|NEW ELECTION RULES
This week's newsletter will continue to focus on the problems created by SB 323 and the need to adopt new election rules to satisfy the burdensome requirements of the bill.
Next week, we hope to address Accessory Dwelling Units (ADUs). ADUs will have a significant impact on homeowner associations when it comes to short-term rentals, rules enforcement, parking, and increased burdens on common area amenities. HOAs will need to adopt policies to address these issues. -Adrian
Kudos #1. Thank you so much for your wonderful newsletter. You have provided so much valuable information. Thank you! -Sue Q.
Kudos #2. Thank you! Love your emails. So informative. -Susan S.
Kudos #3. Every reader of your excellent newsletter must salute the enormous time commitment you made to produce this newsletter today! Your personal time is valued and appreciated by all readers, I am sure. -Marilyn B.
RESPONSE: Not everyone appreciated my criticism of the bill. The folks who wrote this convoluted piece of legislation are fuming. I received hate mail for pointing out the flaws. One reader believes any criticism of Gov. Newsom for signing the bill is a right-wing plot. It's not--it's the Russians. They are behind the bill.
Kudos #4. Adrian, I love your humor. -Mary M.
RESPONSE: I have to credit my mother for that. She has a way of putting a smile on everyone she meets. All I am, I owe to her.
Kudos #5. Your group does a phenomenal job of keeping us apprised of laws regarding HOAs and POAs. Thank you again! -Maggie L.
Kudos #6. I am so sorry this passed. Thank you for all you do! -Christine R.
ELECTION TIMELINE: In addition to all the other problems created by SB 323 (described in last week's newsletter), the election timeline is much more complex than I originally projected.
Fortunately, one of our senior attorneys, Wayne Louvier, updated the timeline posted on our website. You can find it here: 2020 Election Timeline. We will continue to tweak it as we parse out SB 323.
The complexity of the requirements imposed by the Center for California Homeowner Association Law (CCHAL) means most associations will be in technical violation of the law for most elections.
Boards should expect elections to now take 105 days instead of the 50 to 70 days under existing laws.
One more problem--the extended election cycle means recall elections cannot be completed in the 90-day window required by the Corporations Code. That will create its own set of problems. -Adrian
As with last week's newsletter, there were more responses than we could print. Some had to be edited to make room for others.
Nightmare Bill #1. I think there is a typo in the first line of your timeline: "At Least 90 Days Prior to the Annual Meeting: Select 2 or 3 inspector(s) of elections." Shouldn't it be "1 or 3"? -James P.
RESPONSE: It’s those gremlins again. It should have said "1 or 3" inspectors.
Nightmare Bill #2. Can you please clarify whether or not SB 323 applies to those commercial associations that were organized under Davis-Stirling, rather than the CICID?
RESPONSE: SB 323 applies to residential and mixed-use (both residential and commercial) associations. Commercial CIDs originally organized under the Davis-Stirling Act are no longer under the Act. They are now exclusively under the Commercial and Industrial Common Interest Development Act (CICID Act).
Nightmare Bill #3. Does SB 323 allow nominations for vacant board positions from the floor at annual HOA meetings? Are we limited to the list of candidates circulated in advance of the meeting? -Steve W.
RESPONSE: You can still nominate candidates at the annual meeting if your election rules provide for it.
Nightmare Bill #4. So happy to have been smart enough to move out of California two years ago and be done with the SOCIALIST view of life! So, so, so HAPPY!!! -Francyne W.
RESPONSE: Uh-oh. Now I'm going to get hate mail from socialists.
Nightmare Bill #5. Does this mean management companies can no longer facilitate annual elections starting January 1, 2020? Does it have to state in the association's bylaws that only title holders can run for office? Or can anyone run for office? -Rosaline C.
RESPONSE: Management companies can help facilitate elections, they just can't serve as inspectors for associations they manage.
Prior to meddling by CCHAL, homeowners could decide for themselves the qualifications of directors. CCHAL's legislation overrides all HOA bylaw provisions in California so that only owners are qualified to serve on boards of directors. This harms small associations that need the flexibility to elect someone who is not on title, such as the spouse of an owner.
