BILL ANALYSIS Ó
AB 1799
Page 1
ASSEMBLY THIRD READING
AB
1799 (Mayes)
As Amended May 3, 2016
Majority vote
------------------------------------------------------------------
|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Housing |7-0 |Chiu, Steinorth, | |
| | |Burke, Chau, Beth | |
| | |Gaines, Lopez, Mullin | |
| | | | |
| | | | |
------------------------------------------------------------------
SUMMARY: Exempts homeowners associations (HOA) in a common
interest development (CID) from election procedure requirements
in uncontested elections. Specifically, this bill:
1)Exempts an election from the election requirements of the
Davis-Stirling Common Interest Development Act (Act) if the
election of directors is uncontested.
2)Provides that an election of directors is uncontested if:
AB 1799
Page 2
a) The number of candidates for election, including
write-in candidates, if applicable, does not exceed the
number of directors to be elected at that election; and
b) The association has declared the election is
uncontested.
1)Provides that an HOA may declare an election of directors is
uncontested only if all of the following procedures have been
satisfied:
a) The election rules required by Section 5105 have been
adopted and complied with for the election.
b) All declared candidates were nominated before the
deadline for nominations and in accordance with all lawful
provisions of the HOA's governing documents.
c) The inspector of elections has informed the board that
the number of candidates does not exceed the number of
directors to be elected at that election.
d) The board votes in open session to declare the election
is uncontested after a hearing during an open board meeting
where members are able to make objections to the board
making that declaration.
e) At least 20 days before the board meeting for the vote
to declare the election is uncontested, the HOA provides
general notice to all members as set forth in Section 4045
of all of the following:
AB 1799
Page 3
i. The intention of the board to vote at a regular
board meeting to declare the election of directors is
uncontested, and giving date, time, and place of that
board meeting.
ii. A disclosure to members of the names of all
candidates, however nominated, including self-nomination,
who will be declared elected if the board declares the
election is uncontested.
iii. The right of any member to appear at the board
meeting and make an objection to the board declaring the
election is uncontested before the board votes on the
matter.
f) The names of all candidates, however nominated, the
general notice required by subparagraph (e), any objection
to the board making the declaration that the election of
directors is uncontested, and the board vote declaring the
election of directors is uncontested shall be recorded in
the meeting minutes.
1)Requires, in cases where the HOA's governing documents provide
for write-in votes on the ballot, the association to allow a
write-in candidate to submit his or her name to the inspector
of elections up to 15 days after the board meeting described
in subparagraph (d) of paragraph (1).
2)Provides that in cases where the HOA's governing documents do
not provide for write-in votes, the association must provide
for a self-nomination process 15 days after declaring the
election uncontested.
AB 1799
Page 4
3)Requires a HOA to adopt a rule as part of the election
procedure that do both of the following:
a) Ensure that an announcement of an election and
notification of nomination procedures, including
self-nomination, will be provided to all members by general
notice at least 60 days before any election of the
directors; and
b) Ensure a member in good standing, who satisfies any
lawful requirements specified by the HOA's governing
documents will not be denied the right to vote or the right
to be a candidate for director.
1)Provides that a member may bring a cause of action in small
claims court for a violation of this Act.
FISCAL EFFECT: None
COMMENTS:
Background: There are over 50,220 CIDs in the state that
comprise over 4.8 million housing units, or approximately one
quarter of the state's housing stock. CIDs include
condominiums, community apartment projects, housing
cooperatives, and planned unit developments. They are
characterized by a separate ownership of dwelling space coupled
with an undivided interest in a common property, restricted by
covenants and conditions that limit the use of common area and
the separate ownership interests, and the management of common
property and enforcement of restrictions by a HOA. CIDs are
AB 1799
Page 5
governed by the Act as well as the governing documents of the
HOA, including bylaws, declaration, and operating rules. The
Act requires elections to conform to an extensive process
including double stuffed ballots and the HOA to select one or
three independent third parties as an inspector or inspectors of
elections. AB 569 (Chau), Chapter 661, Statutes of 2014
exempted HOAs from these procedures in cases where their bylaws
require all of the members to serve on the board of directors.
This bill would allow the board of directors of a HOA to declare
an election uncontested if the number of candidates running for
election does not exceed the number of directors to be elected
at the election. In order to qualify, the election would have
to comply with all properly adopted election rules, all
candidates must be nominated before the deadline and in
compliance with the governing documents, and the inspector of
elections would have to declare that the number of candidates
does not exceed the number of directors to be elected. Twenty
days prior to declaring the election uncontested, the HOA would
be required to notify the members that the board is planning to
vote that the election is uncontested and the right of the
members to object to the board declaring the election
uncontested.
Write-in candidates: In some cases, the governing documents of
a HOA allow for members to write-in candidates for an election.
After the HOA declares that an election is uncontested at a
board meeting, this bill would allow members 15 days to write-in
a candidate for election. If one or more write-in candidates
are received and the number of candidates exceeds the number of
directors to be elected then this bill requires an election to
be held. If after 15 days the number of write-in candidates and
the number of candidates does not exceed the number of open
positions on the board then the election results will be sealed
and the any write-in members will be added as members. It's
possible that there may not be enough members running for the
open positions on the board and if additional candidates write
AB 1799
Page 6
in their names this bill would add them to the board
automatically. If an HOA does not provide a write-in process
then this bill would require an HOA to provide a process for
self-nominations 15 days after declaring an uncontested
election.
Purpose of this bill: According to the author, "CID board
elections are often uncontested, with the number of candidates
does not exceeding the number of vacant seats. Current law
requires such uncontested elections to follow the same election
procedures as contested elections, including minimum vote
thresholds and costly third-party verification of results.
These costs are a burden on the budgets of CIDs, particularly
lower-income communities. AB 1799 exempts homeowner
associations from the costly election procedure requirements in
current law, but only in instances where the requirements are
unnecessary because the number of candidates does not exceed the
number of open seats. AB 1799 will return these resources to
the budgets of homeowner associations, allowing for additional
improvements to shared community features."
Analysis Prepared by:
Lisa Engel / H. & C.D. / (916) 319-2085 FN:
0002870
AB 1799
Page 7