How can we create fair HOA elections?

CAI’s absurd vision flies in the face of democracy and common sense

By Deborah Goonan, Independent American Communities

Back in April 2018, I posted an article about several pending bills in the state of California, among them SB-1128 and SB-1265. (In case you missed it, you can read the post and access links to the bills here.)

Since that time, both bills have been actively debated in both houses of the Legislature. Thanks to the efforts of the Center for California Homeowner Association Law (CCHAL), and much to the dismay of the California Legislative Action Committee (CLAC) of Community Associations Institute (CAI), both bills have been thoughtfully amended to address some of the controversial provisions, yet remain favorable to housing consumers, namely members of association-governed communities.

For example, both bills now allow for disqualification of board candidates who have been convicted of a felony with the 20 years prior to their nomination. And both bills now allow associations to require that board candidates — including incumbent board members — be current on payment of regular assessments. However, the association must be able to prove that the member is delinquent in order to disqualify a board candidacy. The bills also define regular assessments as not including fines, collection costs, or attorney fees, and members on a payment plan cannot be disqualified from board candidacy.

Currently, both bills have passed in the Senate, and are due for a third and final reading in the Assembly. Future updates to CA SB-1128 and SB-1265 will be posted here at IAC.

SB-1265 has been drafted and endorsed by CCHAL, and sponsored by Senator Wieckowski. SB-1128 was originally drafted and supported by CLAC, and sponsored by Senator Roth. However, according to a recent email distributed to CCHAL subscribers Marjorie Murray, President, CAI-CLAC has now done an “about face,” opposing their own bill.

Why? Read on to find out.

 

Elections in HOA-ville, American style

It’s important that readers recognize a few important facts about HOA, condo, and co-op elections in the U.S.

First of all, few states have election laws that offer as much consumer protection as California. Some states, such as Florida, require election by ballot for condo and co-op associations, but have no such requirements for homeowners’ associations in planned communities.

For example, in 2017, due to the efforts of CCHAL, California law now requires “equal time” and “equal access” to association meeting spaces and communication venues for all board candidates. Prior to this amended legislation, homeowners in California were commonly denied access to the association’s website, social media page, mailing list, and meeting rooms, making it next to impossible for new candidates to effectively campaign against entrenched board members.

In most parts of the U.S., the reality is that the incumbent board of directors makes it exceedingly difficult for newcomers to make themselves known to members. In small associations, candidates can easily go door-to-door to meet neighbors. But in larger communities, or communities with many seasonal and part-time homeowners, this traditional method of meet and greet is not practical or effective.

Another common board entrenchment tactic is to require board candidates to be selected by a nominating committee. But the nomination committee may consist of board members or friends of the board who are unlikely to choose candidates with opposing points of view on important issues.

The board or its committee also limit the candidate pool by setting all sorts of arbitrary “qualifications” to prevent members who oppose the board from getting on the ballot.

California law also now requires that associations ensure neutral third party oversight of the entire election process. However, in most states, it’s common for members of the board, a community association manager, or the association’s attorney to collect and tabulate ballots and proxies, managing the entire voting process from nomination to election day.

The inherent conflicts of interest should be obvious, but, believe it or not, this loose “Wild West” method of conducting elections is not prohibited in most U.S. association-governed communities.

Here’s a little secret that HOA industry does not want you to know.

Based upon CAI-CLAC public statements and testimony in Legislative hearings, it’s clear that the trade group wants to maintain tight control over the HOA, condo, and co-op election process.

Could it be that CAI members (community association managers and attorneys, as well as hand-picked board members) prefer to maintain the current status quo with a board that continues to rely on their professional services, and that of their ‘preferred vendors’?

Getting back to CLAC’s reversal on CA SB-1128

You see, CLAC pushed CA SB-1128 from the start, claiming that election by acclamation is a way to save associations money by cancelling ‘expensive’ elections as soon as the association is able to identify the exact number of candidates to fill vacant seats on the board.

