria. This affects senior communities. This means that an 18-year-old who inherited a unit can serve on 55+ boards.

Qualifications Via Rule Change. Even if the bylaws are 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 appears in Civil Code § 5105(c).

Corporations, Companies, and Trusts

Corporations and companies can send a representative to run for the board. (Civ. Code § 5105(b)(2)) For limited liability companies, the person must either be a member of the LLC or authorized by its documents to manage the company. (SB Liberty v. Isla Verde (2013) 217 Cal.App.4th 272, 283-284)  For corporations, the person must be a member of its board of directors. Boards can review the minutes of a corporation's board meeting that designated its 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 more than one seat on the board of directors.

Verifying Qualifications

Verifying a candidate’s qualifications is not one of the duties of election inspectors. However, if a candidate’s qualifications are challenged, the Inspector must investigate and determine whether the candidate is eligible to serve on the board. (Civ. Code § 5110(c)) The Inspector may require the nominee to produce proof of eligibility.

IDR Before Disqualification

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

Unqualified Directors

Once a director is no longer qualified to serve on the board, for example, if they cease to be an owner, the board can vacate the person’s seat. (Civil Code § 5105(f)) Once the seat is vacated, the board can appoint someone to fill it (unless the bylaws require that seats be filled by a vote of the membership). See “Director Appointments.” ​​​​​​NOTE: Legal opinions are split on whether the seat must be vacated. 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.