Reader Questions – Are HOA Board Term Limits Allowed?

Mr. Richardson:

I appreciate your column in the [paper]. Many of your topics are extremely helpful.

According to our election rules and bylaws, no director shall serve more than two consecutive terms. The president now claims that SB323 has done away with term limits and she can run again and continue to serve on the Board for a third consecutive term. She also claims our attorney said there are no longer term limits, however, no board member has been allowed to see that correspondence.

Please, would you help to clarify this? I’m hoping you can provide some direction.

L.K., Westchester

 

Dear Kelly: First I’d like to thank you for all the great articles I read in the [paper].

Our HOA does not have term limits for board members. There are plenty of us that would like to have term limits and I’m shocked that when the HOA was created that this was excluded.

Thanks, A.T., Beaumont

 

Dear L.K. and A.T.:

Many HOAs find term limits useful to ensure a healthy turnover of the board and have bylaws which limit consecutive terms of service. On the other hand, HOAs having difficulty in filling their board seats may find term limits to be undesirable. The key is for each association to adopt a system which works for its community.

However, a change in the law this year may take that option away from California common interest developments.

The new law now in force from last year’s SB323 appears to have eliminated term limits from HOAs in California. Civil Code Section 5105(b) lists one mandatory disqualification for board candidacy – non-membership – and subpart (c) of the statute lists four optional disqualifications, which an association can adopt in its election rules or bylaws (assessment delinquency, co-ownership with a current director, not a member for at least one year, and felony conviction which would affect HOA’s dishonesty insurance). The unanswered question is – are these the only qualifications allowed, or are these five legislatively approved but there could be other disqualifications adopted by the HOA? At this point, there is no ironclad answer, but the conservative consensus among the legal community is that the list of these five disqualifications is exclusive.

If the list is exclusive, then term limits would be eliminated under the current statute. The term limit is itself a disqualification from candidacy, and if no other disqualifications are allowed, then term limits are gone in California HOAs.

At this point, it does not appear worth the effort to try to adopt term limits in bylaws or election rules, because it is possible a court would find that a term limit is outside the approved five disqualifications.

This is one of the many unintended negative consequences of SB323 for California HOAs. Hopefully the Legislature, whose members all work under term limits, will move to correct this problem. The author of last year’s SB323, Senator Wieckowski, has introduced Senate Bill 969, which proposes to add term limits to the list of authorized disqualifications. If passed, this would not apply until next year.

[Readers: The official web site of the Davis-Stirling Common Interest Development Act is www.leginfo.legislature.ca.gov. Read any California statute or current or pending proposed legislation. The Davis-Stirling Act is found at Civil Code 4000-6150]

Written by Kelly G. Richardson

Kelly G. Richardson Esq., CCAL, is a Fellow of the College of Community Association Lawyers and a Partner of Richardson | Ober | DeNichilo LLP, a California law firm known for community association advice. Submit questions to [email protected]. Past columns at www.hoahomefront.com. All rights reserved®.