Director Recall Questions. If one petitions for a board recall, do there have to be persons designated to run for a seat on the board? Can the homeowners remove just one board member or all of them? This group can't even come to a consensus who should be president, secretary or treasurer. Can I circulate a recall petition to homeowners based on that? -Gail C.
RESPONSE: You asked three questions. I will answer each in order.
1. Replacement Directors. No, you don't need to designate candidates in your petition to recall. Once your recall petition is filed, the board sets an election date. Normally, there would be a call for candidates so the removal and replacement of directors can be on the same ballot. Unfortunately, the dumpster fire known as SB 323 made a mess of the timeline.
The bill sponsored by Marjorie Murray's Center for California Homeowner Association Law (CCHAL) significantly lengthened the timeline for the election of directors to 120 days or longer. In so doing, the election of directors now exceeds the timeline for the recall of directors by one to three months. That means the election of directors cannot occur on the same ballot as the removal of directors.
To make the timelines work, the recall election must occur first. If the recall is successful, the directors remain in place until a second election can be scheduled for replacement directors. This creates another internal conflict since directors should vacate their seats if a recall election is successful. However, corporations are required to have a board of directors, so recalled directors must remain in place while a second election is scheduled, candidates solicited, ballots mailed, etc. What was previously done in one election, now requires two elections.
2. Recall One or All? Members can petition to remove one or more members or the entire board. If you have cumulative voting, removing less than the entire board is extremely difficult. It's a two-step process when counting ballots. First you must establish that a majority of a quorum of voting members approved the removal of directors from the board. If that is successful, a second calculation must take place to determine if a minority of the members blocked the removal. See "Removal of Directors."
3. Sufficiency of Petition. Can you circulate a petition to remove the board because it can't get anything done — not even the selection of officers? Yes. As long as it's for a lawful purpose, you don't need a particularly compelling reason to circulate a petition. However, to successfully recall directors you need a reason sufficiently compelling that members will actually cast ballots. Most recalls fail because not enough people will take the time to mark a ballot and return it.
NOTE: Before SB 323, removal and replacement of directors took 60 to 90 days. The process now lasts 150 to 210 days, or longer. Seven months is too long — Marjorie Murray's organization effectively killed recalls.
Restraining Order. If a board member has a restraining order against him placed by the other board members, is he eligible to run for office in an upcoming election? -Ben
RESPONSE: It's rare that a director's behavior is so bad that a court must restrain his interaction with fellow directors. Unfortunately, your restrained director can run for office despite the court's order. To prevent his re-election, fellow directors can campaign against him. They can tell the membership about the bad behavior that led to the restraining order and urge the membership not to re-elect him. Anything circulated to the membership must be truthful and cannot be at association expense.
Trustee Candidate. Civil Code 5100(g)(3)(B)(ii)(iv) states that a person who has been a member of the association for less than one year may not run for the board. Does a trustee, who becomes member of the association at the death of a long-time member, have to wait one year to run for the board? -Denyse B.
RESPONSE: The section you cited is not mandatory. It is one of the allowable qualifications by SB 323. If an association has not adopted this particular candidate qualification, it does not apply. Absent the qualification, a trustee on title is deemed a member and can run for office, whether on title for a day or a year.
Trustee Spouse. I think you left the word NO off on the paragraph below. "The spouse on title as trustee is the only one who can serve on the board. Because of SB 323, the beneficiary spouse can [NO?] longer be elected to the board." -Linda S.
RESPONSE: You're right. "NO" slipped out when I wasn't looking. Because of SB 323, a beneficiary in a family trust can no longer be elected to the board. The bill sponsored by Marjorie Murray's organization forced associations to accept felons and pedophiles on their boards, but prevents beneficiaries and spouses who are not on title from serving. Felons now rank higher than spouses when it comes to board elections.
Registrar of Voters. I seem to recall using a person from the Registrar of Voters to be their inspector of elections during a recall of two board members at no cost to the association. Not sure if they still do that, but it doesn't hurt to check. -Randy W.
RESPONSE: The League of Women Voters is also good at handling elections. Unfortunately, the complicated nature of elections under SB 323, the increased risk of litigation created by the bill, plus the requirement that inspectors hold election materials for one year, makes it untenable for most volunteers to oversee elections. Since SB 323 prevents management from handling elections, most associations are forced to hire inspectors, thereby increasing the cost of their elections.
An attorney in Northern California recently wrote about the costly impact of SB 323 on associations. "I represent a lot of small associations in the North Bay Area — some as small as 10 units, many in the 20- to 50-unit range. First, it is very difficult to find election inspectors. A few attorneys up here are doing it at their hourly rate or the association has to hire the big companies out of the area. They end up paying $750 or more just for the election inspector. Together with the costs of printing and postage, the small associations can be looking at $40 or more per unit for a ballot election. Most of the members in these small associations think that is a very poor use of their money."
