3 Crucial Bills Affecting Community Associations In 2022

By Rob Ward, Esq.

With the 2021 legislative session now officially closed for business, it’s time to review some of the key bills that will impact life in our beloved community associations. Some are fairly benign, and some appear to be great ideas in theory, but add new requirements.

Here are three to be aware of:

1. AB-502 (Davies) Election by Acclamation

Several of the new laws involve revisions to election law, with some cleanup legislation making a few key changes to be aware of. After a hard-fought battle with various homeowner groups opposing its passage, CACM’s input was instrumental in helping this bill, which provides for election “by acclamation” (without the need for a vote), to get passed.

Prior to its passage, the law permitted director nominees to be considered elected by acclamation if (1) the number of director nominees did not exceed the number of vacancies to be elected; (2) the association included 6,000 or more units; (3) the association provided individual notice of the election at least 30 days before the close of the nominations; and (4) the association allowed all candidates to run if nominated.

This bill eliminates the prior 6,000-unit requirement for acclamation and expressly provides for acclamation in Section 5103 of the Civil Code. Sounds good, right? Unfortunately, as with many bills that appear attractive on the surface, there is more to it when the onion gets peeled.

This bill actually adds an additional 90 days to the election process (!), and requires another reminder notice 7-30 days prior to the election. This changes the timeline for elections affected by the passage of Senate Bill 323 a few years back.

Both the first 90-day notice and the reminder notice must include specific information, and the first notice requires a “heads up” statement that if there are fewer candidates than there are vacancies, board may vote to fill the vacancies by acclamation. The reminder notice must provide a similar statement as well as a list of qualified candidates.

Next, within 7 days of a person submitting a nomination, the association must confirm receipt and whether the candidate is qualified or disqualified. If they are disqualified, a reason must be given along with the procedure for appeal.

CACM and other organizations supporting the HOA industry voiced concern about the short timeline to determine if a candidate is disqualified, something to be revisited in 2022. See related article in this issue on page 4 about election overhauls for more details.

2. SB-391 (Min) Virtual Meetings During Emergency

Another bill that appears to have its heart in the right place is Senate Bill 391, which is an urgency measure (so, it’s effective immediately), but also adds specific requirements that boards must follow.

The bill allows meetings to be conducted entirely virtually, by teleconference (defined to include videoconferences) without the requirement of a physical location for the meeting as needed if certain requirements are met, but only during a state of emergency.

The idea, of course, was to capitalize on the technology community association members have enjoyed since the era of Zoom meetings began due to the pandemic. Most notably, the level of participation in homeowner association meetings and official business showed a marked increase when members were permitted to attend remotely.

For this reason, at first, Senator Min and the proponents of this bill advocated for teleconferencing to be available for all meetings going forward. However, the bill was amended to remove the physical location requirement and allow remote meetings only if gathering in person is “unsafe or impossible,” a state of emergency having been declared by the governor, the federal government, or a local governing body.

The amendment also adds some specific conditions to the ability for boards to conduct meetings remotely. First, notice of the first meeting to be conducted in this manner must be delivered by individual delivery. It must contain clear instructions on how to participate by teleconference, as well as contact information for technical assistance should there be an issue connecting.

Be aware that roll call votes are required for these meetings, and that any meeting where ballots are counted and tabulated must be on video for all to see. The camera must also be positioned to allow members to witness the inspector of elections to count votes.

3. SB-432 (Wieckowski) Election Cleanup Measure (Term Limits, Election Procedures)

Finally, another bill that attempts the clean up some of what SB-323 wrought is Senate Bill 432, sponsored by Senator Wieckowski. After the SB-323 election bill was passed, HOAs were authorized to disqualify individuals from nomination for the board of directors for certain specific reasons, such as failure to be a member for at least a year, assessment arrears, and joint ownership with another member; however, term limits were not specifically discussed, and members could arguably be eligible for nomination again despite having served a full term.

As of January 1, 2022, SB-432 explicitly authorizes term limits, so that associations may disqualify an individual if they have served the maximum number of terms allowed under the governing documents.

The bill further clarifies that felony candidate disqualification applies if the felony compromises the association’s ability to secure any kind of insurance, not just fidelity as stated in the existing law, and eliminates the pre-ballot notice requirement for non-director elections.

Finally, this bill carves out an exception for voting driven by member petition (i.e., recall elections). When SB 323 changed the dates from 35 to 90 days for recalls, but allowed up to 120 days for new directors, a gap was created; now, the recall meeting dates are 35 to 120 days to eliminate that gap and allow for both elections to happen at the same time.

Consult your community association attorney for more details on these and other bills that should concern boards and community managers.

Rob Ward, Esq.

Rob Ward, Esq., is a Senior Attorney with Adams-Stirling PLC advising community associations from the firm’s San Diego office. Ward has represented HOAs throughout California both as a litigator and corporate counsel for over 23 years.