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October 11, 2007
"GOOD STANDING" - WHAT IS IT GOOD FOR?
What does "good standing" mean and why would anyone like it?
These are my thoughts on the subject - "Good standing" means current with regard to payments of assessments and not in violation of any governing document provisions, including the CC&Rs and Rules. A "good standing" requirement is great - for board member service. If the Bylaws or CC&Rs provide for it, it assures that the Board sets a good example for the membership and respects the obligations of the governing documents. If the documents contain a "good standing" requirement for candidacy or service on the Board, a Director who does not qualify or falls out of "good standing" can be "ousted".
As to voting, it is my belief that requiring members to be in "good standing" to be allowed to vote complicates elections and due process procedures within the community. Generally, my experience indicates that members who violate the regulations or fail to pay assessments don't care if their voting privileges are revoked (and generally don't even bother to return ballots - although they may attend meetings just to stir up issues). However, I have seen situations where important measures are before the community and a sizable contingent of the community that is in violation of some requirement wants to vote it down, just because (because the members do not agree with anything the board does in some cases). In that scenario, it might make sense to have the right to deny the recalcitrant members the right to vote.
However, that leads to the question about what due process is required before an association board can impose the good standing requirement to disenfranchise members. Some documents do say that members of the association lose voting rights if they are behind in their assessment payments. That may be appropriate for "automatic" discounting the votes, but I do not like it. Other documents allow boards to suspend voting rights if a member is behind in their assessments or in violation of the rules or CC&Rs. Well and good - it would be my position that a hearing must be offered before the Board could suspend rights to vote on these bases. Why do I believe this? Because I have seen too many cases where owners have been taken by surprise, even blindsided, by these requirements in a contentious election. In some cases, the Board never imposed the sanctions in any previous election. In some cases, they have initiated the procedures after the election commenced, and sometimes, the facts lead to the obvious ... i.e., that the Board used the suspension or rights to throw an election. And that, of course, is devious and questionable, reprehensible, and, I should think, legally actionable.
As for suspending rights to use of the Association facilities for lack of "good standing", it may work well as a deterrent to abhorrent conduct, such as in the case of pool, laundry room, or clubhouse use. In other words, if a member (or by delegation his or her tenant) must be in "good standing" to use the association facilities, bad conduct may be minimized. A violation of the pool or other facility rules is a violation of the governing documents. And this is a remedy that may be enforceable against the tenants, whereby most other remedies are only enforceable against the owner, even for tenant conduct.
As a recap, suspension of membership rights for failure of "good standing" can be useful, but it can also be misused. Some boards apply the "good standing" requirement only sporadically, inconsistently, or to exert control in the face of controversial issues (sometimes just to keep members from voting who they don't like, or to keep people out of the pool that they do not like). In the course of using the "good standing" remedy, Boards may fail to provide owners with adequate notice and a hearing (required for such disciplinary actions). That conduct could be found to be improper on the part of the Board. For more on frequently asked questions such as this, visit the Guru at http://www.californiacondoguru.com. You will find questions and answers for members, board members, managers and realtors.
Posted by Beth Grimm at October 11, 2007 10:12 AM