TOTAL RECALL

Addressing the Conflicts in Law in Conducting a Recall Election

By Tiffany N. Smith-Nguyen, Esq. and Dyanne L. Peters, Esq.

As you are undoubtedly aware by now, the passage of SB 323, which became effective January 1, 2020, ushered in significant modifications to the provisions governing association elections. These modifications require associations to abide by strict timelines and procedures, and failure to do so may result in a court overturning an election and imposition of fines. Though most associations have likely experienced at least one director election cycle under the new regime, it is important to be aware that the passage of SB 323 also impacted the timeline for recall elections.

DIRECTOR ELECTIONS

The new requirements and timelines for elections require associations to start its election cycle around 120 days before the election date.

Beginning at least 90 days prior to the election (it is recommended to begin the process around 120 days prior to the election), an association is required to provide general notice of the procedures and deadlines for submitting candidacy nominations. The association must allow members at least 30 days to submit their nominations, pursuant to Civil Code § 5115(a). Additionally, the association should appoint the inspector(s) of election, set the date of the annual meeting, and adopt election operating rules that conform to the new provisions (if it has not already done so). Civil Code § 5105(h).

At least 60 days before the election and at least 30 days before the ballots are distributed to the members (it is recommended to begin these steps closer to 90 days before the election), the association must determine the final candidates for election, prepare a candidate registration list, a voter list, and a “pre-ballot notice.”

Pursuant to Civil Code § 5105(a)(7), the candidate registration list should include the names of all members who have been nominated. The association is also required to prepare a voter list. The association must allow members to verify the accuracy of the information on both the candidate and voter list.

Civil Code § 5115(b) also requires the association to provide a “pre-ballot notice” to the members. This “pre-ballot notice” must be delivered via general notice and contain the following information: (1) the date, time, and address to return ballots; (2) the date, time, and location of the annual meeting; and (3) the list of candidates who will appear on the ballot (i.e., the candidate registration list).

Finally, at least 30 days before the election, the association’s inspector of election(s) must deliver or “cause to be delivered” to the members the ballots and a copy of the association’s election operating rules either via individual delivery or posting the website where they are available on the ballot. Civil Code § 5105(g)(4).

The above-described timelines must be complied with under the new provisions. These timelines not only apply to annual director elections, but also to recall elections (as well as assessment, governing document amendment, and grant of exclusive use common area elections).

RECALL ELECTIONS

In most cases when there is a vote to recall directors, associations include the election of new directors in the same vote in case the recall is successful. This ensures that if the recall is successful, the association immediately has new directors elected and is not paralyzed for months while an election is conducted.

The election timeline requirements discussed above apply to the recall of directors. However, recall votes are also governed by California Corporations Code which sets its own notice and timeline requirements. Unfortunately, the two required timelines are not entirely compatible. Following both sets of requirements is nearly impossible.

Corporations Code § 7510(e) specifies members of an association can call a special meeting of the membership for any lawful purpose, (including the recall of directors) by submitting a petition signed by at least five percent of the membership.

Section 7511 describes the notice requirement for special meetings. The association must give notice of the meeting within 20 days of receipt of request and the special meeting must be held between 35 and 90 days after the date the petition was received.

According to the timeline for elections required by the Civil Code discussed above, 90 days is the absolute minimum amount of time needed. This means that if an association wishes to hold the recall vote and election of new directors in the same vote, the special meeting would have to be scheduled exactly 90 days after receipt of the petition regardless of whether that date coincided with a weekend, holiday or another scheduling conflict.

The same day an association received a recall petition, the call for candidates/notice of nomination procedures must be mailed. Within 20 days, the notice of a special meeting must be given to the members. All of the regular election timeline steps discussed above would then have to be completed exactly 30, 60, and 90 days after receipt of the petition, also regardless of weekends, holidays, or another scheduling conflict.

In the face of a recall petition, the association has several options. It can attempt to follow the nearly impossible requirements stated above; if the law is violated due to missing any of the deadlines, the association can try to use the argument it “substantially complied” as a defense.

Alternatively, the association can schedule only a vote for the recall and then schedule an election only if the recall is successful. Because there is no call for candidates, the recall vote can realistically be conducted within the 90-day timeframe.

In the event your association receives a recall petition, the association’s legal counsel should be contacted immediately to advise the association on its options.

Tiffany N. Smith-Nguyen, Esq. and Dyanne L. Peters, Esq. are attorneys with Delphi Law Group, LLP, which services San Diego, Orange County, Los Angeles, Riverside, and the Desert. Smith-Nguyen has worked in the industry six years, and Peters for four years.