Potentially Disastrous Bill Pending in Sacramento [SB 1265]

The California Legislature continues to try to “fix” California common interest developments, yet elected representatives still do not understand the dynamic of volunteer run communities or what they need. Senate Bill 1265 is the latest example. SB 1265, authored by Senator Wieckowski from Fremont, seeks to revamp the HOA election process for the second time in 13 years.

This bill would bar any HOA board candidacy eligibility requirements, except that candidates must be members. Many associations ban delinquent members, non-resident members, or members suing the HOA, from serving as directors. Other HOAs ban two co-owners from running. Should this bill pass, all those sensible limitations on eligibility would be illegal. The bill also dramatically increases the technical requirements which must be followed during the election process, and would change Civil 5145(a) to REQUIRE courts to overturn an election if they are shown an error (the current statute says a judge MAY overturn the election).

The bill also begins with a declaration that HOAs are quasi-governments, just like cities, functioning like cities “in almost every way.” This is a dangerous and false statement. Try to tell the 24 unit building in Whittier that they are just like a city! HOAs are neighborhoods which have been given via covenants simple tools to enable shared living. They don’t have courts, or large staffs of dozens of full time employees, and their job is not to enforce all applicable laws – just to make sure neighbors are good neighbors and the governing documents are followed, and the community preserved.

The bill also would require HOAs to store outer ballot envelopes, which are signed by the voters, for later inspection and copying. Members may be justifiably concerned about their signatures being copied and distributed.

The Corporations Code at Section 7341 allows a nonprofit board to suspend member voting rights. Many HOAs use this process in response to assessment delinquencies, reasoning it makes no sense to allow a homeowner to vote when they are not paying their share of the association expenses. However, SB 1265, if it became law, would make that illegal, and override Corporations Code 7341.

Large and mid-sized HOAs have in recent years for the most part learned to conduct elections following the huge increase in technicalities which occurred in 2005. However, thousands of smaller HOAs either are unaware of the law (Civil Code 5100-5145) or ignore it completely. This bill would guarantee bad neighbors the right to run for the board and dramatically increase the number of HOA elections set aside on technicalities.

Senator Wieckowski clearly has not served as an HOA director, or he would never have agreed to author SB 1265. The bill will discourage HOA elections, and increase election disputes rather than decrease them.

Small to mid-size associations need help regarding HOA elections. Most small associations struggle on without professional management, much less legal counsel. They need simpler elections, not the kind of elections presented by SB 1265.

The bill is scheduled for a committee hearing on May 2. Homeowners, board members and managers may want to make their voices heard on this matter. To review any bill and its status in Sacramento, or to look up any California statute, visit www.leginfo.legislature.ca.gov

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®.