In October 2021, Governor Gavin Newsom approved the following three bills affecting homeowner association elections: SB 392, SB 432, and AB 502. These bills made some improvements to the HOA election laws that were passed in 2019, but then they complicated others. First, SB 392 made one simple improvement regarding election material retention. The prior law required retention until the election cannot be contested, which left many people wondering, when is that? And the new law that became effective January 1, 2022, made it simple by requiring retention of election materials for one year after the election date.
As a reminder, California Civil Code § 5200 (c) defines “association election materials” as returned ballots, signed voter envelopes, the voter list of names, parcel numbers, and voters to whom ballots were to be sent, proxies, and the candidate registration list. Signed voter envelopes may be inspected but may not be copied.
Next, SB 432 cleaned up a discrepancy that the 2019 law had left between the Davis-Stirling Act andnthe Corporations Code, both of which apply to most community associations. Corporations Code Section 7511(c) was amended by extending the maximum time for associations to hold the recall/removal and new board member election vote from 90 to 150 days from the date of receipt of the petition. This will allow associations to comply with both Civil Code Section 5115, which requires associations to send a general notice 90 days before an election, and the Corporations Code, which requires the recall/removal to occur within 90 days of the receipt of the petition. According to the old law, in order to comply with both statutes, associations would have been required to send the notice on the day they received the petition.
Last but not least, AB 502 expanded the vote by acclamation rights to all California community associations. The process makes the election timeline 120 days, plus the time needed to prepare and send ballots in between the nomination deadline and ballot mailing. However, the timeline does not include any time for revising election rules. If an association needs to revise its election rules, it will need to add another 30-60 days to go through the rule revision process, including a board meeting to review the current election rules and make changes, a 28-day member comment period, and a board meeting to review comments, approve rules, and issue notices to members of the rule change. In no event, however, can election rules be written or amended within 90 days of an election of the board.
Even if a community association has a contrary provision in its governing documents, it may hold a vote by acclamation if it has done all of the following:
• Held a full election of the board by secret ballot within the prior three years;
• Provided individual notice of the election and procedures for nominating candidates at least 90 days before the deadline for submitting nominees;
• Sent a reminder notice between 7 and 30 days before the deadline for submitting nominees, as described in the statute;
• Provided a receipt within 7 business days of receipt of nominations to the person who made the nomination;
• Provided the nominee with confirmation of the nomination, including whether the nominee is qualified or not, and notified the nominee of the appeal process;
• Required the association to permit all candidates to run if nominated, except for nominees disqualified from running, as described in the statute; and
• The number of candidates does not exceed the number of vacancies being filled by the election.
If the association meets all the requirements, then the board may post a board meeting agenda no later than four days before a board meeting to vote by acclamation. The agenda must list the qualified candidate names that will be elected. Of note: although the law is silent on the true intent of the new law, it is believed to be to avoid the expense of sending ballots when an election is uncontested. For this reason, after the nomination deadline, the board can call the meeting to vote by acclamation without sending out ballots.
The new law also clarifies that associations may maintain term limits. This means that if an association previously removed them because term limits were considered a board member qualification that was not allowed under the 2019 laws, the association would need to revise their election rules again to include the term limits. This would require the association to go through the 28-day member comment period before adopting new term limits.
Associations with bylaws or CC&Rs that prohibit voting by acclamation should add a statement to their election rules clarifying that the California Civil Code has made those clauses obsolete. This change, so long as it is only to comply with the civil code, does not require the association to go through the 28-day member comment period.
AB 502 also clarified some confusion in other areas of the election law by requiring assistants to the inspectors of election to meet the same third-party definition, and by requiring the candidate list to include the address of the candidate [be mindful of the Safe at Home law that allows persons who claim they are a victim of domestic violence to use an address provided by the secretary of state rather than the actual address of the candidate].
The bill also requires the candidate to comply with, not just enter into, payment plans for money due to the association, it clarifies that requirements for the nomination procedure notice and the general notice of an election only apply to board elections and recalls, and it aligns the corporations code with the civil code. These changes to the election law became effective January 1, 2022. If an association has a history of a lack of interest in serving on the board, it should get started early to enable the use of voting by acclamation.
As always, if a community association needs guidance as to how to ensure election rules are completely up to date or requires assistance with an election, a community association attorney should be consulted.