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Why Homeowners Associations Need to Know California SB-323

Written by Posted On Monday, 22 March 2021 08:21
What to Know About HOA Elections in California What to Know About HOA Elections in California Image via Pexels

A while back, the California Governor signed into law Senate Bill 323. The law went into effect on January 1, 2020 and enacted several reforms to laws that govern elections in common interest developments and their boards of directors. Such developments are commonly called homeowner associations (HOAs). The reforms seek to increase transparency, fairness, regularity, and formality in elections. 

Duration of the Elections

Homeowner associations are now required to conduct their elections at least once every four years. The new law prohibits existing managers, attorneys, and accountants from serving as election inspectors for their associations. Now, pursuant to SB323, associations must hire independent third parties like Professional Election Inspectors who are not employees or otherwise under contract  with the HOA. 

Limited Right to Disqualify Members

The law limits the right of the associations to disqualify members from being candidates or voting. Unfortunately, this opens a door for members who do not contribute or follow the association's bylaws to vote. However, associations may disqualify a candidate who has been a member of the association for less than one year or if the candidate has been convicted of a felony that is likely to jeopardize the fidelity bond insurance of the association if he or she is elected.

Additionally, associations may disqualify candidates who are found to be delinquent in their regular or special assessments, unless the candidate has paid under protest, entered into a payment plan, or has not been provided with Internal Dispute Resolution (IDR). .

Lengthened Election Cycle

Existing laws before SB 323 required ballots to be sent to members at least 30 days before the counting of the votes. However, the new law requires homeowner associations to make two additional mailings before sending out the ballots. They must send a “Call for Nominations” to members at least 90 days before the election date and they must send a “Pre-Ballot Notice” to members at least 60 days before the election date. This means that the election cycle will take at least 90 days, and typically at least 105 days.

New Procedure for Uncontested Elections

The new law allows associations to vote by acclamation or 'voice vote' where there are uncontested seats in the election. This means that the candidates can take their seats as board members by operation of law (and without ballots being mailed out) when the number of candidates is equal to or less than the number of board seats up for election. It eliminates the costs and time spent in casting ballots for uncontested  races. 

Keeping of Members Lists

Administrators are now required to keep proper records for an election. In addition to ballots, administrators must keep voter lists, proxies and signed voter envelopes. There must also be an official candidate registration list.

In the past, voter lists have only included their names and mailing addresses. The new changes require the list to include email addresses, voting power, parcel number or the physical address of the voter's separate interest. Members do have the right to opt out of such lists.

These laws have made drastic changes as to how homeowner associations elect their leadership going forward. It is important that the leaders in office learn and understand the new rules so that the elections they conduct do not contravene the law.

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Jeff Romero

Jeff Romero is a writer and co-founder of the digital marketing agency Octiv Digital, an agency that works with many real estate agents and groups. 

https://www.octivdigital.com

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