June 2, 2008
What Elections Are Covered by the New California HOA Elections Law?
Here is a question about elections that is pretty straightforward.
"I have read and re-read the section on Election and Voting Procedures and can't find anything in the section that covers anything other than the election process. The reason I ask is that we recently put out a ballot to the membership to give the Board authority to grant fence extensions from back of unit wall - recognizing that 1363.07 removes that authority unless owner approval is achieved. ... Anyhow, I don't see in anything Section 1363.03 that requires a secret ballot for anything other than an election of officers. Can you offer any comments on this issue?"
Civil Code Section 1363.03 provides, in part pertinent to this question:
(b) Notwithstanding any other law or provision of the governing documents, an election within a CID regarding assessments legally requiring a vote, election and removal of members of the association board of directors, amendments to the governing documents, or the grant of exclusive use of common area property pursuant to Section 1363.07 shall be held by secret ballot in accordance with the procedures set forth in this section.
Civil Code Section 1363.07 is the statute that requires the Board, with a few exceptions noted, to obtain 2/3 approval of the members to grant an owner exclusive use of common area so the procedures of Civil Code Section 1363.03 apply.
Posted by Beth Grimm at 9:21 PM
May 22, 2008
Elections Errors - How Do You Know What to Do About Them?
I get so many questions from readers about elections. Here are just a few ... and my answers to the best of my ability, given my knowledge and expertise. Do not take these answers as the only possible answers. The California elections law is just complicated enough and unsettled enough that attorneys disagree on answers and application of portions of the law. However, I think it fair to "weigh in" on some of the issues.
Here goes:
Question: "I'm on the board of our HOA and our management company mailed the call for nominations on the 29th of April and closed on May 2nd. Is there not an amount of lead time specified for this? Seems a little short notice to get people to be nominated."
I agree wholeheartedly, it seems way too short a time, and believe that any person acting as a hearing officer and deciding whether the election was fair or not would have a problem with a 3-4 day op to put one's name in the hat, especially for a mail solicitation, given that California law has a presumption in it of 5 days delivery time for first class mail. There is nothing in Civil Code Section 1363.03 that specifies a minimum time for soliciting candidates, but ... there is obviously something wrong with this picture.
Question: "What is the requirement and liability of the Board if the information that the Property Management Company [or Board] puts out for an election is incorrect? "
Answer: This is the way I would guess it might go:
LEVEL ONE : PROBABLY ACTIONABLE, PROBABLY SUCCESSFUL CHALLENGE: If what happens is directly contrary to the law, then any owner would have a right to challenge the election, and could probably unravel the election, if he or she could prove the errors were direct violations of the statute, or the intent of the statute. The idea of the statute is to make sure that elections are fair to all.
LEVEL TWO: As above in the facts about the time for weighing in as a candidate, if what the owner who wants to challenge the election is relying on facts and circumstances that are not contrary to anything stated in the law, because there is not any standard stated in the law, the hearing officer would probably give some consideration to whether the error mislead, misrepresented, or misdirected the owners such that the election was not fair.
LEVEL THREE: If an owner wants to challenge an election on something they perceive as unfair or illegal, and it is not in violation of the statute and there is a question as to whether it was unfair to all, or the owner just perceives it as unfair, the hearing officer would have more trouble unraveling the election.
Question: "I have a question about a recent election. I am on the Board. When the homeowners received notice for elections the letter stated that we had two positions available, however when the ballots arrived via mail in February there were three (3) candidates names on it and we were told that we had three (3) votes now. Our monthly statements had the annual meeting date as one day but on the ballots and election paperwork there was another. At the annual meeting the Property Manager said there was no quorum however there was no sign in list or other supporting documentation present. The Property Manager indicated that it was a clerical error. The board did not take any action to correct the misleading information and at the next meeting there was again no quorum, no homeowner list, and no election."
Answer: This sounds like a series of errors and it apparently no election results were announced. Should there have been? This Board can go back and correct the errors; however, should it? Someone would have had to count the ballot packages that were returned in order to determine if there was a quorum because a sign in sheet for the meeting would not do it. Maybe it was obvious there was not a quorum, so obvious that no one made a move to get formal. It is hard to tell.
