BILL ANALYSIS
AB 1726
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ASSEMBLY THIRD READING
AB 1726 (Swanson)
As Amended May 3, 2010
Majority vote
HOUSING 9-0
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|Ayes:|Torres, Arambula, | | |
| |Bradford, Eng, Gilmore, | | |
| |Knight, Saldana, | | |
| |Torlakson, Tran | | |
| | | | |
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SUMMARY : Provides that for elections of the board of directors
in common interest developments (CIDs) if a homeowners
association (HOA) cannot achieve a quorum, the quorum required
in the subsequent meeting is 33% of the HOA membership entitled
to vote. Specifically, this bill :
1)Requires the HOA to disclose to the membership in the election
materials, that if the quorum required is not achieved to
qualify the election, in the subsequent election the quorum
will be 33%.
2)Provides this provision does not apply to HOAs whose governing
documents require a quorum of less than 33% for a subsequent
election.
3)Makes technical changes.
FISCAL EFFECT : None
COMMENTS : There are over 41,000 CIDs in the state that range in
size from three to 27,000 units. CIDs make up over four million
total housing units, which represents approximately one quarter
of the state's housing stock. In the 1990s, over 60% of all
residential construction starts in the state were CIDs. 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
AB 1726
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property and enforcement of restrictions by an association.
CIDs are governed by the Davis-Stirling Act (Civil Code Section
1350 et al.), as well as the governing documents of the
association including the bylaws, declaration, and operating
rules. Except when CIDs are first developed, no state agency
provides ongoing oversight to these communities.
HOAs are run by volunteer board who are elected by the owners
within the CID. In some cases, CIDs have community managers
that run the day-to-day operations required to maintain the
community.
The governing documents of a CID generally include a quorum or
the minimum amount of voting power required for an election. If
the governing documents fail to set a quorum requirement, state
law requires, for incorporated CIDs, the quorum to be at least
one-third of the members.
SB 61 (Dutton) Chaptered 450, Statute of 2005, established
extensive standards for conducting elections in CIDs. Elections
are required to be conducted by secret mailed ballot. The
ballots must be counted by an inspector of election who cannot
be a HOA member or manager of the HOA.
Purpose of the bill : According to the sponsor, garnering more
than half of all members' vote has proven to be extremely
difficult largely due to member apathy or inconvenience,
particularly in large vacation communities. In additional,
certain terminology and definitions in the law have lead to
confusion, invalid ballots, and inconclusive elections. HOAs
must then repeat the entire process until the quorum of all
members is met, this includes mailing notices and ballots again,
attempting to convene a meeting with a majority of members
represented, and also incurring extra cots to their zero based
budgets. This bill allows for a reduced quorum percentage in
order to conduct business. The reduced quorum would only take
effect when the initial meeting or vote failed to achieve a
majority quorum and would only apply to the second attempt to
convene the election.
Analysis Prepared by : Lisa Engel / H. & C.D. / (916) 319-2085
AB 1726
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FN: 0004198