BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 1560|
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UNFINISHED BUSINESS
Bill No: SB 1560
Author: Battin (R)
Amended: 8/8/06
Vote: 27 - Urgency
SENATE TRANSPORTATION & HOUSING COMMITTEE : 13-0, 4/4/06
AYES: Lowenthal, McClintock, Ashburn, Cedillo, Ducheny,
Dutton, Kehoe, Machado, Margett, Runner, Simitian, Soto,
Torlakson
SENATE FLOOR : 39-0 (Consent), 5/11/06
AYES: Aanestad, Ackerman, Alarcon, Alquist, Ashburn,
Battin, Bowen, Cedillo, Chesbro, Cox, Denham, Ducheny,
Dunn, Dutton, Escutia, Figueroa, Florez, Hollingsworth,
Kehoe, Kuehl, Lowenthal, Machado, Maldonado, Margett,
McClintock, Migden, Morrow, Murray, Ortiz, Perata,
Poochigian, Romero, Runner, Scott, Simitian, Soto,
Speier, Torlakson, Vincent
NO VOTE RECORDED: Vacancy
ASSEMBLY FLOOR : 75-0 (Consent), 8/14/06 - See last page
for vote
SUBJECT : Common interest developments: governance
SOURCE : Author
DIGEST : This bill clarifies a number of provisions
enacted last year relating to elections within common
CONTINUED
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interest developments.
Assembly Amendments also provide cleanup language for the
improvement of accessing records in common interest
developments enacted last year.
ANALYSIS : A common-interest development (CID) is a form
of real estate where each homeowner has an exclusive
interest in a unit or lot and a shared or undivided
interest in common area property. Condominiums, planned
unit developments, stock cooperatives, community
apartments, and many resident-owned mobilehome parks all
fall under the umbrella of common interest developments.
The Davis-Stirling Common Interest Development Act provides
the legal framework under which homeowner associations
operate in common interest developments. In addition to
the requirements of the Act, each CID is governed by a
homeowner association according to the recorded
declarations, bylaws, and operating rules of the
association.
The Davis-Stirling Act requires a vote of the association
members for certain types of assessments and amendments to
the governing documents. Elections are also used in the
selection of board members. Legislation enacted in 2005,
SB 61 (Battin), requires an association to adopt election
rules that do all of the following:
Provides equal access to association media, such as
newsletters.
Ensures free and equal access to common area meeting
space.
Specifies qualifications for candidates and procedures
for nomination.
Specifies qualifications for voting.
Specifies a method for selecting one or three
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independent inspectors.
The Act requires that elections for board membership,
assessments, amendments to the governing documents, and the
granting of exclusive use common area by conducted by
secret ballot and supervised by one or three independent
inspectors. The Act further stipulates procedures for the
mailing, counting, and storing of ballots and for the
voting of proxies, including a requirement that proxy
ballots be on a separate detachable page from the proxy
itself.
If an association violates these provisions, a court may
award injunctive relief, impose a civil penalty of up to
$500 for each violation, and/or void the election results.
The court is required to award a successful plaintiff
reasonable attorney fees and costs.
This bill clarifies procedures for secret ballot elections
and accessing records in common interest developments (CID)
enacted lat year. Specifically this bill:
1.Requires that rules adopted by a homeowners association
(HOA) for elections specify when the polls open and
close.
2.Allows the inspector(s) of elections in an election to
appoint additional persons to verify signatures and to
count and tabulate votes provided that the persons are
independent third parties as defined.
3.Clarifies that election to recall members of the HOA
board of directors must be conducted by secret ballot.
4.Specifies that if the governing documents require a
quorum for an election the ballots received are to be
counted as members for the purpose of establishing a
quorum.
5.Allows for cumulative voting in an election if it is
provided for in the governing documents.
6.Defines a "proxy" as a written authorization signed by a
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member or the member's authorized representative giving
another member power to vote on behalf of the member.
7.Clarifies that proxies are not ballots and that an HOA
my, but is not required, to use proxies.
8.Allows the inspector of election or his/her designated
representative to verify the validity of member's
signature and address on the ballot envelope prior to the
meeting at which the ballots are tabulated.
9.Requires in the case of a challenge to an election
requiring a recount that the inspector of elections
rather than the HOA will make the ballots available to
the member or their authorized representative for review
and inspection.
10.Allows for the nomination of candidates in a membership
metting or by any other manner.
11.Allows for write-in candidates in elections.
12.Exempts from the secret ballot procedure votes cast in
elections by delegates or other representatives.
13.Specifies that an HOA is allowed to adopt rules
requiring owners to show architectural plans only to
impacted neighbors as part of the process for applying
for architectural changes to their unit.
14.Allows an HOA to provide specified records that are
requested by a member in electronic or machine readable
storage media as long as the records can be redacted and
are not alterable.
15.Requires and HOA when granting a variance from the
association's architectural standards to include reasons
for following the granting of the variance.
16.Requires financial documents that the HOA is required to
provide to a member as part of a specified list of
documents is prepared with an accrual or modified accrual
basis of accounting.
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17.Prohibits a third party from being liable for damages
for failing to withhold or redact information unless the
failure to withhold or redact information was intentional
or negligent.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 8/23/06)
California Alliance for Consumer Protection
California Alliance for Retired Americans
California Association of Community Managers, Inc.
ARGUMENTS IN SUPPORT : In a democracy, great value is
placed on each individual vote. Because CIDs play such a
pivotal role as quasi-governments, and since the outcome of
elections held within their precincts can have such a
profound effect on the residents' financial, physical, and
emotional well-being, it stands to reason that such
elections should be protected from potential manipulation
and intimidation.
With the unanimous passage of SB 61, (Battin), Chapter 450,
Statutes of 2005, the sanctity of the electoral process in
CIDs guarantees in future election. However, some minor
clarifications are needed in order to clear up some
confusion that certain associations have expressed
regarding the implementation of the new law. They have
been agreed upon by the various factions involved with CID
issues and the bill has been proposed for consent.
ASSEMBLY FLOOR :
AYES: Aghazarian, Arambula, Baca, Bass, Benoit, Berg,
Bermudez, Blakeslee, Bogh, Calderon, Canciamilla, Chan,
Chavez, Chu, Cogdill, Cohn, Coto, Daucher, De La Torre,
DeVore, Dymally, Emmerson, Evans, Frommer, Garcia,
Goldberg, Hancock, Haynes, Jerome Horton, Shirley Horton,
Houston, Huff, Jones, Keene, Klehs, Koretz, La Malfa, La
Suer, Laird, Leno, Leslie, Levine, Lieber, Lieu,
Matthews, Maze, McCarthy, Montanez, Mountjoy, Mullin,
Nakanishi, Nation, Nava, Negrete McLeod, Niello, Parra,
Pavley, Plescia, Richman, Ridley-Thomas, Sharon Runner,
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Ruskin, Saldana, Salinas, Spitzer, Strickland, Torrico,
Tran, Umberg, Vargas, Villines, Walters, Wyland, Yee,
Nunez
NO VOTE RECORDED: Karnette, Liu, Oropeza, Wolk, Vacancy
JJA:do 8/23/06 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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