First of all, the per member cost of conducting a proper election in California is nominal — perhaps a dollar or two per year.

But, more importantly, when the HOA board controls who can and cannot be nominated for candidacy, and refuses to allow self-nomination, nomination by members, or nomination from the floor, it’s rather easy to keep the same board entrenched for many years, or, in the alternative, to hand-pick allies with the exact same point of view as incumbent board members.

That’s a sure recipe for tyranny by the minority, akin to any Communist Politburo or dictatorial Banana Republic in the world. It flies in the face of U.S. Constitutional principles for a Democratic Republic.

So, the Judiciary Committee amended SB-1128 to read that a candidate can only be disqualified if not a current member of the association, if the candidate is a convicted felon, and/or if the candidate is not current on regular assessments, as proven by Internal Dispute Resolution.

b) An association may only disqualify a person from nomination as a candidate pursuant to the following:
(1) An association may disqualify a nominee for not being a member of the association at the time of the nomination.
(2) An association may disqualify a nominee if, within the past 20 years, the person has been convicted of a felony involving accepting, giving, or offering to give, a bribe, the embezzlement of money, the extortion or theft of money, perjury, or conspiracy to commit any of those crimes. For purposes of this paragraph, “conviction of a felony” includes a conviction of a felony in this state and a conviction under the laws of any other state, the United States, or any foreign government or country of a crime that, if committed in this state, would be a felony, and for which the person has not received a pardon from a person or entity authorized to grant the pardon.
(3) Subject to paragraph (2) of subdivision (c), an association may require a nominee for a board seat, and an incumbent board director during his or her board tenure, to be current in the payment of regular assessments, which are consumer debts subject to validation. If an association requires a nominee to be current in the payment of regular assessments, it shall also require an incumbent board director to be current in the payment of regular assessments.
(4) Through its bylaws only, an association may disqualify a nominee if that person is a joint owner of a separate interest parcel where one or more of the other joint owners is already an incumbent board director, or is already a nominee for a board seat in the current election.
(5) Through its bylaws only, an association may disqualify a nominee if that person has been a member of the association for less than one year.
C) Before disqualifying a nominee for alleged nonpayment of regular assessments, the association shall provide the nominee the opportunity to engage in the internal dispute resolution process set forth in Article 2 (commencing with Section 5900) of Chapter 10.

Source:

http://leginfo.legislature.ca.gov/faces/billCompareClient.xhtml?bill_id=201720180SB1128

But as soon as the Judiciary Committee of the California Assembly proposed strict limitations on factors that can disqualify an association member as a candidate for the board, CLAC decided to testify in opposition to SB-1128.

In other words, CAI’s vision for ‘fair’ elections includes the ability to limit who can serve on the board, by any means possible.

And what about CA SB-1265?

A few days ago, CLAC launched a Twitter discussion on SB-1265, undoubtedly in hopes of drumming up CAI member support for their opposition to the CCHAL-sponsored bill.

Surprisingly, there was very little activity from CLAC members. But I was online at the time, so I decided to listen in and respond.

Here’s a sampling of CLAC’s Tweets and my replies. Enjoy!

*(NOTE: I meant to Tweet “state” not “stare.”)

 

Specifically, CLAC wants to continue to allow boards of association-governed communities to disallow candidacy by owners who are in a dispute with the board members who approved the imposition of fines against them — even if such fines were imposed selectively or in bad faith.

And CLAC wants to disqualify the homeowner who is suing the association, even if the lawsuit is to assert important rights such as ending discrimination under the Fair Housing Acts, or recovering financial losses due to failure of the association to maintain the common areas.

Notice a pattern here?

CAI-CLAC opposes adding common sense neutral oversight of and democratic process to HOA elections, accountability of HOA boards, and, at the same time, favors leading communities by corporate law rather than Constitutional law.

More concrete proof that the trade group does not represent the interests of housing consumers.