E Day is Here
Background: The year 2006 brought invasive and complicated (and quite painful) elections reform for HOAs in California. What reads as a pretty innocuous law is really a major sweeping change in disguise. The author of the bill did not seem to have a grasp on the realities facing HOAs in elections in writing the law. He did seem to have a bias against HOAs and a belief that elections in HOAs across the state needed more protections for secrecy and objectivity in tabulation if the ballots. What did not seem to sink in is that most associations have difficulty not only finding candidates to run for the board, but also in getting owners to vote in association elections (unless of course it is for a BIG SPECIAL ASSESSMENT). And quite a vast majority of associations in California have 25 or members or less and so complicated double envelope mail voting procedures seem overly burdensome and an unnecessary expense.
The Bills Involved: For the text of the bills SB 61 (the actual elections bill) and SB 1560 (the clean up bill), go to: SB61 & SB1560. But you may want to read on first because trying to make sense of the statutory language may feel like an exercise in futility.
Public Voting Processes and Corporate Voting Processes At Odds: When the legislator who authored this bill modeled it after the public voting system, short shrift was given to existing Corporations Laws, existing governing documents, existing common practices, and existing common problems, and of course there seemed to be little to no understanding of the widespread apathy associations face. The law was created in quite a void , and the fallout is that we (you and I) have to live with its terms. I have to figure out how to advise you with the least pitfalls and heartburn, and you have to attempt to carry out your elections dealing with the “old ways” vs. “the new”.
History of Attempts to Make It Better (or Maybe ‘”Less Worse”): Immediately as it was signed into law last fall, the cleanup efforts were institute to correct the most glaring problems. The problem was everyone had their own ideas of how to clean up the mess, but various proponents were coming from different perspectives. The author was bombarded with demands and suggestions for cleanup. The clean up legislation (SB1560) was not signed into law until September 22, 2006, which created a multitude of confusion during this “transition period” as it kept changing too. Then, to top off the confusion, it was given the same operative date as the original bill, i.e., July 1, 2006 which created a retroactive quandary and possible challenges to any elections taking place from July 1 through September 22. Luckily, there seem to be very few elections taking place the middle of summer. Most happen in the firsts three months of the year or the last three months of the year. Still and all, associations had to scramble to try and keep up if they did have elections within a few months after July 1. Many associations wanted rules written right away; they were hearing that there were advantages to getting them before July 1, 2006. In fact, the law said Associations had to have them, and so many sets of rules were written before the clean up legislation was finalized, even knowing they might have to be changed after the clean up legislation was signed into law. It’s been a frenzy ever since the beginning of the year because the HOA public has been besieged with varying interpretations of the language of the law, varying requirements in elections rules, and varying advice as to how to proceed. Lawyers disagreeing with lawyers on the interpretation of a law is not good as it leaves Boards and managers in the middle of sometimes heated debate on how to properly follow the law; but in defense of the lawyers, this new elections law complicates the process beyond belief when one tries to properly reconcile other existing laws and governing document provisions. Of course, there are those that ignore everything else than the new law (even though that would not be a very good approach in my opinion). However, things might settle down in the coming year if one is ready to undergo…………….
DISCLOSURE: Beth Grimm is no longer providing legal services, having retired effective December 31, 2018. All of the information contained herein is for guidance and information only. An attorney should be consulted to assist with drafting election rules.
READ AN ELECTIONS SUCCESS STORY!
The New Elections Law – Can The Principle of “KISS” (KEEP IT SIMPLE STUPID) Be Applied?
“Breaking Tradition – It’s Time to Rethink Elections in HOAs” – for an article offering some long term solutions and rational approach to coping in the long run, read this article.
A Sample of BASIC ELECTION RULES Pointing Out Important Considerations.
The law itself – what does it say?
If your rules were written before SB 1560 was signed into law, read the article that says what changes might need to be considered now.
For Quandries about Process, Proxies and Potential Problems (The 4 Ps of Elections)
For an Ongoing List of “What Ifs” – find out about many things that have already happened to Associations in elections this year, and how hindsight can help others avoid common issues that arise. And send in your own “What Ifs” and I will try to provide answers. (click here)
For a list of suggestions about solving problems through document amendments (click here)
For more information in general:
Of course, there’s my blog. There, you will find a running commentary on many elections law issues, and from the posts, you can sort of historically visualize the pain in the transition.
Then, there are my FYIs to clients over the past 10 months, many of which have dealt with elections law issues. (click here)
There are the articles I have written on the subject.
What are some of the things wrong with the new law?& Note: be prepared for a thought-provoking memorandum full of statute references and noted conflicts.
FAQ (and Answers) in Understanding the New Law
Sample Board Resolution For Adoption of Election Rules
Sample Proxy
And there will surely be more over the coming year. It is going to take a year for this new elections reform law to