The other problem seems to be a lack of interest. After two times without a quorum - if true, it would be time for the Board to make a decision. Given the errors, does the Board go back to square one, or count the votes that are in and name the candidates? Here, it seems there were 3 candidates for 3 positions ("we got 3 votes"), after two tries, and it the question arises as to whether the Board should go backwards, or forwards.
It's a good question that I cannot answer as a legal opinion, but I would be inclined to think that it makes sense to go forward, even recognizing that there were some errors. There are probably facts that I am not getting through the questions asked and they could be important in the scheme of things, but lack of quorum and interest in elections is a common nagging problem for HOAs, and I am not of the camp that believes that HOAs have an obligation to keep calling for another counting date, and another, and another, until the enough members "wake up" and vote (because it may never happen). The biggest "non-statutory-error" is the failure of owners to vote when given a fair opportunity to do so. If that opportunity was not fair, then we are talking about a completely different animal.
Posted by Beth Grimm at 9:20 PM
February 1, 2008
The "Taste" Test For Your Upcoming HOA Election - Do You Want Sour Lemons or Butterscotch?
Okay, maybe I have been a little hard on Boards and even attorneys in the last two posts on my blog. And since I know for a fact that owners can be just as problematic, I thought I would set the record straight. I am not in favor of people serving on the boards of their association if they are not in "good standing". By "good standing", I mean current with their assessments and in compliance with the governing documents and rules.[Note, this does not mean that anyone can go out and say it's illegal for a Board member to serve if they are not in "good standing". The question of legality can be resolved, but not by me, speaking my opinion - it would have to be resolved by a review of the governing documents.]
And although I think it more trouble than its worth in most cases, I believe that a Board does have a right to suspend a member's rights to vote in an election - if the CC&Rs or Bylaws (note, I did not say Rules and will explain below) provide the authority for it. What sometimes happens though is that Boards recognize they have a right to suspend a member's rights to vote, but miss the requirement (which is often present in the documents, although perhaps not in tidy language along with the suspension provision) of a hearing that must take place before the member's rights are suspended. Even if the documents do not have a requirement for a hearing before suspension of membership rights, the Corporations Code does, in Section 7341 - which requires a hearing before a member can be expelled or suspended. And yes, I know that there are those who will say 7341 does not directly apply, because we are talking about suspending the right to vote, but not suspending the member.
What I believe is that suspending a member's right to vote or suspending their right to attend a meeting are issues that go right to the heart of membership itself. And I am of the "camp" that believes if a member's right to vote is going to be suspended, that they have a right to know that before the election occurs, so that they can cure the deficiency if they want to. Sometimes an owner will not even know there is a problem, unless the Board sends notice to them.
And this is why I added the cavaet about rules vs the governing documents, when it comes to suspending member's rights.
The authority in the CC&Rs and Bylaws has higher integrity than the Rules. And although the Rules can provide more detail on any given subject, the authority for the Rules must come from the documents. I am not of the "camp" that believes a Board can alter the membership rights in the corporation, such as suspending rights to vote, by setting Rules just because the documents say the Board can set Rules. There is a difference between altering membership rights in the association and controlling use of property through the imposition of Rules (and what you can put in Rules relating to use of property is for a whole other discussion someday).
And this is where the "taste" test comes in. I suggest skipping the sour lemons and going right to the butterscotch - meaning address the membership in a way that "tastes better". Let all members whose rights might be suspended in an upcoming election know exactly why and what they can do to remedy the problem to be able to vote. If a hearing is not required per the documents, so be it. Even if a Board can suspend the rights or the documents say that an owner has no right to vote if their assessment account is not paid in full - it makes sense to let the owner know that this is jeopardizing their right to vote. If they want to vote, they are likely to clear up the problem! If you don't want them to vote, and you would rather spring it on them by noting when the ballots are counted that some ballots are being pulled for nonpayment of assessments, or some other issue, you are as much of a problem as they are.