Nightmare Bill #6. Most of this baffles me. Wait a minute—all of it baffles me. -Dolores
RESPONSE: Don't feel bad. Law firms all over California are trying to unravel the maze of inconsistencies and problems created by SB 323. Many were identified in last week's newsletter. No doubt more will emerge starting January 1, 2020. The bill creates full employment for lawyers (both those who want to sue associations and those trying to protect them from litigation).
Nightmare Bill #7. It seems the least the legislature and governor could have done would have been to allow electronic voting. That would really make voting so much easier for both large and small HOAs. -Vanda H.
RESPONSE: In 2013, the Community Association Institute's California Legislative Action Committee (CAI-CLAC) sought to lower the cost of elections and increase voter participation by introducing a bill for electronic balloting. It received stiff opposition from you-know-who (CCHAL) and the bill died in the legislature. At some point, it may be submitted again and, hopefully, common sense will prevail.
Nightmare Bill #8. Please publish information on who is CCHAL and by that I mean who its members are if such is available. -Paul F.
RESPONSE: CCHAL stands for "Center for California Homeowner Association Law." According to "GuideStar," their office is located at 3758 Grand Avenue, Suite 56, Oakland, CA 94610 and their principal officer is Marjorie Murray.
CCHAL claims their primary purpose is to inform, educate and train the public about homeowner association issues, rights, and laws. Several years ago, I attended one of their training sessions to see what they were teaching. It was a course on how to sue homeowner associations, complete with forms to file with the court. Just what we need--more litigation.
There is no public membership list for CCHAL that I could find. It's a little ironic since CCHAL is passing legislation requiring HOAs to publish their members' email addresses. Maybe someone at CCHAL will publish their membership list and bring some sunshine to the organization.
I looked for a website for CCHAL but could not find that either. They seem a bit secretive. I'm sure some of CCHAL's members are well-meaning. However, judging from the legislation CCHAL pushes each year, it appears their leadership is hostile toward associations.
Nightmare Bill #9. Can HOAs vote to remove themselves from the Davis-Stirling Act? -Ron R.
RESPONSE: This is not an instance where you can vote with your feet. If you're a common interest development, you're under the Davis-Stirling Act and SB 323 applies.
Nightmare Bill #10. In federal/state/county/municipal elections there are entire manuals written on the subject of the handling of "provisional" ballots, yet nothing appears to be incorporated into SB 323??? -Hank J.
RESPONSE: No, nothing. I would keep that on the down low. Otherwise, CCHAL will float another bill. The result would be more convoluted legislation and entire manuals written on the subject. (On second thought, it would mean more employment for lawyers. I could hire another one just to write manuals.)
Nightmare Bill #11. While SB 323 may not be perfect, there are important issues it addresses. -Greg P.
RESPONSE: There is not a single important issue addressed by SB 323. If CCHAL had proposed something sensible like elections by acclamation (which would have reduced election costs), SB 323 could have been a useful bill.
Nightmare Bill #12. As president of an association, I send out informational posts to Nextdoor, regarding things like gate repairs, safety alerts and street and landscape maintenance. We are considering use of an internet group (groups.io) as an opt-in service. Since internet groups are email based, do we have to share our group membership list beyond the opt-in membership? -Jim L.
RESPONSE: If the email addresses are maintained by the association, yes, you will be required to share them.
Nightmare Bill #13. Just because some scofflaw decides to run for the board doesn't mean anybody has to vote for them, so why worry? And if somehow that scofflaw put on a magnificent campaign and was elected to the board, he/she has only 1 vote among the 5 or more board members. -Hank J.
RESPONSE: Cumulative voting and voter apathy can put scofflaws and their buddies on a board before anyone knows what happened. Then, thanks to cumulative voting, it's almost impossible to get them off. Director qualifications (before SB 323) kept that from happening. That is all gone now.
Nightmare Bill #14. We are a small HOA. Our occupant information sheet allows occupants (with signature) to allow or not allow their contact information to be published. Is this sufficient? Or is another statement: “I do not want to be included in published directory” required? Is there a Bill 323 for dummies? I desperately need help! -Ingrid T.
RESPONSE: If you have something in writing from each owner that clearly states their information cannot be published, you should be safe. Even so, I would update the form so owners can specifically opt out of the membership list.
Beyond the information published by HOA law firms around the state, there is no "SB 323 For Dummies" that I'm aware of. We will be updating everything on our website to explain the maze of conflicting changes (at least the stuff that makes sense).
