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December 19, 2006
Can a Non-Member of an HOA be a Candidate or Serve on the Board?
A lot of Associations have run happily for years, never knowing or really paying attention to who is qualified to or is serving as a board member, some simply because it is so hard to find board members that no one questions the right to serve when volunteers step forward. And here is the kicker - if the other board members like the board member who turns out to not be qualified, and they find out about it, they tend to look the other way. But if they do not like the Board member, and he or she turns out not to be qualified, they demand the immediate resignation.
So what's the law say? The advent of Civil Code Section 1363.03 has brought this to a head in many associations. Why? Because an HOA in California has to adopt Election Rules, and those rules have to state qualifications for serving on the board. In an earlier blog I addressed the difference between qualifications to actually serve, and qualifications to actually be nominated, as I believe it is important to pay attention to detail if you are trying to help a board cope with new (or any for that matter) laws.
In this blog I am sticking to member vs. nonmember service. If the HOA bylaws say that a board member MUST be a member of the Association, then that provision is enforceable. However, the important attention to detail is "who then, is a member?" The reason I bring this up? Some argue that since they have a legal right to a share of the property by community property laws, that they are in effect an "owner" or a "member" (members are usually owners and vice versa but read the fine print). So, is that true? Not if the governing documents define an owner or member as as "record" owner", as that generally means the owner's name must show up in the official property records of the county.
Some argue that since they are "buying the property", they are the owner/member and can serve on the board. Again, "record owner" may be a factor. Some membership definitions include contract purchasers, and some include contract sellers instead. So if one is buying a property on contract, they may or may not be entitled to serve on the Board.
As usual, there is more to this than meets the eye. Look for the definition of member, owner, and qualifications for board service in answering this question.
And the other question that arises is whether a person that has been serving for years who is not a member must get off the board when someone discovers that the documents say that board members must be members of the association. I would say this - it certainly is a good idea. If the Board continues to allow someone to serve that is not a member of the Association, when the Bylaws state that Board members must be members of the Association, and the person therefore clearly does not qualify, a member can challenge decisions of the Board.
Sometimes documents require a hearing before any Board member's position can be vacated because of non-qualification. That needs to be explored too.
Like the discovery that the Association has been charging assessments in a manner contrary to what the documents state as the correct allocation, the changeover from accidental (or purposeful) noncompliance, may require finesse, to avoid legal challenges and claims.
And you wonder why attorneys get paid the big bucks. Does this all confuse you too much? Then take this away: Do your best to comply, to follow all rules and requirements, treat people fairly, and govern responsibly.
And get the proper kind of professional help when you need it.
And one more thing: find out more about the new elections laws in California and also about checking for qualifications for board members at http://www.californiacondoguru.com.
Posted by Beth Grimm at December 19, 2006 5:57 PM