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May 12, 2006
"E-DAY" IS COMING - You Will Need New Good Election Rules!
. E-Day is coming. Every homeowners association in California has to adopt election rules for elections that involve assessments (above the legal limit the board can impose without member approval), board member elections, amendments to the governing documents and transfer of common area. And proposed "clean up" legislation, SB 1560, may expand the rules to all association elections. Timing? Look for a provider now who knows their stuff, and get help, because integrating the new elections processes is not a "slam dunk". The law was written without regard to existing Corporate Law requirements and common governing document language and its not easy to interpret or to apply to "real life" Association elections. In fact it is so not easy to interpret that attorneys in this State who do Association work exclusively and have for years do not agree on its interpretation or implementation. Everyone is qualifying their proposals to write election rules with CYA language like: "we will help you to make a good effort to comply with the new law." I challenge you to find a definitive representation like: "We know how you can absolutely avoid challenges to your elections' processes." So find someone you trust to serve your association, not some family law who did your divorce or patent attorney brother-in-law who thinks the law sounds simple enough.
And do this as soon as you can, because you will need the rules for every election that is subject to the law taking place after July 1, 2006. In fact, if cleanup legislation is passed, you will need them for all association elections taking place after July 1. But there is one more twist. This does not mean you are doomed if you do not get the rules by July 1, but there is a strategy in the timing. Visit the guru at http://www.californiadondoguru.com to read about timing. Click on the SB 61 New Elections Law link on the front page, and then on the timing link.
There is clean up language proposed that may or may not be approved, and also there is talk of it taking years to really "clean up" this new law, so be prepared for changes even after the rules are drafted. Get the picture? The State legislature has unwittingly created a "full employment for attorneys act" with this new elections reform. Attorneys are needed to draft the rules, to challenge the rules, and to defend Associations that get challenged on implementation. And don't blame the attorneys for the problems. Attorneys all over the State are asking for changes that will clarify and simplify the law, without success. Why is there confusion? Since attorneys have different types of associations as clients, ranging from 3-4 unit condos to highrises to 2000+ single family home developments, there is disagreement as to the best way to "fix" the law. Talk about being caught between a rock and a hard place. It just doesn't get much more challenging than this for Board members.
Watch out for the pitfalls in this new law. To see what to watch out for, check out the condoguru at http://www.californiacondoguru.com. Click on Elections After SB 61 on the front page. And don't talk to too many different attorneys. You will just get more confused.
Posted by Beth Grimm at May 12, 2006 11:17 PM