Though looking outside my office window this week shows anything but the coming of warm spring weather, the calendar reflects we are in the midst of the season for common interest development board of director elections. These elections provide an opportunity for homeowner and condominium associations to either “get it right” or “get it wrong.” If they get it right, they follow strict compliance with the law and the association seamlessly transitions power. But if they get it wrong, divisive challenges, mistrust and litigation may ensue, often splitting apart the community.
California law requires very strict compliance with the formal board election voting procedures and protocols outlined in Chapter 5100, et seq., of the Davis-Stirling Act (the “Act”). In my experience first representing associations and then switching sides of the “v” to represent individual homeowners in HOA disputes, I have found that California courts give wide deference to HOA boards of directors in several governance issues, such as decisions relating to maintenance, selecting vendors and entering into contracts. There is a seminal California Supreme Court decision directly on point: Lamden v. La Jolla Shores Clubdominion Homeowners Ass’n (1999) 21 Cal.4th 249. However, I also have found an exception to the general rule of judicial deference to community association board decision making–when evaluating board elections. In these circumstances, I believe courts require strict compliance with the law, and hold HOA and condominium boards feet to the fire in ensuring board elections are conducted without any deviation from the association’s governing documents and state law.
Strict Compliance with Election Rules
The Act describes several protocols and procedures for board elections, including requirement for associations to adopt election rules, appointment of an Inspector of Elections, use of secret ballots, determination of qualification for voting, tabulation and retention of ballots, use of proxies, prohibition of use of association funds for campaign purposes, and actions to challenge elections. As noted by the mere number and categories of procedures described in the foregoing sentence, it is obvious the Act provides for very detailed and specific election rules. Rather than recite the entire statute here, I will highlight the rules with citations to the specific chapters of the Act.
Under Section 5100, the Act mandates that associations shall adopt election rules. The rules must ensure that the association provide equal access to association media, such as websites, newsletters, or common area locations (e.g., club houses, lobbies, mail kiosks, etc.). The association may not edit or redact any content from candidate communications, but may include a statement specifying that the candidate or member, and not the association, is responsible for the content. The rules must also specify the qualifications for candidates and procedures for nomination. Unless an association’s governing documents state otherwise, nominations from the floor shall be accepted.
The Act also requires that the association select one or three independent Inspector of Elections. “Independent” may, but is not required, to mean a volunteer poll worker with the county registrar of voters, a licensee of the California Board of Accountancy, or a notary public. An independent third party may not be a current director, candidate for director or a person related to a director candidate for director. The Inspector also may not be a person or business entity currently employed by the association or under contract to the association, unless expressly authorized by rules of the association. This last clause is important, as it would disqualify a professional management company from serving as an Inspector of Elections, unless expressly allowed for under the association’s election rules. The complete rules relating to Inspector of Elections are found under Section 5110 of the Act.
Rules relating to the use of secret ballots, including two-envelope system, verification of signatures, ballot tabulation and publication, and ballot retention, are quite comprehensive and covered in four separate Sections of the Act: 5100, 5115, 5120 and 5125.
Proxies are discussed in Section 5130. A “proxy” is a written authorization signed by a member, or the authorized representative of the member of the association, that gives another member or members the power to vote on behalf of that member. Proxies for board member elections shall not be construed or used in lieu of a ballot. Under the Act, associations shall not be required to prepare or distribute proxies. Proxyholders shall cast the member’s vote by secret ballot.
Use of Association Funds
Association funds shall not be used for campaign purposes in connection with any board election. Association funds also shall not be used for campaign purposes in connection with any other association election except to the extent necessary to comply with duties of the association imposed by law.
Legal Challenges to Elections
Legal challenges to board elections must be brought within one year of the date the cause of action accrues, ordinarily the date of the election. Civil actions may include requests for declaratory or equitable relief, injunctive relief and/or restitution. A member who prevails in a civil action under Section 5145 of the Act shall be entitled to reasonable attorney’s fees and court costs. In addition, a civil penalty of up to $500 may be imposed for each violation of the Act.
Common interest development board elections are minefields fraught with peril for those associations who do not exercise strict compliance with the law. Courts most likely will not show deference or give leeway to associations who deviate from the detailed and comprehensive election rules–even in circumstances where the violations were unintentional or merely “technical” in nature.
If you have any questions regarding a past or upcoming board election, reach out to competent legal counsel experienced in homeowner association governance issues.