Beaumont Tashjian Law Blog

Thursday, January 2, 2020

Senate Bill 323: What you Need to Know

As you may know, Senate Bill 323 went into effect on January 1, 2020. Under SB 323, among other substantial changes to the California Civil Code, associations are significantly hampered in their ability to set qualifications for candidates. For example, SB 323 sets forth limited situations in which associations may disqualify a candidate from running for the board of directors:

  1. The nominee may not have previously been convicted of a crime that would prevent the association from purchasing fidelity bond coverage, or may cancel existing coverage;
  2. The nominee must be current in the payment of regular and special assessments;
  3. The nominee cannot serve on the Board at the same time as another person who holds a joint ownership interest in the same separate interest parcel as the person; and
  4. The nominee must be a member of the association for a year or more.

These candidate qualifications, while optional under SB 323, should be adopted through the adoption of Election Rules for the community, as they are effectively the only ways the legislature authorizes associations to ensure a quality pool of invested candidates. Note that it is mandatory for associations to disqualify persons from nomination as a candidate if they are not members of the association at the time of nomination.

SB 323 also requires that ballots be provided to persons with general power of attorney for a member, and the person with power of attorney must be allowed to vote on behalf of the member. Furthermore, under the new law, managers are prohibited from serving as inspector of elections, as SB 323 prohibits a person who is currently under contract with the association from serving as inspector.

Without updated Election Rules and Bylaws, associations will have governing documents that are not in compliance with the new law. We strongly recommend that boards immediately adopt a new set of Election Rules to make sure they are in compliance. SB 323 also imposes several additional notice and document-production requirements, which you should be aware of. For example, at least thirty (30) days before the ballots are distributed, the association must provide general notice of the date, time and location of the meeting at which ballots will be counted, and it must permit members to verify the accuracy of their individual information on both the candidate registration list and voter list. At least 30 days before the election, the inspector or inspectors of elections must also deliver to each member a copy of the Election Rules.

*Keep in mind that under SB 323, the Election Rules cannot be amended less than ninety (90) days prior to an election. If your election is within ninety (90) days, note that your previous Election Rules (if any) will still govern that election.

We strongly recommend Boards adopt new Election & Voting Rules. Failure to adopt updated election rules may result in a voided election, as well exposure to un-budgeted legal expenses. Contact our office for a quote to prepare a new set of Election and Voting Rules and the accompanying documents which includes, but is not limited to, the Candidate Nomination Form, an Election Timeline, and the above-mentioned pre-election notices.

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