An election tastes like sour lemons (maybe even worse, if really tainted) when owners are disenfranchised for the wrong reasons. Sure, I understand that Boards are often sick of people who complain at the meetings, withhold assessements, make architectural improvements without approval, and make their lives miserable. After all, who wouldn't be? But cutting them out of the election process without acting responsibly, and understanding the requirements in the governing documents, lowers the level of respect and suggests either incompetency or an inappropriate motive. And timing is everything. These are things the Boards should think about well ahead of the election:
Are we going to prohibit people from voting because of .......
If we are, we ought to make sure we do it right.....
Maybe we need professional advice ...
From a professional that sells butterscotch, not sour lemons.
Posted by Beth Grimm at 9:25 AM
October 9, 2007
WRITE IN CANDIDATES - ARE THEY ALLOWED?
Here is a question about write-ins:
"We just had an election for Board members at our Condo and the ballot had a blank for a write in candidate. Is that OK? (A write in candidate received enough votes to get on the Board.)"
The answer to the question is "yes". A Board may provide on the ballot for write-in candidates. The new elections law provides this as an option. It does not appear from the statutory language, however, that is required, but if your governing documents or election rules require it, I say provide a blank for write-ins.
Posted by Beth Grimm at 9:16 PM
July 28, 2007
Should Agendas Be Required With Meeting Notices?
SB 528 is a bill before the California legislature. It would add a requirement to HOA meeting notices to include the agenda. Some people love the idea of requiring the agendas to be provided so members can see them, before the meeting, and others hate the idea. Some love the idea that the Board cannot consider action on any items that are not on a pre-noticed agenda and others hate it. Some want more legislative regulation on owner notice issues and some think the technical, detailed and complicated regs such as those proposed below are simply made to trip volunteer board members up. You can judge for yourself. A later blog will cover some of the arguments for and against the provisions in the bill. Here are some passages in the bill:
"(f) Unless the time and place of meeting is fixed by the bylaws, or unless the bylaws provide for a longer period of notice, members shall be given notice of the time and place of a meeting as defined in subdivision (j), except for an emergency meeting, at least four days prior to the meeting. Notice shall be given by posting the notice in a prominent place or places within the common area and by mail to any owner who had requested notification of board meetings by mail, at the address requested by the owner. Notice may also be given, by mail or delivery of the notice to each unit in the development or by newsletter or similar means of communication. The notice shall contain the agenda for the meeting...."
HERE'S THE KICKER ...
"(i) (1) Except as described in paragraphs (2) to (4), inclusive, the board of directors of the association may not discuss or take action on any item at a nonemergency meeting unless the item was placed on the agenda included in the notice that was posted and distributed pursuant to subdivision (f). This subdivision does not prohibit a resident who is not a member of the board from speaking on issues not on the agenda.
(2) Notwithstanding paragraph (1), a member of the board of directors, a managing agent or other agent of the board of directors, or other agents or a member of the staff of the board of directors, may do any of the following:
(A) Briefly respond to statements made or questions posed by a person speaking at a meeting as described in subdivision (h).
(B) Ask a question for clarification, make a brief announcement, or make a brief report on his or her own activities, whether in response to questions posed by a member of the association or based upon his or her own initiative.
(3) Notwithstanding paragraph (1), the board of directors or a member of the board of directors, subject to rules or procedures of the board of directors, may do any of the following:
(A) Provide a reference to, or provide other resources for factual information to, its managing agent or other agents or staff.
(B) Request its managing agent or other agents or staff to report back to the board of directors at a subsequent meeting concerning any matter, or take action to direct its managing agent or other agents or staff to place a matter of business on a future agenda.
(C) Direct its managing agent or other agents or staff to perform administrative tasks that are necessary to carry out this subdivision.
(4) (A) Notwithstanding paragraph (1), the board of directors may take action on any item of business not appearing on the agenda posted and distributed pursuant to subdivision (f) under any of the following conditions:
(i) Upon a determination made by a majority of the board of directors present at the meeting that an emergency situation exists. An emergency situation exists if there are circumstances that could not have been reasonably foreseen by the board, that require immediate attention and possible action by the board, and that, of necessity, make it impracticable to provide notice.
