California common interest developments (such as condominiums and planned developments) are governed by the Davis-Sterling Act. Each common interest development has a homeowners association that manages all community property and also enforces the Declaration of Covenants, Conditions and Restrictions in each such community. Each homeowners association is governed by a board of directors, which is typically composed of individual homeowners that are elected by the homeowners to serve as directors.
The Davis-Sterling Act requires that some or all of the directors be elected on an annual basis at a meeting of the homeowners. Among other requirements, the election must be done by secret ballot and there must be a third party inspector of the elections. The election process can be both time-consuming and expensive. This can be an overly cumbersome process, especially for a small homeowners association in which it may be difficult to have enough homeowners to volunteer to fill all the director positions.
For this reason, last year the California legislature enacted, and the governor signed, Assembly Bill 502 that, under certain circumstances, allows for the board of directors to accept the nominated candidates by acclamation to serve on the board without having a formal election by the association members. In order to do so, the homeowners association must meet the following requirements: (i) the association must have held a regular election of the board of directors in the last three years; (ii) the association provided individual notice of the election and the nomination procedure to all homeowners at least 90 days before the deadline for submitting nominations; (iii) the association provides a reminder notice to all homeowners between 7 and 30 days before the deadline for submitting nominations; (iv) within seven days of receiving a nomination, the board sends a written acknowledgement to both the association member who submitted the nomination and to the person so nominated; (v) the association permits all nominated candidates to run for the board so long as they meet the eligibility requirements to serve on the board; and (vi) the board of directors votes to consider the qualified candidates by acclamation at a duly called meeting of the board of directors and the agenda for such meeting identifies the name of each such nominated director.
The board of directors can only seat the nominated candidates by acclamation if the number of duly nominated and qualified candidates is equal to or less than the number of board positions that need to be filled. If there are more nominated qualified candidates than available board positions, then the board cannot seat the nominated candidates by acclamation and instead must hold a meeting of the association members to elect the directors.This article is written by Patrick Casey, who is a business attorney with the JRG Attorneys at Law firm in Monterey. You may reach the author at (831) 269-7114 or at email@example.com.
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