Homeowner associations (condominiums, gated communities, etc.) are estimated to number more than 52,000  in the state and comprise over six million housing units, or approximately one quarter of the state’s housing stock.  They are governed by elected resident boards that have much more control over these communities—and over their own longevity in office—than officers elected to government bodies at either the local or state levels.  They are served by the HOA “industry,” i.e. professional managers and lawyer specialists interested in protecting—and controlling—the elected boards.

Two bills in Sacramento would affect residents’ ability to run for seats on these boards.

SB 1265 in a nutshell would end the boards’ adoption of arbitrary bylaws restrictions on who can be nominated to join the board.  As noted in the latest legislative committee analysis,

Existing law requires association to adopt rules to specify the qualifications for board members. This bill would only allow an association to disqualify a member from being nominated for the board if he or she is not a member at the time of the nomination or has committed a felony in the last 20 years. Although an association could require a nominee to be current on assessments, the association would be required to offer the owner internal dispute resolution (IDR) to satisfy the debt in time to resolve the issue of outstanding assessments before the association’s deadline for submitting a nomination.

The bill would require the board-adopted bylaws to . . .
  • ensure that the meeting at which ballots are counted is accessible to all members or their representatives who want to witness the tabulation.
  • require a notice to be provided regarding the return and counting of ballots, nominations, and list of candidates’ names that will appear on the ballot.
  • mandate that the inspector of elections deliver to each member the ballots and a copy of the election operating rules at least 30 days before an election.
The bill would also require the signed voter envelopes, voter list, and candidate registration list to be in the custody of the inspector of elections or at a designated location until after vote tabulation and would require these items and the ballots to be considered association records subject to inspection and copying.

As described in the Legislative Counsel’s Digest, the industry-sponsored SB 1128, on the other hand, “would require, when the number of director nominees at the close of the nomination period is not more than the number of vacant director positions on the board, as determined by an inspector or inspectors of elections, the director nominees to be considered elected by acclamation if specified requirements are met, including a requirement that the association provide individual notice of the election and the procedure for nominating candidates …”  

In other words, for example, if there are three vacancies to be filled and no more than three nominees are eligible, the three can be appointed by the board so long as the residents have been given notice of this manner of election.

Marjorie Murray, president of the opposing Center for California Homeowner Association Law, comments:

On the face of it, SB 1128 seems “reasonable.” Why not dispense with elections (by paper ballot) when the number of candidates equals the number of vacancies to be filled?  Won’t associations save a lot of money?

First let me mention that boards are already doing  this: skipping elections and seating directors by acclamation.  SB1128 is at least the third legislative effort to get lawmakers to bless a practice already in place, suggesting that associations know it’s wrong, i.e. doesn’t comply with the state laws governing HOA elections (Civil Code 5200 et seq.)

The bill is dangerous because it confers this new power on boards who, under existing law, have the power to set qualifications for homeowners who want to run for a board seat.  This combination of powers would give incumbents total control over elections, when elections are the only check on the board’s power available to homeowners living in these self-governing communities.  HOA boards are quasi-governmental bodies with many of the powers of local government, e.g. the power to foreclose on someone’s home (akin to the county’s power to foreclose for unpaid taxes, though boards foreclose with greater speed and small amounts.)

Under existing HOA elections law, incumbents on boards have the power to set qualifications for running for a board seat, (and, consequently the power to “dis-qualify” dissenters or those perceived as reformers). SB1128 would give them a NEW power: the authority to seat their “qualified” candidates w/o a vote by the the rest of the community.

Unfortunately, we know that boards set unreasonable ‘qualifications’ like: candidates (1) have to speak English (2) must not have sued the association in the previous six years, even in small claims court; (see Griffing v Palos Verdes HOA, Los Angeles Sup Ct.) (3) must have no outstanding fines levied against them even for minor infractions, etc.

SB1128 is no small matter given the level of legal control that boards exert over the property, homes, and lives of association owners.  It is also no small matter given that boards control $12.4 billion in cash that they dispense in contracts, e.g. to property managers and to banks.