(ii) Upon a determination made by the board by a vote of two-thirds of the members present at the meeting, or, if less than two-thirds of total membership of the board is present at the meeting, by a unanimous vote of the members present, that there is a need to take immediate action and that the need for action came to the attention of the board after the agenda was posted and distributed pursuant to subdivision (f).
(iii) The item appeared on an agenda that was posted and distributed pursuant to subdivision (f) for a prior meeting of the board of directors that occurred not more than 30 calendar days before the date that action is taken on the item and, at the prior meeting, action on the item was continued to the meeting at which the action is taken.
(B) Before discussing any item pursuant to this paragraph, the board of directors shall openly identify the item to the members in attendance at the meeting. "
_______________________________________
So what does all this complicated mumbo jumbo mean? [IF THE BILL IS SIGNED INTO LAW]
1. Boards have to think ahead and plan agendas for board meetings open to the members and have them ready to post with meeting notices. (Hint: if you provide notice of the meeting through the bylaws or a newsletter, just make sure the agenda goes out with a followup notice of the meeting mailed to members or posted in a prominent area of the common area.
2. Boards may not "discuss or take action on any item at a nonemergency meeting" that is not on the agenda. However, there are provisions allowing those at the meeting to override this limitation for an emergency matter; and
3. It seems to me that this would not prevent boards from acting on and discussing emergency items at a legally called emergency meeting (and note that owner notice is not required under the Davis Stirling Act for emergency meetings, but they are defined and regulated by statutes in it).
4. The bill would not prevent discussion on items raised by owners to the extent that questions deserve answers (what you have to be most careful about is taking board action on something that was not on an agenda, unless it fits the "emergency" exception).
5. Boards will definitely have to PAY ATTENTION if this bill passes, think and plan ahead, and be prepared as failure to follow through, IF IT IS PASSED, might have some bearing on whether the action was considered to be legal or not.
.
Posted by Beth Grimm at 8:41 PM
March 12, 2007
Acclamation and Appointment for Lack of Candidates/Interest - More On The Subject.
The elections questions never end. I have been communicating with Janet of www.parli.com, (Robert McConnell Productions). There are articles and answers to questions on www.parli.com related to homeowner association election issues and resources and publications you won’t find anywhere else. The following information related to Roberts Rules was provided to me and I highly recommend visiting the site for even more questions and answers.
Now ... we were talking about the kinds of problems that arise over finding enough candidates sufficient to need a ballot, a lack of voting quorum, and qualifications for Board members (all of which are ongoing concerns for homeowner associations). I asked for feedback about how Roberts Rules looks at these issues.
She has a different perspective that I and than managers of associations. She is, however, an owner in a common interest development and has served on her board of directors. Now, here are some important thoughts she shared with me:
On striving for nominees: "The way I read the California law that you sent me, it does not require more people to be nominated than there are positions. Looking at the concept from a Robert's Rules prospective, Robert's does not recommend pitting people against each other, but finding the best people to be nominated for office. In finding the best people, he means those who are current on dues or assessments, and having certain talents or abilities that fit the position. For example, some one who has accounting or bookkeeping experience would certainly be a good fit for the office of Treasurer. Some one who can't balance his own check book would not make a good treasurer. So the important thing is to find people willing to serve who fit the positions.”
On the difficulty of finding candidates: Janet acknowledges that this is difficult in HOA's, and raises some relevant points:
"1. Sometimes the reason people don't want to be considered for positions is because of how things are run.
2. Sometimes people are bypassed because they are considered "troublemakers."
3. It is hard to tell how many of the “apathy” problems are really “prejudice” problems as opposed to a lack of willing participants.
4. In this vein, sometimes boards won't go out of our own circle of influence."
She has some recommendations:
"1. Try sending out a letter that is informational about serving on the board telling what the position is, the term, what are the duties of the position, the hours it takes to fill the position, and that someone will train that person. (Be sure there is follow up on that last one).
2. If after doing that there is still no response and the board or nominating committee has made an earnest and genuine effort to find people, then send a ballot out with blanks for those positions and encourage people to write in a name. IF when the ballots are counted and no one gets elected, then the board deals with it at that time. [In Janet’s state, the law provides that board members stay in the office until someone is elected and qualified. So if no one is elected then that board member or officer stays in the position until the next election. Note, most documents in California say this also.]
