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January 27, 2006
Elections in HOAs in California
Still concerned about SB 61 and elections in the coming year? So am I. I was at a national common interest development law conference this week and one of the sessions was on membership meetings, elections, proxies and the conduct of the "players". Attorneys from all over the country who practice law relating to deed restrictions and CC&Rs and homeowner associations were interacting with 4 attorney panelists ("experts" in CID law). Some interesting things were discussed. While discussing what happens at meetings, nominations from the floor, use of proxies, cumulative voting and other corporate voting matters, one comment that was made by an Arizona attorney was: "In our state, a law was passed last year that requires the absentee type of voting by mail ballot which creates all kinds of problems for associations whose documents allow for proxies and nominations from the floor. Associations are calling our office and asking what they need to do." Sound familiar?
California legislators are quite known for approving legislation for HOAs that puts associations in a position of needing legal help to figure out how to comply. The latest award for this goes to Senator Battin of the Coachella Valley area, for SB 61. An HOA will have great difficulty understanding how to resolve differences between the law and its governing documents. And elections may unravel before your very eyes as owners challenge processes in small claims court claiming a board's failure to successfully integrate the docs provisions with other laws they have heard about and with the new elections requirements. I am an attorney. I should be cheering - more work for me - eh? But what I am doing is sending suggested changes to the law that would better explain what is required. That is what I would like to see - although I do not hold out much hope that it will happen.
Secret and above-board voting processes, protecting owners' privacy, and on the other side achieving important ballot measures that are much needed by HOAs are what is at stake here. The public is sold on one side of the issue - HOAs need to treat owners equally and be fair and evenhanded in treatment of members. I agree. However, it is difficult to legislate that with detailed, complicated laws. And there is a need for volunteer board members and the "job" is getting harder and harder. Boards need to seek out professional help and that costs money and owners complain about the costs. As more and more board members get threatened with lawsuits, which problem seems to escalate as more and more practices are legislated, the available board member "pool" diminishes. Then what happens? The consumer suffers. Keep an eye on my website (www.californiacondoguru.com) for changes and updates on new laws, and how to cope. Hopefully, you can get enough insight from the site that you will know what is the best course of action to go forward, and meet the legislative requirements for your HOA. I do not give legal advice on the site itself, but I do post a lot of information on what is happening and because of certain realities, caution HOAs that are self-managed that failure to seek out the right kind of help can result in disastrous conseqences. Everything is OK as long as it is OK - right?
Posted by Beth Grimm at January 27, 2006 11:22 PM