Nightmare Bill #15. Our ballots are out for vote and will be counted on November 5. Am I correct that this new bill will affect next year's election but not this one in process? -Bill B.
RESPONSE: Since your election will be completed this calendar year, it is still under existing election laws. You will need new election rules well before your next election.
Nightmare Bill #16. One item that may be confusing is that you mention under old law CPAs could be the inspector, but your summary lends readers into thinking this no longer can be the case. As a CPA in the industry, I perform inspector services for many associations that I do not provide any other service for. -Steven S.
RESPONSE: CPAs can be inspectors of election--just not for associations for which they perform other services. The same is true for management companies--they can serve as inspectors of election so long as it's not for associations they manage.
Nightmare Bill #17. Senator Wieckowski is the one who brought this Bill up again after Jerry Brown vetoed it. He has no business being in the Legislature... I even wonder if he has ever lived in a condominium association... so what's his real reason for initiating it yet again??????? -Angela B.
RESPONSE: Sadly, Sen. Wieckowski seems to be closely aligned with CCHAL.
Nightmare Bill #18. Does this apply to all HOAs or just those under Davis-Stirling? Some HOAs are voluntary. -Judy B.
RESPONSE: It only affects Davis-Stirling associations. Voluntary non-CID associations are not affected.
Nightmare Bill #19. Should our HOA start planning now even though our election is not until next year? -Wayne M.
RESPONSE: Yes, especially if it's in the first quarter of 2020. The complexity of the new election timeline almost guarantees problems and technical violations, thus my concern over litigation exposure CCHAL created for associations. See Election Timeline. We will continue to add notes to the timeline to help associations reduce their exposure.
Some of the changes imposed by SB 323 require action by associations. Failure to do so could result in significant legal consequences and cause the association to be out of compliance with applicable laws starting January 1, 2020.
As a result, law firms around the state are scrambling to put together packages to rewrite election rules for associations. We have done the same.
Because other legislation impacts creates the need for additional policies, we offer more than just election rules. See below and contact us for pricing.
Restated Election Rules. Required for ALL associations pursuant to SB 323. All associations must adopt or change their election rules to conform to the changed laws. Any election conducted without compliant election rules will make any election subject to legal challenge and may result in monetary penalties and an award of attorney fees.
Restated Bylaws. For all associations in order to comply with SB 323 and establish consistency with the mandatory revised election rules. Amending bylaws at the same time as the election rules will ensure consistency and avoid member confusion and mistakes.
Membership List Policy. For all associations which communicate or intend to communicate with members by email. SB 323 makes member email addresses part of the association’s membership list, which is available to all members upon request. All associations should make members aware that their email addresses are subject to disclosure on 1/1/2020.
ADU Policy. For all associations with garages or 500 square feet or more of space in which an accessory dwelling unit (ADU) or junior accessory dwelling unit (JADU) could be constructed. AB 670 voids prohibitions on ADUs and JADUs, but allows reasonable restrictions. This policy can be added to existing design guidelines or operate as a stand-alone policy.
Anti-Harassment Policy. For all associations as a result of the adoption of new DFEH Regulations. The changes add new requirements for associations to investigate and take action on claims made by protected classes of people.
Employee-Independent Contractor Analysis. For all associations utilizing independent contractors in order to determine whether they may meet the new test for being classified as an employee.
Elevated Structures Inspection Policy. For all condominium projects with exterior balconies and other elevated structures.
Electric Vehicle Charging Station Policy. For associations with common area parking in which an owner might wish to install an electric vehicle charging station.
Solar Policy. Sets forth requirements for individual owners’ installation of solar energy systems. This is especially important where the association is responsible to maintain, repair and replace roofs.
Communication Policy. Includes procedures for handling member/resident communications and helps to alleviate the inefficiencies associated with handling requests from difficult members/residents who unreasonably and disproportionately utilize the association’s time and resources.
Disability Accommodation Request Policy. Includes procedures for handling disability accommodation requests.
CC&R Restatement. If an association has not updated its governing documents in the last 10 years, it is usually more cost effective and beneficial to do a full restatement to comply with new laws.
CONTACT US if you have questions about our recommendations or would like pricing from our a la carte menu of policies.