3. If a person is elected that does not meet the qualifications of that office (no assessments paid or otherwise as in the bylaws) then they are not considered elected because they haven't qualified.
4. Now about a quorum. When sending the ballots out, members should be instructed that if they are not returned and there is no quorum there will have to be another election. This will end up costing them money! Maybe this will get their attention.
5. By reading the information you sent me, HOAs have to send out a mail ballot even though only one person per office is on it. I (Janet) didn't see any exceptions in the law."
6. On qualifications: "The qualifications should be carried over into the election rules [when there are good standing qualifications in the bylaws] and a date that the assessments must be paid, for example, for the candidate’s name to be put on the ballot, even if that date is 35 days prior to the election. That would give those sending out the ballot time to make changes and print a current ballot."
She asks the question, rightly so: “Why would you allow someone to be nominated and put on a ballot who hadn't paid dues and may not pay them by election day? This is confusing and may end up causing problems in the association. The best policy is to have these kinds of things in writing from the beginning.
Janet and I both recognize some of the problems associations are experiencing, such as:
1. HOAs are set up such that volunteers are expected to know what to do to operate an association, without any training or policy manual to follow;
2. In HOAs, power struggles often abound and this deters people from running, especially if they have served and found out that they have no say in anything because of power- happy overbearing people;
3. Sometimes HOAs are so poorly run it causes great divisions with the association and no one wants to get involved.
It is clear that a basic understanding of the democratic process, parliamentary procedure, and
improved communications and relationships could solve many of the problems going on in associations. Whether this alone will solve the apathy problems is yet to be seen.
I urge you to visit http://www.parli.comand see if there is something there for you.
Posted by Beth Grimm at 9:58 PM
What Happens If Owners Do Not Sign The Ballot Envelopes?
Elections in California homeowners associations - more questions. What happens when owners do not sign the ballot envelopes? In their wisdom, the legislators in California passed a law that requires, among other things, a process for voting that requires owners to sign the outside (mailing envelope) that is part of the voting package. That one requirement has raised a number of issues. First but not least, does it mean inspectors need to verify the signature matches a signed list of signatures? Very few associations have such a master list of signatures on file.
I do not believe it does - however, I do believe that the signature needs to be there to count the ballot (the way the law is written). It will provide a means of verification as the person who purportedly submitted the ballot if that for some reason becomes a necessity.
Next question - is there anything the association can do if it comes to light through the inspector(s) that there are several unsigned ballot packages coming in?
The point of an election is to allow owners to "speak" through voting. Unsigned ballot packages cannot be counted. So if the discovery is made ahead of counting the ballots that there are unsigned packages, I see no reason why the board and inspectors together cannot initiate a process to try and correct that problem. The inspectors cannot release the ballots, but they can arrange with the board a place to bring the ballot packages and allow owners to come and sign that did not do so. This process does not involve opening, returning or altering any ballot, and the ballots do not leave the custody of the inspector or inspectors. This process could take place at the annual meeting before ballots are counted, or at some other arranged sitting prior to the meeting date. If the association has a clubhouse ..... perfect location.
Now, what kind of notice should go out? I was asked if the inspectors, who were members of the association, could call the owners. I do not believe that is wise. The notice to owners who did not sign should, I believe, be consistent and equal for all owners in this position. The notice could be mailed to owners who returned unsigned ballots, letting them know about the "signing sitting". A notice could be sent to all owners reminding them to sign all ballots and letting them know that there are some unsigned ballots that could be signed at the "signing sitting", but I do not see this as the best way to handle the matter. I believe sending a letter to all members could confuse them and make all of them wonder if they forgot to sign the envelope.
The law neither bans nor provides this remedy. It comes from the concept of "creative practicality" (or, in more simple terms, fixing what is broken). Remember, the point of the new law is not to stifle the voting process, but to enable and encourage members to vote from their homes. It just happens that the technicalities tend to get in the way.
Posted by Beth Grimm at 9:17 PM