Conducting Annual Meetings
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  California's Leader in Community Association Law April 14, 2020
CONDUCTING
ANNUAL MEETINGS

QUESTION: Our annual election is this month but the board decided to delay it until after the pandemic is over. We have 3 open positions and 2 candidates, so the outcome is known but the election is being held anyway for compliance.

Is there any provision in the Civil Code for a situation like this? We are conducting our board meetings by video conference. Can we do the same for our annual election? -Steve L.


ANSWER: This is where voting by acclamation is clearly called for. There is no reason to go through the expense of hiring an inspector of elections, printing ballots, mailing them, collecting them, and counting them when you already know the outcome. If elections by acclamation are authorized by your bylaws, I believe your inspector can declare the outcome now. If it's not authorized by your bylaws, we need legislation so you can put it in your election rules without amending your bylaws.

Delayed Meeting. I understand the board's desire to avoid the complications of holding an election now, especially since it seems likely stay-at-home orders will be lifted next month. Even with the lifting of orders, there will continue to be some form of social distancing and difficulties holding annual meetings since a second round of the virus is predicted.

RECOMMENDATION: Your board should look into proceeding with the election. Many associations have already conducted annual meetings under current conditions using a teleconference or video conference platform. It can be done without too much difficulty. The inspector can open ballots and tabulate votes from his/her office with a camera set up to video everything. The video can be streamed to the audience and/or recorded and posted on YouTube so members can watch it, if they are so inclined.

QUESTION: What should happen when an inspector of elections does not show up at the annual membership meeting? -Michele N.

ANSWER: With the coronavirus still on the loose, we are seeing more inspectors refusing to handle ballots. If the ballots collected by your first inspector are transferred to your management company unopened, the board can appoint a volunteer to serve as inspector and proceed with opening ballots and tabulating votes. If there are no volunteers, the meeting will need to be postponed until another inspector can be hired.


Electronic Voting. Electronic voting would easily solve the problem. Members could use their computer, laptop or smart phone to vote. There are no paper ballots and no gathering of members in one room. Unfortunately, Marjorie Murray's organization opposed Assembly Bill 1360 that would have allowed electronic voting:
Arguments in Opposition: The Center for California Homeowner Association Law (CCHAL) opposes this bill ...CCHAL maintains that the rationale for the bill is that electronic balloting increases voter participation, but that no research from a neutral third party establishes that this outcome will be achieved.
If the bill had passed, all associations could hold elections today in spite of the coronavirus, and do so inexpensively.
 
TIME TO
REOPEN GYMS?
 
QUESTION: What is the current direction on reopening gyms? -John M.

ANSWER: Keep them closed. The family of a Walmart employee who died from COVID-19 is suing Walmart for wrongful death, claiming the store failed to protect him from the virus. Your board could end up in a similar situation if you opened your facilities now.


Potential Liability. Opening the gym sends a signal it is safe to use. If a resident subsequently contracts the coronavirus and dies, the family could blame the association for not doing enough to protect its members. Will they have difficulty linking the virus to the gym? Yes, but it won't matter. The association will have to defend the action. I recommend keeping the gym closed until the Governor lifts his "Stay at Home" order.
 
 
SB 323
DUMPSTER FIRE
 

Spouse Not On Title. Wouldn't allowing spouses on the board give too much power to one unit? I can't imagine spouses disagreeing with each other in public. Or am I misunderstanding something? -Lee B.
 
RESPONSE: If spouses were on the board at the same time, it could be a problem for the reason you cited. However, that is not what I was referring to in yesterday's newsletter.
 
Second Marriages. It's not uncommon for only one spouse to be on title. This is especially true in second marriages. It is also not uncommon that a person who is on title to have no interest in serving on the board or has no time to do so. However, the spouse who is not on title has the time and is willing to serve.
 
Small Associations. For small associations that have trouble recruiting people to serve on the board, spouses who are not on title are welcomed as board members. Thanks to SB 323, they can no longer be elected to the board.
 
Second-Class Citizens. Associations should be able to decide for themselves what works best for them. The bill sponsored by Marjorie Murray's Center for California Homeowner Association Law (CCHAL) unilaterally took that right away and relegated spouses not on title to the status of second-class citizens.

Impossible Timelines. SB 323 had built-in drawbacks from day one. The timelines are impossible to implement. They should have allowed associations a one-year period of implementation of the new statue. That was a shortsighted error. We are going to produce new election rules but we anticipate the need to also amend our bylaws as well. -Daniel G.

RESPONSE: SB 323 was completely unnecessary, poorly drafted, and costly for associations to implement. It's a dumpster fire. You have no choice but to adopt new election rules. Amending your bylaws is not required at the moment. You might wait to see if the SB 323 can be rescinded, or at least cleaned up.

 

QUESTION: Is cumulative voting illegal? -Janice B.

ANSWER: No, it's legal but it's a problem. It's included in the bylaws of all new common interest developments because it gives owners a voice when the association is controlled by the developer. Once the developer is out of the picture, there is no need for cumulative voting. There are too many problems with it. I recommend getting rid of it.

QUESTION: We recently had 2 out of 5 directors resign. The remaining directors appointed persons to fill the 2 vacant positions, one of which was a director who resigned. We had other applicants willing to fill the seat. Is it legal to appoint someone who resigned? -Patrick K.

ANSWER: Yes, it's legal. Unless your bylaws have a provision that a resigned director cannot be appointed to fill a vacant seat, the person can be appointed to fill the seat.
Safe Cracking. One of your recent letters referred to safe cracking, and that made me immediately think of a humorous ditty I received in reference to COVID-19. "I used to spin the toilet paper on the roller like I was on the Wheel of Fortune, now I turn it like I'm cracking a safe." -M.S.

Ask a 12-Year Old. I fell on the floor LMAO. Your advice, “Ask a 12-year-old” is so on point. At 5, our grandson would say “I don’t think that’s right Poppy." He would then pick up his phone and say "Hey Siri.” Thanks for your continuing leadership and influence; it extends beyond CA as NJ inquiry shows. Semper Fi! -Leland B.

RESPONSE: I had to ask a millennial what LMOA meant. It means, "Laughing My A_ _ Off." I like it! We need more LMOAs.

Your newsletter is a valuable source of information and a great reference as well. Thank you. -Daniel G.

I absolutely love your newsletters. Keep them coming! -Chris M.


 
Boards can contact us for friendly,
professional advice.


Adrian J. Adams, Esq.
Founder & Managing Partner
ADAMS|STIRLING PLC

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