Legislative Suggestion Box

Dear California Legislature,

Each year you address HOA bills which often respond to specific narrow issues or complaints. Except for the California Law Revision Commission’s excellent 2014 revision of the Davis-Stirling Act, major helpful changes in the Act have been rare in recent years. May I suggest some ways you could help California HOAs?

Reduced quorum

Larger associations often struggle to make membership decisions due to low participation. Associations could govern themselves more successfully with an automatic reduction of quorum to 25% when the first attempted director election failed for lack of participation.

Eliminating proxies

Proxies are a frequent dispute issue and are unnecessary, since members can vote in advance and by mail. Banning proxies, except to help attain quorum, would help.

Allow electronic HOA voting

HOAs are the only variety of California corporation which cannot vote electronically. In an age when we buy airplane tickets on smartphones, why cannot HOA members participate by voting on line?

Seller contracts

Require sellers to provide governing documents to HOA buyers within 5 days of contract – without buyers requesting it. Most buyers do not review CC&Rs, bylaws, and rules until long after taking ownership. Associations can easily provide the governing documents (which increasingly are on HOA web sites). Better informed new members make for better neighbors.

Uncertified managers

Penalize managers who do not reveal they are not “Certified.” Managers must under Business and Professions Code 11504 disclose if they are not “Certified” under Section 11502. However many managers fail to comply, and there is no penalty.

Require minimal board education

Florida requires directors to commit to some minimal level of education. California should require some minimal (maybe three hours?) basic board education.

A “small associations” act

It is unreasonable that the Davis-Stirling Act applies equally to the 5 unit association as the 5,000. The small ones need simpler laws.

Eliminate cumulative voting

Cumulative voting is allowed in the law and typically in older governing documents. It is confusing, allows election game playing, and should be eliminated.

Delinquent directors

Disqualify directors or candidates if they are 90 days late on assessments. Delinquent members should not serve on or run for the board. Adding a new subpart “g” to Civil 5100 would stop this.

Preserving part of HOA’s assessment lien from bank foreclosure

Why is it fair for a bank can wait a year or more to foreclose, and then wipe out the association’s assessment lien? Many states protect 6-9 months of assessments from foreclosure. California lags behind on this issue.

Make the priority of delinquent assessment payments non-waivable

Some collection companies insist that as part of a delinquency payment plan, the member must waive the rule that payments must first be applied to the assessments and last to the collection vendor’s fees. This is wrong, and should be stopped.

Deny attorney fees to a party which refuses to mediate

California Association of Realtors contracts say that a party not offering or accepting mediation cannot recover attorney fees if they win the lawsuit. Applying this concept to association disputes would encourage efforts to settle.

Expand the conflicts of interest listed in Civil 5350

Some directors demand to review confidential or privileged documents concerning their past or present dispute with the association. This abuse of the director’s position should be banned.

Those are my ideas; what are yours?

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®.