If CCHAL really cared about consumers, the organization would step up and pay those costs.
Uncontested Elections. Doesn’t SB 323 supersede election by acclamation in current bylaws? -Robert R.
RESPONSE: As noted on previous newsletters, there is a split in the legal community on the issue. I don't believe SB 323 affects associations that authorize uncontested elections in their governing documents. The bill did not prohibit the seating of directors in uncontested elections. Instead, it authorized it for associations with 6,000 or more units, which means authorizing language does not need to be in their bylaws. Accordingly, if associations with less than 6,000 units provide for uncontested elections in their governing documents, they can seat candidates without balloting. Associations that do not provide for it must go through the balloting process. Because it is an unsettled issue, boards should follow the advice of their legal counsel.
Website Research. Since we rely on your website for research purposes, may we presume the Adams Stirling website is currently up to date with all the changes that were implemented as a result of SB 323? -Ron C.
RESPONSE: SB 323 had a lot of tentacles and impacted an inordinate number of election provisions. We think we updated everything on the website. If anyone spots something we missed, please let us know.
In preparation for everyone's return to work, Tammi Saucer in our accounting department made custom face masks with our firm's logo on them.
Just as our firm is preparing for a new normal, boards need to prepare as well. It's clear that social distancing and face masks will remain in effect for the foreseeable future. That means virtual board meetings will continue.
Tracking County Changes. Following are some of the changes in county and city restrictions implemented in the past few days:
NorCal Changes. The updated spreadsheet reflects Yolo County pool closures and the addition of Yuba, Tuolumne, Mono and Sutter Counties to the chart. Tuolumne County instituted a ban on nonessential short-term lodging, as did Mono County. Pools are closed, tennis courts appear to be same-household use only, golf courses are closed, and social distancing must be followed for walking, hiking, biking.
The City of Fresno has orders that are more restrictive than the county. It closed all facilities except trails, but is temporarily allowing RV parking on streets for essential workers self-isolating from family members.
Monterey County added a face-covering order and is limiting short-term lodging to identified essential purposes. Nevada County replaced their Order from 4/15/20 — pools remain closed; tennis courts are open to members of the same household; golf is open pursuant to guidelines; and dog parks are open with listed restrictions. The Order was extended to May 15, 2020.
Sonoma County changed its park closures with specific guidelines which gave clear orders that pools, tennis courts, golf courses, gyms etc. are closed, except that golf courses with paths can open for walking, jogging, hiking and bicycling.
A press release for the Counties of Alameda, Contra Costa, Marin, San Francisco, San Mateo, and Santa Clara as well as the City of Berkeley, announced that a new shelter-in-place order will be issued this week, extending the restrictions through May, with limited easing of specific restrictions.
SoCal Changes. Palms Springs allows HOAs to open pools to a single swimmer. However, it requires them to remove and/or stack/chain pool furniture to render furniture unusable. Drinking fountains and showers must be closed or roped off. It also requires high-touch areas such as handrails, restroom surfaces, light switches, dispensers, faucets and doorknobs to be sanitized frequently. Even though golf courses are open in Riverside County, they remain closed in Palm Springs.
Santa Barbara is opening outdoor activities provided people comply with social distancing. People are now allowed to visit and walk through botanical gardens, golf, and play tennis and pickle-ball, walk, hike, run, bicycle, pleasure drive, and work around their residences, including gardening. San Bernardino County now allows tennis with social distancing. There are a number of county orders expiring between April 30 and May 4, so we should expect further updates in the upcoming days.
County Tracking Chart. For a complete list of county restrictions and links to their orders see: County Orders as of 4-29-20. More changes are expected May 1. If we missed any updates, please contact us with the missing information.
Thanks to Megan Hall and Jason Savlov for compiling the data on California counties' C-19 restrictions/guidelines on use of HOA facilities, including the valuable links. And thanks for informative overall discussion of the matter. -Art I.
Thank you for all of your newsletters. The information you supply is excellent. -Jan K.
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Thank you for the informative newsletters. It helps to see that HOAs all over have the same or similar issues. -Gail C.
I recently was elected to our HOA board. There are no words to fully convey how genuinely appreciative I am of your website and the wealth of reliable information it provides for i-dotters & t-crossers like me. -Lori B.
|DISCLAIMER. Our newsletter provides commentary based on sketchy information we receive from readers. From time to time, we add a little humor. Some find it amusing. Others are appalled. Some readers are excited when they score free legal advice. Not so. Our newsletter provides commentary only, not legal advice. You need to pay real money for an attorney to review all the facts and give you a legal opinion. We do that too, but you have to actually hire us. It's okay, we're friendly. You can call us. Keep in mind we are corporate counsel to associations only.